The Institute of Company Secretaries of India 2009 Company Secretarial Practice - Question Paper

371

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Time allowed : 3 hours

Total number of printed pages : 5

NOTE : 1 Answer SIX questions including Question No.1 which is compulsory.

2 All references to sections relate to the Companies Act, 1956 unless stated otherwise.

1 Draft any four specimen resolutions stating the authority who can pass it and also the type of resolution. Give reasons for passing the requisite resolution referring to the relevant section(s) of the Companies Act, 1956 :

Health Care Ltd. (HCL) wants to make investment of Rs.55 crore and loans of Rs.45 crore in other companies. Balance sheet as on 31^st March, 2009 shows HCL's paid-up capital of Rs.35 crore and reserves of Rs.75 crore.

Buoyant Ltd., a loss incurring company, wants to appoint Jolly as Managing Director w.e.f. 15^th March, 2009 on a total remuneration of Rs.10 lakh per month (all inclusive). Its paid-up capital is Rs.5 crore, reserves Rs.3 crore and term loans Rs.10 crore. The company has accounting year ending on 31^st March every year.

Grow India Ltd. is sanctioned a credit facility of Rs.25 crore by the Union Bank of India, Kapurbavdi Branch, Thane, against its inventory and receivables. The company wants to enjoy the sanctioned credit facility.

Global Fashion Ltd. wants to appoint Amitabh as a director in place of Dharmendra who has resigned due to ill health.

Neo Biotech (P) Ltd. wants to appoint the first auditors in the regular course within a fortnight of the registration of the company.

(5 marks each)

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A public limited company can have equity share capital alone, but it cannot have preference share capital alone.

(6 A company is not bound to close its register of members even for a single day.

iii)    Interim dividend can be declared out of reserves by a company which has even incurred a loss.

iv)    The annual general meeting of a company for the current year as also for the previous year can be held on the same day.

v) A group of 44 members of a company limited by shares holding in aggregate 2% of the issued share capital of the company cannot under any circumstances apply to the Company Law Board alleging mismanagement of the company. The company has 550 members.

v The expression 'free reserves' for the purpose of section 372A does not include the balance to the credit of 'securities premium account'.

(2 marks each)

3. a) Choose the most appropriate answer from the given options in respect of the following :

6) As per the Companies Act, 1956, the maximum number of directors a private limited company which is subsidiary of a public company, can have without approval of the Central Government is

() 10

b) 11

c 12

(d 13.

(6 The aggregate of the contributions to any political party or for any political purpose to any person by a company in any financial year shall not exceed

a 2 2|% of its average net profits determined in accordance with the provisions of sections 349 and 350 during the five immediately preceding financial years

b) 5% of its average net profits determined in accordance with the provisions of sections 349 and 350 during the three immediately preceding financial years

0 7 % of its average net profits determined in accordance with the provisions of section 349 during the five immediately preceding financial years

(d 10% of its average net profits determined in accordance with the provisions of section 349 read with section 350. The average profit is to be calculated by reference to preceding three financial years.

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iii)    The number of scrutineers to be appointed by the Chairman of a general meeting is

a)    3

b)    2 c 1

(d 4.

iv)    As per the rules framed under section 205A(3) relating to use of past reserves for payment of dividend, a company after drawal of the amount from the reserves for payment of dividend should retain in the reserves an amount not less than

(a) 25% of the paid-up share capital of the company b) 20% of the paid-up share capital of the company c 15% of the paid-up share capital of the company (d 10% of the paid-up share capital of the company.

(v) As per clause 49 of the listing agreement, the audit committee comprising of five directors must have a minimum of

(a)    2 independent directors

(b)    3 independent directors

(c)    4 independent directors d)    1 independent director.

(v) A special notice is required for

a)    Removal of a member

b)    Removal of the Company Secretary c Removal of a nominee director

d) None of the above.

(1 mark each)

(b You are the Company Secretary of Alltime Favourites Ltd., a listed company, and the Managing Director of your company wants to know the procedure for shifting of registered office from Mumbai to Pune. Prepare a note for him.

(10 marks)

4. a) Swan Ltd.. was sanctioned a term loan of Rs.15 crore by Fantastic Bank Ltd. with a stipulation of conversion of loan into equity. The company could not repay the loan as stipulated. As per one of the conditions of sanction, the bank now wants to exercise the right of conversion of Rs.5 crore lean into equity. State the procedure for the same.

(8 marks)

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b) Bipin is the Managing Director of Adarsh Ltd. and also of Bolder Ltd. Cleaner Ltd. decides to appoint Bipin as the Managing Director of the company. State the legal requirements under the Companies Act, 1956 to give effect to the proposed appointment and also draft a resolution for the appointment of Bipin as the Managing Director of Cleaner Ltd.

(8 marks)

5.    a What is a 'foreign company' and 'foreign controlled company' ? State the legal

requirements a foreign company should comply with relating to delivery of documents to the Registrar of Companies, if it wishes to establish a place of business in India under the Companies Act, 1956.

(8 marks)

b) Amar, Akbar and Anthony failed to pay the first call money of Rs.2.5 per equity share of Rs.10 each on 300, 500 and 1,000 equity shares held by them respectively in Good Prospects Ltd. The Board of directors wants to know what can be done in this situation. Guide the Board of directors by way of a note stating the steps involved and procedure to be followed by the company if it wants to forfeit the shares held by them. Also explain to the Board of directors whether the forfeiture will amount to reduction of share capital.

(8 marks)

6.    a) Arnold is the elder son of John. John was holding 5,000 equity shares of

Dreams Ltd. and died. As the Company Secretary of the company, how will you guide Arnold to claim the shares of John ? He has one brother, 2 sisters and mother. John had not made any nomination.

(4 marks)

b) Article No.72 of the articles of association of the company requires 25 persons to be present personally and/or by proxy to constitute the quorum at a general meeting. The company now wants to have the lowest minimum quorum as provided in the Companies Act, 1956. As the Company Secretary of the company, how could this be achieved by you for your company ?

(4 marks)

(c) A complaint has been made to the Registrar of Companies by 5 members asking him to direct the Timely Holdings Ltd. of which they are members to re-ccnvene annual general meeting since they had not received the notice of the company for the annual general meeting held on 30^th September, 2008. The Registrar of Companies issues notice as to show cause why such directions should not be issued. What would be your response as the Company Secretary of the aforesaid company ?

(4 marks)

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(d The Beard of directors of Free Flow Ltd. registered in Chennai, proposes to hold the next meeting of Board of directors in the month of January, 2010. Advise with reference to the provisions of the Companies Act, 1956 and relevant Secretarial Standards in respect of the following matters :

i Can the meeting of Board of directors be held in Kolkata, when all the directors of the company reside at Chennai ?

(1 mark)

(i Whether the meeting of Board of directors can be called on a public holiday and that too after business hours as the majority of the directors of the company have gone to Kolkata on vacation ?

(1 mark)

(iii) Is it necessary that the notice of the meeting of Board of directors should specify the nature of business to be transacted ?

