The Institute of Chartered Financial Analysts of India University 2008 C.A Chartered Accountant FINAL - Question Paper
Thursday, 31 January 2013 12:50Web
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Roll No.
[Total No. of Printed Pages8
Total No. of Questions9]
Time Allowed3 Hours
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Answers to questions are to be given only in English except in the case of candidates who have opted for Hindi medium. If a candidate who has not opted for Hindi medium, answers in Hindi, his answers in Hindi will not be valued.
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Ltd., Primus Steel Pipe Manufacturers Ltd. and Primus*lYlarketing Company |
Ltd. All the three Companies want to appoint Mr. Prem as their Managing Director. You are required to state with reference to the provisions of the npanies Act, 1956 whether such appointments are permissihlp
rking of City Stock Exchange Association Ltd. is not being carried on by 5
its Governing Board in public interest. On receipt of representations from various investors and Investors Association, the Central Government is thinking to withdraw the recognition granted_jto_the said Stock Exchange. You are required to state the circumstances and procedure for withdrawal of such recognition as per the provisions of Securities Contracts (Regulation) Act, 1956 in this regard. Also state the effect of such withdrawal on the contracts outstanding on the date of withdrawal. oc!/'''
(c) The governing body of City Stock Exchange Association Ltd. is desirous of putting various restriction on voting rights of its members to be exercised in -a meeting and on their right to appoint a proxy. You are required to state whether the same is permissible. Also state the role of Central Government in this respect.
(a) TKM Exporter of New Delhi are engaged in Export Business. It made certain exports but failed to realise and repatriate to India the foreign exchange due on its exports. The Adjudicating Authority iini3osed~apenalty under the~provisions of Foreign_Exchange Management Act. 1999 (FEMA). Being aggrieved by this penalty, the said exporter seeks your advice as to the authority to which appeal can-be madcTandthe timelimit for making suctr~appeals. You- are required to advise"on the matter. >
Mr. Kale, an Indian National desires to obtain foreign exchange for the following purposes :
.
ittance of US Dollar 50,000 out of winnings on a lottery ticket.
US Dollar 100,000 for sending a tour of a cultural troup to U.S.A.
(ij*f US Dollar 50,000 for meeting the expenses of his business tour to EuropeV Advise him, if he can get the Foreign Exchange and under what conditions :
(c) (i) In a proceeding before the Competition Commission of India involving two Pharmaceutical companies, theplaintiff requested the presiding officer to call' upon the services of experts from "the pharmaceutical sector to determine the truth of the allegations levelled by it against the respondent. The respondent opposed the request on the ground that such action can not be taken by the Competition Commission. You are required to state with reference to the provisions of the Competition Act, 2002, whether the contention of the respondent is tenable.
(ii) The Central Government has formed as opinion that Mr. CBM (a member of the Competition Commission of India) has acquired such financial interest that it may affect prejudicially his functions as a member of the Competition Commission and it wants to remove him from his office. You are required to state with reference to the provisions of the Competition Act, 2002, whether the Central Government can do so and if yes, how ?
Answer any two of the following :
. (a? (iVWhat do you understand by the term Price Sensitive Information as V/ contemplated in the Securities and Exchange Board of India Act. 1992 ? What are the information which fcanjae deemed to be Price Sensitive Information
(iiWSlGR Ltd. wants to issue certain shares on preferential basis and has 4 bought your advise in respect of pricing the shares for such lssue, Yo are required to state the Guidelines issued by Securities and Excha g Board of India in respect of pricing of the issue of shares on a preferential
basis.
el Ltd a Public Limited Company listed with the StMk_Erch|in|i!iiH5lb.a 8
L to make issue of equity shares on preferentialbasisjureimna
Jheme approved under Corporate Debt Restrumng_frame
by Reserve Bank of by iS-gS?
of Directors of theTSSpany. Following information relevant to the preferen i
issue is available.
firotal No. of equity shares to be issued : 50 lac equity
/ each out of which 30 laceguitSLshares will be allotted_onJ!gtu ,
as fully paid up and balae 20 lac equity shareshaMotted on the
same date bu&h d * 1
upon at a later datTTSiiIirp3}2HMl2XS5!!l?008'
(ii) Out of the proposed aHotteS'cmie persons are holding their shares in Excel Ltd. in physical form and not in dematerialed form and some, perso had sold their entire shareholding in Excel Ltd. in Januar2008.