(2 marks)

7.    a) Enumerate the search facilities in MCA-21.

(6 marks)

(b) Enumerate the contents of Management Discussion and Analysis Report (MDAR) which forms part of the Board of directors' report.

(6 marks)

0 Discuss directors' remuneration report in the light of Companies Act, 2006 of the United Kingdom.

(4 marks)

8.    Write notes on any four of the following :

0 One person company (i Independent director (iii) Share warrants iv) Nominee director V) Secretarial Standards.

(4 marks each)

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Time allowed : 3 hours    Maximum marks : 100

Total number of questions : 8    Total number of printed pages : 4

NOTE : Answer SIX questions including Question No.1 which is compulsory.

1 Attempt any four of the following :

a Anand sells a property to Karan. After completion of the conveyance, Karan discovers that under a decree for partition, a portion of the property had been allotted to Chandan and Anand's omission to disclose the decree is fraudulent. Discuss the rights and course of action available to Karan.

(5 marks)

(b Define 'deed.'. What are the components of a deed in general ?

(5 marks)

fc) Re-write the following sentences after filling-in the blank spaces with appropriate wcrd(s)/figure(s) :

   _, in legal sense, means an act of preparing legal documents.

(i    _are those deeds in which there are two or more parties.

ii)    _is a special type of agency, which combines agency with guarantee.

iv)    _ is a method of acquiring the right to use equipment or real

property for consideration.

V) Pleadings filed by a defendant/respondent in answer to the claim set-out by the plaintiff/petitioner in the form of affidavit and/or supported by an affidavit are referred to as_.

(1 mark each)

(d State, with reasons in brief, whether the following statements are true or false :

i 'Drafting' and 'conveyancing' provide the same meaning although these terms are not inter-changeable.

(i Consideration is very important in a document and must be expressed. But, non-mention of consideration does not invalidate the document.

(iii) Agreements not relating to immovable property and agreements not creating an interest in immovable property are not compulsorily registrable.

iv) "I promise to pay Balram Rs.2,000 and all other sums which shall be due to him" is a promissory note.

(v) A private trust will fail, if the object is uncertain or incapable of application.

(1 mark each)

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e Choose the most appropriate answer from the given options in respect of the following :

i If a power of attorney is executed in favour of more than one person and is silent on the mode of execution by attorneys, the attorneys will be entitled to act only

a)    Jointly

()    Severally

fc)    Both (a) and (b)

(d    None of the above.

(i The    notices issued by a company under the Companies Act, 1956 may be

(a)    Contingent

(b)    Conditional

c Both (a) and (b) d None of the above.

iii)    The Code of Civil Procedure, 1908 prescribes that dates, sums and numbers expressed in pleading shall be in

a)    Figures

()    Words

fc)    Both (a) and (b)

d) None of the above.

iv)    The writ that is available to any person, whenever any body of persons having legal authority to determine questions affecting rights of subjects and having the duty to act judicially acts in excess of its legal jurisdiction, is

fe)    Mandamus

()    Osrtiorari

c    Both (a) and (b)

d)    None of the above.

(v) The power of registered proprietor of a trade mark to assign his rights in the trade mark is dealt under section 37 of

fe) The Copyright Act, 1957

(b)    The Trade Marks Act, 1999

(c)    The Trade and Merchandise Marks Act, 1958 d) None of the above.

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2.    fe) Discuss the requirements of section 13 of the Companies Act, 1956 with regard to

'objects clause' of the memorandum of association of a company. What are the precautions which must be taken in drafting the objects clause ?

(4 marks)

b) Explain mortgage by deposit of title deeds.

(4 marks)

fc) Draft a deed of agreement of admission of a new partner into a partnership firm.

(8 marks)

3.    a Arvind mortgages his houses at Delhi and Gurgaon to Suresh. Arvind then mortgages

the Delhi house to Navin. On default, Navin brings Delhi house to sale in enforcement of his mortgage and he himself purchases Delhi house. Suresh then obtains an order for sale on his mortgage. What are the rights and remedies available to Navin ?

(5 marks)

b) What special points must be taken into account while drafting notices in case of a company ?

(5 marks)

fc) Draft a power of attorney to execute a deed of sale.

(6 marks)

4.    (a) What are the requisites of an 'award' under the Arbitration and Conciliation Act,

1996 ?

(4 marks)

b) Distinguish between the following :

i 'Document' and 'deed'.

(i 'Affidavit' and 'petition'.

iii)    'Counter guarantee' and 'fidelity guarantee'.

iv)    'English mortgage' and 'simple mortgage'.

(3 marks each)

5.    a) The government of a particular State and Sriram Holdings (P) Ltd. went to arbitration

and the arbitrator passed an award on 12^th October, 2003 against the appellant, copy of which was received by appellant on 23^rd October, 2003. Review was sought on 2^nd April, 2004, after 6 months from the date of award. Objections to the award were filed after 10 months from the date of the award. Will the appellant be entitled to file objections under the Arbitration and Conciliation Act, 1996 ? Support your answer with case law.

(4 marks)

(b) Explain habendum. What does a habendum clause signify in a document ?

(4 marks)

c Define 'affidavit'. What rules and guiding principles should be followed while drawing up an affidavit ?

(8 marks)

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6.    a What are the ingredients that are necessary to prepare

0 Power of attorney; and (i Instrument of trust ?

(3 marks each)

(b) Management issues an appointment letter to a probationer and the relevant para of his appointment letter reads as follows :

"Clause (I) You are hereby appointed as a Salesman.... You will serve a probationary period of six months; this period of probation may be extended by a further period of three months or more in suitable cases in the absolute discretion of the company. The company has the right to terminate your services during the period of probation or extended period of probation or before confirmation in writing without notice and without assigning any reason whatsoever."

The probationer joined the services of the company on probation. The management terminated his services after 2 months of joining by a letter saying "we regret to terminate your services with immediate effect in terms of clause (I) of your appointment letter."

Do you think what management did is correct ? What are the remedies available to the probationer ?

(5 marks)

0 What is 'compounding of offences' ? Hew does compounding of offences take place under the Securities and Exchange Board of India Act, 1992 ?

(5 marks)

7.    a Mention the orders against which no appeal lies to the Securities Appellate Tribunal

(SAT).

(4 marks)

b "In presenting a case before the tribunal/quasi-judicial body, a Company Secretary owes duty to the court, to the client and to the opponent." Describe these duties of the Company Secretary.

(4 marks)

fc) Briefly explain the contents of a service contract. Draft a specimen agreement of employment of manager of a business concern.

(8 marks)

8.    a Write notes on the following :

(i) Communication etiquettes (i Advocacy tips to professionals.

(4 marks each)

b What is 'deed of assignment' ? Draft a specimen deed of assignment of copyright of a novel.

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2/2009/DAP (NS)

(8 marks)

Maximum marks : 100

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Time allowed : 3 hours

Total number of printed pages : 7

NOTE : 1. Answer FIVE questions including Question No.1 which is compulsory. All working notes should be shown distinctly.

2 Tables showing the present value of Re.1 and the present value of an annuity of Re.1 for 15 years are annexed.

1 Comment on any four of the following :

i Financial sector acts as ccnduit for the transfer of financial resources from net savers to net borrowers.

(i Under capital rationing, the standard net present value (NPV) decision rule no longer holds true.

ii) Most businesses need cash funds to meet contingencies.

iv) Apart from the retention of profits and capitalising the accumulated earnings, the bonus shares serve several other objectives.

(v) Foreign exchange risk can be managed both internally and externally.

(5 marks each)

2. fe) Mona Machines Ltd. has provided you the following information for the year

2008 :

Production for the year Finished goods in store Raw materials in store

consumption

Work-in-progress (assume 50% completion stage with full material consumption)

Credit allowed by creditors

Credit given to debtors (assume at selling price)

Selling price per unit Raw material cost Direct wages Overheads

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Company keeps Rs.1,00,000 in cash. There is regular production and sale cycle, and wages and overheads accrue evenly. Wages are paid in the next month of accrual. Material is introduced in the beginning of production cycle.

You are required to calculate working capital requirement of Mona Machines Ltd.

(10 marks)

(b) Silver Oak Ltd., an Indian company, is mainly engaged in international trade with US and UK. It is currently 1^st January. It will have to make a payment of $7,29,794 in the coming six months time. The company is presently considering the various alternatives in order to hedge its transactional exposure through its London office. The following information is available :

Exchange Rates :

$/ Spot rate    :    1.5617 - 1.5773

6-month $ forward rate    :    1.5455 - 1.5609

Money Market Rates    Borrow    Deposit

(%) (%)

US Dollar    6    4.5

Sterling    7    5.5

Foreign currency option prices (Cents per for contract size 12,500) :

Exercise Price    Call Option (June)    Put Option (June)

$1.70/    3.7    9.6

Suggest which of the following hedging option is the most suitable for Silver Oak Ltd. :

(i) Forward exchange contract

(i) Money market

ii Currency option.

(6 marks)

fc) Monark Ltd. is considering two alternative financial plans to start a new project. In Plan-I, it is likely to issue equity shares of Rs.16 lakh and 13% preference capital of Rs.4 lakh. In Plan-II, the company will issue equity shares of Rs.8 lakh, 13% preference capital of Rs.4 lakh, and 15% debentures of Rs.8 lakh. The face value of equity shares in both plans is Rs.10. Tax rate is 30%.

You are required to determine level of EBIT at which the EPS would be same under both the plans.

(4 marks)

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3.    a Vaibhav Ltd. is engaged in manufacturing of machines used in construction. It

is considering the possibility of purchasing from a supplier a component it now makes. A supplier has agreed to supply the component in the required quantities at a unit price of Rs.18. The transportation and insurance charges are Re.1 per unit.

Presently, the company produces the component from a single raw material in economic lots of 3,000 units at a cost of Rs.4 per unit. The average annual demand is 40,000 units. The annual holding cost for company is Re.0.50 per unit and it has set a minimum stock level of 800 units. The direct labour costs of the component are Rs.12 per unit. The company also hires a machine at a rate of Rs.400 per month on which the components are produced. Suggest whether the company should produce or procure the component.

(14 marks)

b) Two companies Rita Ltd. and Gita Ltd. are considering to enter into a swap agreement with each other. Their corresponding borrowing rates are as follows :

Name of Company    Floating Rate    Fixed Rate

Rita Ltd.    LIBOR    11%

Gita Ltd.    LIBOR + 0.3%    12.5%

Rita Ltd. requires a floating rate loan of 8 million while Gita Ltd. requires a fixed rate loan of 8 million.

(i) Show which company had advantage in floating rate loans and which company has a comparative advantage in fixed loans.

(i) If Rita Ltd. and Gita Ltd. engage in a swap agreement and the benefits of the swap are equally split, at what rate will Rita Ltd. be able to obtain floating finance and Gita Ltd. be able to obtain fixed rate finance ?

Ignore bank charges.

(6 marks)

4.    Distinguish between any four of the following :

i 'Factoring' and 'bill discounting'.

(i 'Operating lease' and 'finance lease'.

iii)    'Business risk' and 'financial risk'.

iv)    'Efficient portfolio' and 'optimal portfolio'.

(v) 'Translation risk' and 'transaction risk'.

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5. Alfa Ltd. is in the business of manufacturing bearings. Some more product lines are being planned to be added to the existing system. To manufacture the planned product lines, the firm needs a machine which if purchased outright will cost Rs.10,00,000. Modern Hire-Purchase and Leasing Co. has offered two proposals as below :

Proposal - I (Hire-Purchase)

Rs.2,50,000 will be payable on signing of the agreement. Three annual installments of Rs.4,00,000 will be payable at the end of each year starting from year first. The ownership of the machine will be transferred automatically at the end of third year. The company will be able to claim depreciation on straight line basis with zero salvage value.

Proposal - II (Lease)

Rs.20,000 will be payable towards initial service fee upon signing of the agreement which is tax-deductible expense. Annual lease rental of Rs.4,32,000 is payable at the end of each year starting from the first year for a period of three years.

Evaluate the above two proposals and advise the company as to which proposal implies lesser cost given that tax-rate is 35% and discount rate is 20%. (Calculations may be rounded off to Rupee.)

(20 marks)

6. a The following data is related to Raman Ltd.

Calculate

i Expected return on shares of Raman Ltd.; and (i Beta (0) value using Capital Asset Pricing Model (CAPM).

(14 marks)

b Following facts are available for Astro Ltd. :

i Cash turnover rate is 5;

(i Annual cash outflow is Rs.1,75,000; and

ii) Accounts payable can be stretched by 12 days.

What would be the effect of stretching accounts payable on the minimum operating cash requirements ? If the firm can earn 10% on its investments, what would be the savings on cost ? (Assume 360 days in a year.)

(6 marks) - td:/.

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i Financial instruments used for venture financing (i Factors affecting dividend policy of a firm

ii) Optimal capital structure

iv) Financing cost escalation

(v) Domestic resource cost.