(iii) The meeting of general body of shareholders for approving the preferential
issue was held on 15th March, 2008.
Based on the above information you are required to answer the following queries with reference to the SEBI (Disclosure and Investor Protection)
Guidelines, 2000 :
(i) What would be the lock-in period for the shares allotted on preferential basis ?
(ii) Who are the persons not entitled for allotment of shares on preferent' basis ?v//
(i) Explain the rules relating to interpretation of statutes when the terms /'notwithstanding and "Subject to are used m any provision of an
Act.
P. T. O.
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State the effect of the words notwithstanding anything contained in this Act used in Section 408 of theTCompanies ArTt., IQfifi certain powers in the CgjatrlfL Government to prevent oppression or mismanagemeri
4. (a) Mr. Raj is director in 14 public limitedconjjianies as on 30th July, 20jP'and continues to be so till, 26th September, 2007. The following companies appoints Mr. Raj as a director at their respective Annual General Meetings held on dates mentioned against their names :
(1) (IVJLP-Jjtp. (AGM held on 27th September, 2007)
(2) |PAT Private Lld.'txGM held on 25th September, 2007)
(3)
Cbmpanies Act, iyt>b
held on 26th September, 2007)
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(4) WMC Lt) (AGM ______
held on 29th September, 2007)
You are required to state with reference to the relevant provisions of the Companies Act, 1956 the options available to Mr. Raj in respect of accepting orot accepting the appointment of the above companies.
at do you understand by the term Director Identification Number (DIN) ? Describe the procedure to obtain the same as enumerated under the Companies x, 1956 read with the relevant Rules.
5. (aX A group of shareholders has approached you for advice regarding the affairs of LPM Paper Mills Ltd. according to them, the management of the company is not carrying out its functions in accordance with the prudent commercial practice and if the affairs of the company are allowed to ruifin future in the same manner, the company Hol-ytmov wfHjj4rjTTiT~Ter7~TTrev~wTint that a Special Audit be conducted to find out the actual nature of the transactions*/-- ." -----J
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(y You are Required to state with reference to the provisions of the Companies Act, 1956, as to when a special audit can be directed and by whom ?J
(ii) Drt an application to be submitted to the appropriate authority in this respect.
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Big Ball Ltd., a reputed Public Company, over the years, has performed excellently and its General Reserve is many times more than the paid up capital of the Company. The ChairmarTof the company7-came to know that a group of unscrupulous persons is cornering the shares "of The company and may lodge them fo7translcr~m their "names. It is apprehended" t hat such transfer may lead to change in the~composition of Board of Directors which may be prejudioanto the Puhiiiierest. : ~ '
You are required to state with reference to the provisions of the Companies Act, 1956 asto how Big BaIT~Ltd. can bloclt "the above stated transfer of shares. : ~ ' "
(i) fin inter-state co-operative society has been incorporated on 1st May, 2008 as a Producer Company under the provisions of the Companies Act, 1956. Give your comments on its proposal to have 18 directors on its ~ ard after incorporation as a Producer Companyv'
Mr. Zameen, a member of a Producer Company, wants to transfer his shares. You are required to state as to how he can transfer his shares under the provisions of the Companies Act, 1956.
iii) A Producer Company wants to issue bonus shares. You are required to s&te the relevant provisions of the Companies Act, 1956 in this regard.
ViVf What are the modes of investment, frgm and out of its general reservps available to a Producer Companyorined~~atTd registered under Section 581C of the Companies Act; T956 ? --"
Amar Textiles Ltd. is a company engaged in manufacture of fabrics. The Company has investments in shares of other bodies corporate including 70% shares in Amar Cotton Co. Ltd. and it has also advanced loans to other bodies corporate, Tffc aggregate of all the .investments Amar Textiles Ltd. exceeHsTHB;
nd loan? tl and free reserves
_____m____________ Jts pa id up share Vl_
and also exceeds, 100% of its free reservespncourse of its business requirements, Amar Textiles Ciiagnd3tariM~aerm loan from Industrial Development Bank of India and is still subsisting. Now the Company wants to increase its holding from 7tf% to 80% of the equity share capiil irTAniar ColtonCo. Ltd. by purchase ofadditionaTTO shares trom other existing sKareholders. State the legal requirefnents~tol7e..co~mlJli~wit4iyiTiarJTextiles Lid. under the provisions of the Companies Act, 1956 to give effect to the above proposal.