(5 marks each)

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TABLE - 1 : PRESENT VALUE OF RUPEE ONE

RATE	YEAR 1	YEAR 2	YEAR 3	YEAR 4	YEAR 5	YEAR 6	YEAR 7	YEAR 8	YEAR 9	YEAR 10	YEAR 11	YEAR 12	YEAR 13	YEAR 14	YEAR 15
5%	0.9524	0.9070	0.8638	0.8227	0.7835	0.7462	0.7107	0.6768	0.6446	0.6139	0.5847	0.5568	0.5303	0.5051	0.4810
6%	0.9434	0.8900	0.8396	0.7921	0.7473	0.7050	0.6651	0.6274	0.5919	0.5584	0.5268	0.4970	0.4688	0.4423	0.4173
7%	0.9346	0.8734	0.8163	0.7629	0.7130	0.6663	0.6227	0.5820	0.5439	0.5083	0.4751	0.4440	0.4150	0.3878	0.3624
8%	0.9259	0.8573	0.7938	0.7350	0.6806	0.6302	0.5835	0.5403	0.5002	0.4632	0.4289	0.3971	0.3677	0.3405	0.3152
9%	0.9174	0.8417	0.7722	0.7084	0.6499	0.5963	0.5470	0.5019	0.4604	0.4224	0.3875	0.3555	0.3262	0.2992	0.2745
10%	0.9091	0.8264	0.7513	0.6830	0.6209	0.5645	0.5132	0.4665	0.4241	0.3855	0.3505	0.3186	0.2897	0.2633	0.2394
11%	0.9009	0.8116	0.7312	0.6587	0.5935	0.5346	0.4817	0.4339	0.3909	0.3522	0.3173	0.2858	0.2575	0.2320	0.2090
12%	0.8929	0.7972	0.7118	0.6355	0.5674	0.5066	0.4523	0.4039	0.3606	0.3220	0.2875	0.2567	0.2292	0.2046	0.1827
13%	0.8850	0.7831	0.6931	0.6133	0.5428	0.4803	0.4251	0.3762	0.3329	0.2946	0.2607	0.2307	0.2042	0.1807	0.1599
14%	0.8772	0.7695	0.6750	0.5921	0.5194	0.4556	0.3996	0.3506	0.3075	0.2697	0.2366	0.2076	0.1821	0.1597	0.1401
15%	0.8696	0.7561	0.6575	0.5718	0.4972	0.4323	0.3759	0.3269	0.2843	0.2472	0.2149	0.1869	0.1625	0.1413	0.1229
16%	0.8621	0.7432	0.6407	0.5523	0.4761	0.4104	0.3538	0.3050	0.2630	0.2267	0.1954	0.1685	0.1452	0.1252	0.1079
17%	0.8547	0.7305	0.6244	0.5337	0.4561	0.3898	0.3332	0.2848	0.2434	0.2080	0.1778	0.1520	0.1299	0.1110	0.0949
18%	0.8475	0.7182	0.6086	0.5158	0.4371	0.3704	0.3139	0.2660	0.2255	0.1911	0.1619	0.1372	0.1163	0.0985	0.0835
19%	0.8403	0.7062	0.5934	0.4987	0.4190	0.3521	0.2959	0.2487	0.2090	0.1756	0.1476	0.1240	0.1042	0.0876	0.0736
20%	0.8333	0.6944	0.5787	0.4823	0.4019	0.3349	0.2791	0.2326	0.1938	0.1615	0.1346	0.1122	0.0935	0.0779	0.0649
21%	0.8264	0.6830	0.5645	0.4665	0.3855	0.3186	0.2633	0.2176	0.1799	0.1486	0.1228	0.1015	0.0839	0.0693	0.0573
22%	0.8197	0.6719	0.5507	0.4514	0.3700	0.3033	0.2486	0.2038	0.1670	0.1369	0.1122	0.0920	0.0754	0.0618	0.0507
23%	0.8130	0.6610	0.5374	0.4369	0.3552	0.2888	0.2348	0.1909	0.1552	0.1262	0.1026	0.0834	0.0678	0.0551	0.0448
24%	0.8065	0.6504	0.5245	0.4230	0.3411	0.2751	0.2218	0.1789	0.1443	0.1164	0.0938	0.0757	0.0610	0.0492	0.0397
25%	0.8000	0.6400	0.5120	0.4096	0.3277	0.2621	0.2097	0.1678	0.1342	0.1074	0.0859	0.0687	0.0550	0.0440	0.0352

TABLE - 2 : PRESENT VALUE OF AN ANNUITY OF RUPEE ONE

RATE	YEAR 1	YEAR 2	YEAR 3	YEAR 4	YEAR 5	YEAR 6	YEAR 7	YEAR 8	YEAR 9	YEAR 10	YEAR 11	YEAR 12	YEAR 13	YEAR 14	YEAR 15
5%	0.9524	1.8594	2.7232	3.5460	4.3295	5.0757	5.7864	6.4632	7.1078	7.7217	8.3064	8.8633	9.3936	9.8986	10.3797
6%	0.9434	1.8334	2.6730	3.4651	4.2124	4.9173	5.5824	6.2098	6.8017	7.3601	7.8869	8.3838	8.8527	9.2950	9.7122
7%	0.9346	1.8080	2.6243	3.3872	4.1002	4.7665	5.3893	5.9713	6.5152	7.0236	7.4987	7.9427	8.3577	8.7455	9.1079
8%	0.9259	1.7833	2.5771	3.3121	3.9927	4.6229	5.2064	5.7466	6.2469	6.7101	7.1390	7.5361	7.9038	8.2442	8.5595
9%	0.9174	1.7591	2.5313	3.2397	3.8897	4.4859	5.0330	5.5348	5.9952	6.4177	6.8052	7.1607	7.4869	7.7862	8.0607
10%	0.9091	1.7355	2.4869	3.1699	3.7908	4.3553	4.8684	5.3349	5.7590	6.1446	6.4951	6.8137	7.1034	7.3667	7.6061
11%	0.9009	1.7125	2.4437	3.1024	3.6959	4.2305	4.7122	5.1461	5.5370	5.8892	6.2065	6.4924	6.7499	6.9819	7.1909
12%	0.8929	1.6901	2.4018	3.0373	3.6048	4.1114	4.5638	4.9676	5.3282	5.6502	5.9377	6.1944	6.4235	6.6282	6.8109
13%	0.8850	1.6681	2.3612	2.9745	3.5172	3.9975	4.4226	4.7988	5.1317	5.4262	5.6869	5.9176	6.1218	6.3025	6.4624
14%	0.8772	1.6467	2.3216	2.9137	3.4331	3.8887	4.2883	4.6389	4.9464	5.2161	5.4527	5.6603	5.8424	6.0021	6.1422
15%	0.8696	1.6257	2.2832	2.8550	3.3522	3.7845	4.1604	4.4873	4.7716	5.0188	5.2337	5.4206	5.5831	5.7245	5.8474
16%	0.8621	1.6052	2.2459	2.7982	3.2743	3.6847	4.0386	4.3436	4.6065	4.8332	5.0286	5.1971	5.3423	5.4675	5.5755
17%	0.8547	1.5852	2.2096	2.7432	3.1993	3.5892	3.9224	4.2072	4.4506	4.6586	4.8364	4.9884	5.1183	5.2293	5.3242
18%	0.8475	1.5656	2.1743	2.6901	3.1272	3.4976	3.8115	4.0776	4.3030	4.4941	4.6560	4.7932	4.9095	5.0081	5.0916
19%	0.8403	1.5465	2.1399	2.6386	3.0576	3.4098	3.7057	3.9544	4.1633	4.3389	4.4865	4.6105	4.7147	4.8023	4.8759
20%	0.8333	1.5278	2.1065	2.5887	2.9906	3.3255	3.6046	3.8372	4.0310	4.1925	4.3271	4.4392	4.5327	4.6106	4.6755
21%	0.8264	1.5095	2.0739	2.5404	2.9260	3.2446	3.5079	3.7256	3.9054	4.0541	4.1769	4.2784	4.3624	4.4317	4.4890
22%	0.8197	1.4915	2.0422	2.4936	2.8636	3.1669	3.4155	3.6193	3.7863	3.9232	4.0354	4.1274	4.2028	4.2646	4.3152
23%	0.8130	1.4740	2.0114	2.4483	2.8035	3.0923	3.3270	3.5179	3.6731	3.7993	3.9018	3.9852	4.0530	4.1082	4.1530
24%	0.8065	1.4568	1.9813	2.4043	2.7454	3.0205	3.2423	3.4212	3.5655	3.6819	3.7757	3.8514	3.9124	3.9616	4.0013
25%	0.8000	1.4400	1.9520	2.3616	2.6893	2.9514	3.1611	3.3289	3.4631	3.5705	3.6564	3.7251	3.7801	3.8241	3.8593

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374

Time allowed : 3 hours    Maximum marks : 100

Total number of questions : 8    Total number of printed pages : 4

NOTE : All references to sections relate to the Companies Act, 1956 unless stated otherwise.

PART-A

(Answer Question No.1 which is compulsory and any three of the rest from this part.)

1 (a) State whether the following statements are correct or incorrect citing briefly relevant previsions of the law :

i Court cannot refuse to sanction a scheme of arrangement which has been approved by majority of shareholders/creditors of the companies concerned.

(i) Court would not insist on prior approval of stock exchange(s) while sanctioning a scheme of arrangement.

iii)    The word 'amalgamation' or 'merger' is not defined anywhere in the Companies Act, 1956.

iv)    The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,

1997 also apply to acquisition of global depository receipts (GDRs) or American depository receipts (ADRs).

(v) Filing of draft letter of offer with SEBI should be deemed or construed as conclusive evidence that the same has been vetted or approved by SEBI.

(vi) An offer made by the acquirer can be withdrawn unconditionally at any time without any demur or resistance of any party since the acquirer is at liberty to withdraw his offer.

(ii) The order of court sanctioning the scheme of arrangement is final and effective. Companies need not do any thing thereafter in respect of courts sanction.

(2 marks each)

(t) Distinguish between 'management buy-out' and 'management buy-in'.

(3 marks)

0 A company whose shares were listed on a stock exchange for 3 months as on the relevant date made preferential allotment at Rs.100 per share. On completing the period of 6 months of being listed on the stock exchange, the company recomputed the share price based on the guidelines issued by SEBI in this respect and price of share so recomputed came to Rs.150 per share. The company demanded additional amount of Rs.50 per share from the allottees of shares. Is the action of the company justified ? Give reasons.

(4 marks)

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d) Grow Well Ltd. wants to adept strategic planning to ensure its growth in the present day highly competitive scenario. As part of the management team, you are assigned with the role of highlighting the essential features such a planning should have. Suggest the features which you consider are vital for any strategic planning.

(4 marks)

2.    fe) "Section 391 is a boon to the corporate restructuring." Critically examine the

statement and discuss the relevant provisions relating to corporate restructuring.

(8 marks)

(b Will the court sanction a scheme of amalgamation where companies to the scheme tend to reshuffle their objects clause in the memorandum of association ? Support your answer with case law.

(4 marks)

fc) Relax Movies Ltd. is going for takeover of another company. Your advice is sought whether the company has to go for mandatory bidding. Advise with reference to the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

(3 marks)

3.    a Whether in a scheme of arrangement the meeting of shareholders and creditors

can be dispensed with ? Supplement your answer with the help of case law.

(4 marks)

b) Whether non-compliance with the disclosure and related requirement is a violation of the SEBI Takeover Code ? Give your answer by referring to case law.

(4 marks)

(c) Explain whether the transferee company is required to increase its authorised share capital by following the procedure laid down in the Companies Act, 1956 even though after amalgamation its authorised share capital is sufficient to issue shares to the shareholders of transferor company.

(4 marks)

d) Briefly state whether permission of the Reserve Bank of India is necessary for the compromise and arrangement of non-banking finance company (NBFC) with a bank.

(3 marks)

4.    a Discuss 'funding through rehabilitation finance' as a source of funds for mergers/

takeovers.

(6 marks)

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(b Draft a suitable Beard resolution with respect to takeover for the following :

i Appointment of a merchant banker.

(i Opening of an Escrow account.

(3 marks each)

c Can shareholders seek an amendment to the swap ratio in the scheme of merger ? Supplement your answer by referring to case law.

(3 marks)

5. a) What are the safeguards incorporated in takeover process so as to ensure that shareholders get their payments under the offer or receive back their share certificates ?

(4 marks)

b) Gopal has acquired shares in Aadil Ltd., but he is yet to be registered as a member. He has made an application to the court for modification in the scheme proposed under section 391. Is he entitled under the Companies Act, 1956 to move such an application ?

(4 marks)

fc) The capital structure of Johar Ltd. is as follows :

-    5 lakh equity shares of Rs.10 each fully paid-up.

-    10 lakh equity shares of Rs.10 each on which Rs.5 is paid-up.

-    Free reserves of Rs.3 crore.

The Board of directors of the company has passed a resolution authorising the buy-back of shares worth Rs.40 lakh for the financial year 2009-10. Is the Board of directors empowered to do so ? Give reasons.

(4 marks)

(d) Abhay Ltd. has filed a petition before the High Court of Bombay for sanction of a scheme of amalgamation with Gel Well Ltd., and the petition is posted for hearing to Monday, the 8^th March, 2010. The court has ordered to serve notice of the hearing of the petition on the creditors. As the Company Secretary of Abhay Ltd., craft the notice.

(3 marks)

PART-B

(Answer ANY TWO questions from this part.)

6. a) Laxmi Bank Ltd. has approached you for your professional advice about the rights available to it for enforcing the security interest under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. Highlight the rights and the advantages to the tank by resorting to that mode of recovery citing the relevant provisions of the said Act.

(5 marks)

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b Kuber Bank Ltd. has obtained a decree from a civil court to recover an amount of Rs.20 lakh with 12% interest and the court has allowed it to proceed against the commercial building given as security for the loan. Can the decree be treated as a debt under the SARFAESI Act, 2002 ? Cite the relevant provisions of law in support of your answer.

(5 marks)

0 Amir Bank has issued a bank guarantee for and on behalf of Madhuri Ltd., an industrial company in connection with loans granted to the company. The company became sick. While the proceedings before Board for Financial and Industrial Reconstruction (BIFR) is going on, the beneficiary of the bank guarantee invoked it and demanded payment from Amir Bank. The bank has sought your expert opinion in the matter. Give your opinion based on legal provisions and judicial decisions.

(5 marks)

7.    a) Explain the role of BIFR and the concerned High Court in winding-up of a sick

industrial company mentioning the relevant provisions of the law and judicial decision (s).