Will answer be different in.Amar Textiles Ltd. would have defaulted in payment of matured fixed deposits accepted by it from the public ?
a) The last three years Balance Sheet of PTL Ltd., contains the following 8 information and figures : -
As at As at As at
31.3.2006 31.3.2007 31.3.2008 Rs. Rs. Rs.
Paid up capital 50,00,000 50,00,000 75,00,000
General Reserve 40,00,000 42,50,000 50,00,000
Credit Balance in
Profit & Loss Account 5,00,000 7,50,00CL 10,00,000
Debenture Redemption Reserve 15,00,000 20,00,000 25,00,000
Secured Loans 10,00,000 15,00,000- 30,00,000
On going through other records of the Company, the following is also determined:
Net Profit for the year (as calculated in accordance with the provisions of Section 349 & 350 of
the Companies Act, 1956 12,50,000 19,00,000 34,50,000
In the ensuing Board Meeting scheduled to be held on 5th May, 2008, among other items of agenda, following items are also appearing :
(i) To decide about borrowing from financial institutions on long term basis.
(ii) To decide about contributions to be made to charitable funds.
Based on above information, you are required to find out as per the provisions of the Companies Act, 1956, the amount upto which the Board can borrow from financial institution and the amount upto which the Board of Directors can contribute to charitable funds during the Financial Year 2008-09 without seeking the approval in general meeting.
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OGC Ltd. was a supplier of Raw Materials to SAM Ltd., which could. not make payment to OGC Ltd. owing to huge losses and financial constrain .
Ultimately, SAM Ltd., went into
appointed. OGC Ltd. filed a suit for V p A H o7c Ltd
a decree in favour of OGC Ltd. Armed with the Court s decree, OGC Ltd.
approached the Official Liquidator to pay the amount to it in Prefc
over dues of the workmen. The workmen protested the demand of OGC
Ltd and contended that their dues rank pan passu with the Secured
Creditors and will override all other claims of other cred.tors even where
a decree has been passed. .
You are required to ascertain the validity of the argument of the workmen m le light of the provisions of the Companies Act, 1956 and the deeded cases
on the subject.
HPC Ltd. for a number of years was in various types of
to exit from its non-core business, its management decided to hive off t business of food processing by demerging the saidbusiness with an associa e company namely BCD Ltd. You are required to advise briefly, with referenc TL provisions of the Companies Act, 1956, the steps the management should take to give effect to the proposed demerger.
(i) Whether guarantee commission paid to a Director is remuneration to director requiring Central Governments permission when the amount of such commission exceeds the limit prescribed in Section 309 of the
Companies Act, 1956.
(ii) BHP Ltd. wants to make the liability of its directors_uBiiPited- You are required to state with reference to the provisions_ofthe Companies Act, 1956 whether this can be done_
(iii) Mr. John is a director of MNC Ltd., which had accepted deposits from public. The Financial position of MNC Ltdjuraed bad_ and _it Lied to repay the April,
2007 and stfclTlayment has not been madejill 5th May, 20 . Another company JKTTLHTwants to appoint the said Mr. John as its director at its annual general meeting to be_heWon_6th May, 200 . You are required to state with reference to the_provisions of the Companies Act, 1956 whether Mr. John can be appointed as a director
of JKL Ltd.
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9. (a) LMB Ltd., Kolkata is a multiproduct manufacturing company having paid up capital of Rs. 5.00 Crores. In order to increase the product portfolio, the said . company intends to procure certain machines and equipments worth Rs. 1.00 ' crore from a partnership firm, namely, M/s. MLPK, in which the son of managing director of LMB Ltd. is a partner. The contract for purchase of said machines and equipments is to be placed before the board of directors of the company for its consideration.
In view of above facts, you are required to explain briefly the procedure under the provisions of the Companies Act, 1956 to be followed by the LMB Ltd. to enter into the said contract :
(b) Answer any one of the following :
(i) Board of Directors of DBM Limited held a board meeting on 2nd May,
2008 at its registered office. You are required to state the salient points to be taken into account while drafting the minutes of the said board meeting.
(ii) Draft a board resolution for appointment of Mr. Paul as the managing director for 5 years, with effect from 1st June, 2008 of DBM Limited passed in the above stated board meeting.
(c) Annual General Meeting of a Company has been concluded on 30th April, 2008. Now, the company is required to submit/file its Annual Return and Annual Accounts with Register of Companies. You are required to state the procedure for such submission/filing..
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