(5 marks)

b There was an agreement between a company having its registered office at Delhi with its creditors having their office at Mumbai. It contained a clause that in case of dispute between them, only the courts in Mumbai will have the jurisdiction. On the basis of the clause, the creditors filed a winding-up petition before High Court of Bombay. The company has asked your professional opinion i_n the matter. How will you advise the company ?

(5 marks)

d Recovery Officer under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 has issued an order and the defendant wants to challenge the order. What will be your advice to the defendant based on the relevant provisions in the Act ?

(5 marks)

8.    a) The trade union of workers of a company has filed a winding-up petition of their

company. State the legal position citing relevant case law.

(5 marks)

b Debt Recovery Tribunal (DRT) has passed an interim order attaching the property of the defendant. The defendant wants to challenge this order on the ground that DRT has no power to pass interim orders. Explain the legal provisions in this regard.

(5 marks)

c As the Company Secretary of a company, mention your duties in respect of compulsory winding-up.

--o--

2/2009/CRI (NS)

(5 marks)

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ri m

Time allowed : 3 hours    Maximum marks : 100

Total number of questions : 8    Total number of printed pages : 4

PART-A

(Answer ANY TWO questions from this part)

1 a "Organisations are becoming more responsive, flexible and adaptable to changing business situation." Comment with example.

(5 marks)

(b IOC Ltd. has changed its vision statement to capture the collective aspirations of its stakeholders to create a 'shared vision' rather than 'vision shared'. Comment.

(5 marks)

0 Discuss Porter's Five Forces Model of industry analysis.

(5 marks)

(d Describe the main approaches to evaluation of strategic alternatives.

(5 marks)

2. Read the following extract from the annual report of Sterlite Industries (India) Ltd.. and answer the questions given at the end :

"Our business and operations are subject to a variety of risks and uncertainties which are no different from any other company in general and cur competitors in particular. Risks are identified through a formal risk management programme with the active involvement of business managers and senior management personnel at both the subsidiary level as well as the corporate level. Each significant risk has an 'owner' within the group at a senior level, and the impact to the group, if a risk materialises and its likelihood of crystallization is regularly reviewed. A risk register and matrix is maintained, which is regularly updated in consultation with business managers. The risk management process is coordinated by our management assurance function and is regularly reviewed by our Audit Committee. Key business decisions are discussed at the monthly meetings of the Executive Committee and senior managers address risk management issues when presenting initiatives to the Executive Committee. The overall internal control environment and risk management programme is reviewed by our Audit Committee on behalf of the Board of directors.

The areas identified for risk management by the company include - Treasury Management; Commodity Risks; Political, Legal, Economic and Regulatory Risks; Ore Reserves and Resources; Delivery of expansion projects on time and within budget; ASSET use and Insurance; Safety, Health and Environment Risks; Operational Risks; Financial Risks; Liquidity; Foreign Currency; Interest Risks; Counterparty Risks; and Employees.

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During the year 2008-09, the world witnessed several mine closures, production cutbacks and deferral of projects. Despite such negative market sentiments and a depressed outlook for demand, we remain focused cn our basic objectives of achieving a least-cost position and developing low capital cost projects on or ahead of schedule and within budgets. Thus the year 2009-10 augurs well."

Questions

i What is risk management ?

(i What are the major steps in risk management process ?

ii) Who is responsible for putting in place risk management process ?

iv) What is the risk management style in the company ?

(v) What could be the possible reasons to have negligible provision for bad and doubtful debts ?

(4 marks each)

3.    a) Critically examine the major characteristics of Information Systems (IS).

(8 marks)

b) In the context of Management Information Systems (MIS), state, with reasons in brief, whether the following statements are correct or incorrect :

i Study of MIS is about the use of computers.

(i More data in reports means more information for managers.

ii) Accuracy in reporting is of vital importance.

iv) Strategic information meets information requirements of the top management.

(2 marks each)

fc) "Internal control can provide only reasonable, but not absolute assurance that the objectives are achieved." Critically examine the statement with four inherent limitations of internal control systems.

(4 marks)

PART-B

(Answer ANY ONE question from this part.)

4.    fe) Explain whether every technical collaboration is a strategic alliance.

(5 marks)

b) Explain briefly the various types of strategic alliances.

(5 marks)

(c) What are the advantages of a technical collaboration ?

(5 marks)

(d What are the important factors for the success of a technical collaboration ?

(5 marks)

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5.    Modern Pharmaceuticals Ltd., India (hereinafter called the First Party), is entering into a joint-venture agreement with Afro-Drugs, Nigeria (hereinafter called the Second Party) to incorporate a new company in India for setting-up a pharmaceutical manufacturing project. In this context, answer the following :

a) What is the nature of the joint-venture project ?

(5 marks)

b Draft the following clauses to be included in the joint-venture agreement/articles of association of the new company :

0 Allotment of shares to the First Party and Second Party with lock-in-period.

(i Suitable restrictions on the transfer of shares during the lock-in-period.

ii Exit route.

iv) Right to first refusal in case any party decides to exit.

V) Arbitration under the London Court of International Arbitration.

(3 marks each)

PART-C

(Answer ANY TWO questions from this part.)

6.    Write notes on any four of the following :

i Controversy on Regional Free Trade Agreements.

(i) Advantages of India joining the Association of South-East Asian Nations (ASEAN).

iii)    Main objectives of the World Trade Organisation (WTO).

iv)    Rules of origin.

(v) Dispute Settlement System - rules-based or justice-based.

(5 marks each)

7.    a Prepare an executive note for the Director (R&D) explaining the roles and functions

of the Trade-Related Aspects of Intellectual Property Rights (TRIPS), World Intellectual Property Organisation (WIPO) and Patent Cooperation Treaty (PCT).

(10 marks)

b Briefly explain the dispute settlement procedure of the WTO with particular reference to dispute settlement body and provision for appeal and decision-making process.

(10 marks)

8.    Attempt any five of the following :

6) Explain 'domestic industry' in the context of dumped goods.

(4 marks)

(i) Explain the 'principle of distortion'.

(4 marks)

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iii)    "Presently Indian exporters are facing ncn-tariff barriers and quantitative restrictions from the European Union facing economic slowdown." In this context, distinguish between the 'non-tariff barriers' and 'quantitative restrictions'.

(4 marks)

iv)    The Indian manufacturers of industrial goods and chemicals have complained to the Director General of Safeguard, Ministry of Finance, about heavy losses suffered by them due to cheap import of industrial goods and chemicals from China. State whether the Director General of Safeguard should exercise total control over import of industrial goods and chemicals or impose import duties on the imported industrial goods and chemicals.

(4 marks)

(v) The European Union has registered complaint with the WTO that India is restricting import of foreign liquor by imposing very high duties. Comment on the Indian plea that sale of liquor in India is a State subject.

(4 marks)

(i) US has imposed a 98.4% anti-dumping duty against the Chinese imports of steel pipes, besides additional countervailing duties to off-set the subsidies given by China on steel pipes. What remedy is available to China ?

(4 marks)

2/2009/SMAIT (NS)

Rll N..........................

Time allowed : 3 hours    Maximum marks : 100

376

Total number of questions : 8    Total number of printed pages : 9

NOTE : All references to sections mentioned in Part-A of the Question Paper relate to the Income-tax Act, 1961 and relevant Assessment Year 2009-10, unless stated otherwise.

PART-A

(Answer ANY TWO questions from this part.)

1 a Choose the most appropriate answer from the given options in respect of the following :

Which of the following does not fall under the State List as stipulated in the Article 246 read with Schedule VII of the Constitution of India

a    Excise on alcoholic liquors and narcotics

b)    Taxes on consumption and sale of electricity

c    Taxes on advertisements in newspapers

d)    Taxes on advertisements other than those contained in newspapers.

(i If a company assessee has not filed the prescribed income-tax return within the prescribed time limit, carry forward of losses sustained under the head 'profits and gains of business or profession' or 'capital gains' and its set-off will not be permitted as per the provisions of

a Section 139(3) read with section 80

(b Section 139(1)

0 Section 139(4)

d) Section 139(5).

(iii) Credit of Minimum Alternate Tax (MAT) in respect of excess amount of tax paid under section 115JB could be carried forward from assessment year 2006-07 onwards for

(a)    5 Assessment years

(b)    7 Assessment years

(c)    8 Assessment years d)    4 Assessment years.

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(i) Which of the following reflects the correct position regarding the binding powers of the Central Board of Direct Taxes (CBDT)

a)    The instructions of the CBDT are binding on the department and the assessee

b)    Courts are bound by the instructions of the CBDT

fc) The instructions are binding on the department, but not on the assessee

(d) The instructions by the CBDT may impose a burden on the assessee.

() An association of persons and body of individuals who are subject to tax audit in the immediately preceding financial year, making payment to resident contractor under section 194C

fe) Are not liable to deduct tax at source

b Shall be liable to deduct tax at source

fc) Are liable to deduct tax at source, if the turnover during the current year exceeds Rs.40 lakh

(d None of the above.

(1 mark each)

b Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s) :

Section 2(23A) defines 'foreign company' as a company, which is _.

However, all non-Indian companies are not necessarily_.

(i The Appellate Tribunal's decision would have_within the jurisdiction

and has a_value outside the concerned jurisdiction.

ii) A loss incurring company and a profit making company may _ in

order to reduce the overall incidence of_under the Income-tax Act,

1961.

(iv) Depreciation on a generator purchased and kept as stand by will be allowed

in spite of the same not put to use, as it has_use by the assessee

during the year.

() The return of income has to be signed by the_ in the case of company

and in his absence by one of the_.

(1 mark each)

fc) Examine whether the following are 'assets' under the provisions of the Wealth-tax Act, 1957 :

i A commercial complex.

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(i A building occupied by the assessee for business purposes.

iii)    Aircrafts owned and used by the assessee for business purposes.

iv)    Land owned by the assessee situated outside a municipality but within a notified area.

() Jewellery, bullion and utensils made of precious metals.

(1 mark each)

2. a) State, with reasons in brief, whether the following statements are correct cr incorrect :

i Taxes on income and corporation tax are collected by the Central Government and distributed between the Union and States.

(i) Companies formed under section 25 of the Companies Act, 1956 without any profit motive, trade, professional or similar associations become liable to tax under the Income-tax Act, 1961 under certain circumstances.

iii) The minimum penalty for repayment of deposits in contravention of section 269T is Rs.25,000 and is imposed by the Assessing Officer.

(2 marks each)

b) Modern Ltd. entered into an agreement with Synergy Ltd. for granting on lease to Synergy Ltd. its 8,000 sq. mtrs. land lying vacant adjacent to the factory premises of Synergy Ltd. for a period of 12 years commencing from May, 1996.

Under the terms of the agreement, Synergy Ltd. had to build a factory building, pay an annual rent @ Rs.100 per sq. mtr. of the leased land of 8,000 sq. mtrs. and surrender the building to Modern Ltd. at the end of the lease without any consideration. Synergy Ltd. complied with the terms and conditions of the lease agreement.

The depreciated value of the building surrendered and taken possession by Modern Ltd. in May, 2008 was Rs.4.22 crore. Accounts department of Modern Ltd. is of the opinion that an equivalent amount is to be taken in the accounts of the year 2008-09 as income received.

Critically examine the matter and offer your comments.

(3 marks)

0 "Mona Industries Ltd. had incurred substantial expenditure on foreign tours undertaken by the Chairman and Managing Director for setting-up of two new factories. The amount was claimed as a business expenditure." Comment.

(3 marks)

(d) "Under certain circumstances, the Commissioner of Income-tax cannot revise the order of his subordinate authority under section 264." Explain.

(3 marks)

376

3.    a) A new 100% deduction has been introduced recently to encourage the business of

operating and maintaining hospitals located anywhere in India, other than excluded areas, subject to specified conditions. Explain briefly those conditions.

(5 marks)

b) "The Assessing Officer has no power to make adjustment of any kind to income returned by an assessee at the time of processing the return of income under section 143(1)." Critically examine the statement.

(5 marks)

fc) State the procedure to be followed in the following cases :

0    Company seeks relaxation for admission of time-barred claims.

(2 marks)

(i Company seeks the return of books seized in the course of search made under section 132.

(3 marks)

PART-B

(Answer Question No.4 which is compulsory and any two of the rest from this part.)

4.    a) Choose the most appropriate answer from the given options in respect of the

following :

1    For the purpose of central excise, the following is a 'manufacture'

a)    Filteration/purification of commercial grade castor oil

b)    Cutting and polishing of diamonds 0 Testing and quality control

d) Making coffee beans from raw coffee berries.

(i Under the central excise law, the following are not 'goods'

(a) Immovable iron and steel structures

b) Structures like bridges, lock gates, towers, trusses and column frames in their movable state

fc) Plates, rods, angles, sections, section tubes and the like in their pre-assembled or disassembled state

d) ESC girders manufactured in casting yard and not at site and then taken for launch on sub-structure.

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iii)    levy of excise duty in respect of the following does not fall within the exclusive powers conferred on the Parliament/Union Government by the Constitution of India

a) Tobacco and other goods b Medicinal and toilet preparations

0 Medicinal and toilet preparations containing alcoholic liquor, opium or narcotics

(d Alcoholic liquors for human consumption, cpium and narcotic drugs.

iv)    In determination of the value of imported goods, the following costs are not to be added if they are not already included in the invoice price

fe) Commission and brokerage

b Cost of containers which are treated as being one with the goods for customs purpose

fc)    Buying commission

(d    Cost of packing whether labour or materials.

(v The    form for 'bill of entry' for warehousing is printed on

fe)    White paper

b    Yellow paper

(c)    Green paper

(c)    Light pink paper.

(v) For offences committed under sections 132 to 135 of the Customs Act, 1962, a court shall take cognizance

a    Suo motu

b    When it is brought to the notice of a court by anybody

fc)    With the previous sanction of the Commissioner of Customs

(d    None of the above.

(ii) An ad hoc exemption from customs duty to non-government organisation will be issued subject to condition

a That the imported goods will not be put to any commercial use

b That the imported goods will not be sold, gifted or parted by the importer in any manner

fc) That (a) and (b), as above, alongwith prior permission of the Ministry of Finance

(d None of the above.

(1 mark each)

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b Re-write the following sentences after filling-in the blank spaces with appropriate wcrd(s)/figure(s) :

i As per the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, the term 'produced' includes _.

(i) Under section 13 of the Customs Act, 1962, duty is not payable on pilferred goods only in case where the goods are pilferred after the unloading and before the issue of_.

ii) Section 18 of the Customs Act, 1962 provides for_of duty.

(i) Any goods on which import duty has not been paid and which are entered for exportation under section 74 of the Customs Act, 1962 shall be liable to _ under section 113 of the Act.

() It follows from the definition of 'excise duties' that for anything to be liable

to excise duties it must be goods and_and it must be produced or

manufactured in India.

(vi) Recording of sound or other phenomena on audio or video tape _

under excise law.

(vi) If the raw material is supplied on principal to principal basis (e.g. Eala Ltd.

supplies raw materials to job workers), the supplier is_under excise

law?.

(iii) Under section 35(1), any person aggrieved by any decision or order passed under the Central Excise Act, 1944 by an officer lower in rank than a Commissioner may appeal to the Commissioner (Appeals) by filing an appeal within_ from the date of communication of the order contested.

(1 mark each)

0 Discuss the essential ingredients of the concept of 'manufacture' under the Central Excise Act, 1944 and as outlined by the Supreme Court in Union of India vs. Delhi Cloth and General Mills and others.

(5 marks)

O R

In the following events, state when does the taxable event occur in the course of imports under the customs law with reference to the principles laid down by the Supreme Court in the cases of Garden Silk Mills Ltd. Vs. Union of India; and Kiran Spinning Mills Vs. CC :

(i) Unloading of imported goods at the customs port;

(i) Date of entry into Indian territorial waters;

(iii) Date on which the goods cross the customs barrier; and

iv) Date of presentation of bill of entry.

(5 marks)

376

5.    a Discuss in brief the essential features of the following under central excise law

and give one example of each :

i Specific rates of duty;

(i) Tariff values; and

(iii) Duty based on MRP.

(2 marks each)

b An excisable product is covered under the provisions of the Standards of Weights and Measures Act, 1976 and falls in the category of 'specified goods' subject to excise duty on the basis of retail sale price. Following particulars are made available :

MRP printed on the package is Rs.10,894 per unit. The price is inclusive of excise duty of 14% and education and secondary and higher education cess at the currently applicable rates as per the Finance Act, 2008.

Compute the assessable value, excise duty and cess payable if it is eligible for an abatement of 38%.

(5 marks)

c Distinguish between conditions for availing CENVAT credit in respect of 'duty paid on inputs' and 'duty paid on capital goods'.

(4 marks)

6.    a Write a note on 'compounded levy scheme' under the central excise law.

(5 marks)

b "Circulars of the Central Board of Excise and Customs cannot prevail over law laid down by the Apex Court." Examine the statement, considering the relevant provisions of the Central Excise Act, 1944 read with Article 141 of the Constitution of India and the relevant case(s) decided by the Apex Court.

(5 marks)

c "With the advent of VAT regime, the multiplicity of rates prevalent till then has been reduced to four broad categories." Elucidate.

(5 marks)

7.    fe) Following particulars are available in respect of certain goods imported into India :

FOB price : US$30,000

Exchange rate :

Notified by RBI Rs.50 = US$1

Notified by CBEC Rs.48 = US$1

Compute the assessable value as per the Customs Act, 1962 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

(5 marks)

376

b A commodity is imported into India from a country covered by a notification issued by the Central Government under section 9A of the Customs Tariff Act, 1975. Following particulars are made available :

CIF value of the consignment : US$25,000

Quantity imported : 500 kgs.

Exchange rate applicable : Rs.50=US$1

Basic customs duty : 20%

Education and secondary and higher education cess as applicable as per the Finance Act, 2008.

As per the notification, the anti-dumping duty will be equal to the difference between the cost of commodity calculated @ US$70 per kg. and the landed value of the commodity as imported.

Appraise the liability on account of normal duties, cess and the anti-dumping duty.

Assume that only 'basic customs duty' (BCD) and education and secondary and higher education cess are payable.

(5 marks)

0 Anand Ltd. has imported certain goods which were confiscated on the grounds that the appellant had mis-declared some goods in terms of value and some were found mis-declared in terms of description, value and quality and that personal penalty was imposed on the company and its directors. Critically examine the above facts and the justifiability of the action taken, having regard to relevant recent judicial rulings.

(5 marks)

PART-C

8. Attempt any four of the following :

(i) Several Indian companies are migrating abroad to minimise their tax obligations and to avail of lower rates of tax. Discuss with reference to our current levels of tax on incomes.

(5 marks)

(i Explain how the arm's length price in relation to an international transaction is computed under the comparable uncontrolled price method as per Rule 10B of the Income-tax Rules, 1962.

(5 marks)

ii) Discuss the modes of granting relief under avoidance of double taxation agreements and the effect of such agreements between the Government of India and the governments of other countries under section 90A of the Income-tax Act, 1961.

(5 marks)

376

(i) Explain the salient features of the tax incentives available to foreign institutional investors (FIIs) under the provisions of section-115AD of the Income-tax Act, 1961.

(5 marks)

() Explain the powers of the Authority for Advance Rulings in regard to rejection of an application and modification of an order.

(5 marks)

(i) Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s) :

a) The credit for taxes paid_should be allowed in the year in which the

foreign taxed income is_ in India.

b Under the income test, a foreign corporation is considered a passive foreign

investment company (PFIC) if _ percent or more of the foreign

corporation's gross income for the taxable year consist of passive income.

fc) Organisation for Economic Co-operation and Development - Model Convention

(OECD-MC) defines double taxation as 'the imposition of _ in two (or

more) States on the same tax payer in respect of the same subject matter and for identical periods'.

d) Rule 10A(a) dealing with the Transfer Pricing defines an

'uncontrolled transaction' to mean a transaction between enterprises other than_, whether resident or non-resident.

e Anti-dumping and countervailing duties are imposed under the _

Act.

(1 mark each)

--o--

2/2009/ATLP (NS)

Attachment: the-institute-of-company-secretaries-of-india-2009--6742-1.pdf the-institute-of-company-secretaries-of-india-2009--6742-2.pdf the-institute-of-company-secretaries-of-india-2009--6742-3.pdf the-institute-of-company-secretaries-of-india-2009--6742-4.pdf the-institute-of-company-secretaries-of-india-2009--6742-5.pdf the-institute-of-company-secretaries-of-india-2009--6742-6.pdf

Earning:   Approval pending.