225

RollNo..........................

Timeallowed:3hours Maximummarks:100

Totalnumberofquestions:8 Totalnumberofprintedpages:6

NOTE: 1. AnswerSIXquestionsincludingQuestionNo.1whichiscompulsory.
2. All references to sections relate to the Companies Act, 1956 unless stated
otherwise.

1. Distinguishbetweenthefollowing:
(i) Wholetimesecretaryandsecretaryinwholetimepractice.
(ii) Executivedirectorandindependentdirector.
(iii) Statutoryauditandspecialaudit.
(iv) Companyandpartnership.
(v) Debenturesandshares.
(4markseach)

2. (a)TheBoardofdirectorsofacompanyhavingapaidupcapitalofRs.50lakhbya
resolutionapprovedtheappointmentofasolesellingagentundersection294AA.The
extraordinarygeneralmeetingofthecompanydisapprovedtheappointmentofthe
solesellingagent.Discusstheconsequencesofsuchdisapproval.
(4marks)
(b) Whetherconsiderationforsharescanbepaidinkind? Inacompany,shareswere
allotted in return for sugarcane growing land transferred to the company. In the
windingupproceedings,itwasallegedthatthevalueoflandwasonetenthof
thevalueofsharesallotted.Whetheracourtcaninterfereinthemattertoremedythe
position?Discuss.
(4marks)
(c) Oneofthejointholdersappliedtoacompanyrequestingforthesplittingof300equity
sharesequallyamongthejointholdersbyissuingfreshsharecertificatestoeachofthe
threejointholdersseparately. Isthecompanyboundtocomplywiththisrequest?
Givereasons.
(4marks)
(d) Amol&Co.,aproprietoryfirmofAmol,aCharteredAccountantinpractice,hasbeen
appointedasthestatutoryauditorbyaprivatelimitedcompany.Subsequently,itcame
tolightthatMrs.Amolhasbeenholdinglessthan1%ofthesharesofthatcompany.
Willthisvitiatetheappointmentofthestatutoryauditor?Answerwithreasons.
(4marks)
3. (a)AsiaPacificCo.Ltd.,calleditsannualgeneralmeetingon30 thSeptember,2001and
adjourneditto31stDecember,2001duetodelayincompletionofauditofaccountsfor
theyearended31stMarch,2001.Attheadjournedmeeting,themeetingwasfurther
adjournedto31stMarch,2002.Subsequently,theannualgeneralmeetingwasheldon
28thJanuary,2002.Statewhetherthecompanyhascompliedwithsection166and,if
not,whetherthecompanyisliabletodefaultandconviction.
(8marks)
(b) ABCPvt.Ltd.waspromotedbythreegroupsA,BandC.Eachgroupwasholding
onethirdofthepaidupcapitalofthecompany.TheBoardofdirectorscomprisesof
three directors Ajay, Bidur and Chanakaya representing the group A, B and C
respectively.Thecompanywasengagedinthebusinessofconstructionoftenements.
Ithadacquired60acresoflandintheyear1985forasumofRs.60lakh.Themarket
valueofthelandason31stMarch,2005isRs.6crore.
Inspiteofthebesteffortsbythecompany,theprojectscouldnotbecompletedandall
theprojectsareinhaphazardcondition.Thecompanyisfacingfinancialdifficulties.
Recently,Chanakyahasstartedfeelingthatheisbeingneglectedandisnottakeninto
confidenceintakingbusinessdecisions.ChanakyarepresentinggroupContheBoard
ofdirectorshasfiledapetitionundersection397/398fornotcalling himforthe
Boardmeetings,irresponsiblebehaviourofAjayandBidurleadingtofinancial
distressandhasclaimedaconsiderationofRs.2crorefortransferringhissharesto
groupsAandB.Willhesucceed?
(8marks)

4. Commentonanyfourofthefollowingstatements:
(i) Unsecuredloansfrompromotersarealwaystreatedasexemptdeposits.
(ii) Inafurtherissueofsharecapitalbyapubliccompany,sharesmustalwaysbeissuedto
itsexistingshareholders.
(iii) Incertaincases,prospectusneednotbeissued.
(iv) Thedebenturetrusteesprotecttheinterestsofthedebentureholders.
(v) Acompanydoesnothaveunlimitedpowerstoalteritsarticlesofassociation.
(4markseach)

5. (a)Whatisregisteredofficeofacompany? Withinwhatperiodacompanymust
havearegisteredoffice?
(4marks)

(b) HumTumLtd.,acompanyhavingashareholdersfundofRs.80croreofwhichRs.30
crore is free reserves, desires to make a loan of Rs.20 crore to Young Ltd. The
companyhasalreadyinvestmentsinandmadeloanstovariousotherbodycorporates
totheextentofRs.35crore.CanthisloanbegivenbyaresolutionoftheBoardof
directors?
(4marks)
 (c) Ramesh,ashareholderinModLtd.,desirestonominatehiswifeRadhaasanominee
in respect of his shareholdings. Can Mod Ltd. accept the nomination so made ?
Advisethecompany.
(4marks)
(d) A representative of a foreign company in India was only receiving orders from
customers.Statewhethertheplacewheretheorderssoreceivedbetermedasaplace
ofbusiness.
(4marks)

6. (a)Whilesanctioningworkingcapitallimit,therateofinteresthasbeenfixedata
specifiedpercentageabovethebankrateasnotifiedbytheRBI.Therewasachange
intheinterestrateduetoRBInotificationissuedlater.Thebankinsistedonfilinga
returnofmodificationofcharges.Isthestandofthebankcorrect? Discusswith
reasons.
(5marks)
(b) ArticlesofassociationofacompanyhasputacapofRs.10,000onsittingfee.There
isaproposaltoincreasethesittingfeefrompresentamountofRs.8,000toRs.20,000.
Advisethecompany.
(5marks)
(c) AcompanyfiledFormNos.17and13intriplicatedulysignedbyboththebankand
companysauthorisedpersonnelforthesatisfactionofchargesbasedonthebanks
letterissuedoneweekafterthedateofpaymentofcharge(loan)butwithin30days
fromthispaymentdate.TheRegistrarofCompaniesinsistedthattheletterofthebank
foracceptingthesatisfactionofchargebefiledwithFormNos.17and13andalso
insistedonissueofnoticetotheholderofthecharge,i.e.,thebank.Healsodecided
thatthedateoffilingshouldbecomputedfromthedateofbanksletter.Discussthe
correctnessofhisviews.
(6marks)

7. (a)TejiPvt.Ltd.receivedachequeofRs.10lakhtowardstheshareapplicationmoney
fromVinodon31stMarch,2005.Onthesameday,theBoardofdirectorsallottedthe
shares, filed necessary returns and issued the share certificate. The cheque was
subsequentlydepositedwiththebankwhichbounced.Advisethecompany.
(8marks)
(b) AspertheauditedbalancesheetofDowellLtd.asat31 March,2004,thedetailsof
st

sharecapital,reservesandsurplusareasunder:
Rs.inLakhs
Equitysharecapital 300.00
Reservesandsurplus:
Profitandlossaccount 62.75
Generalreserves 12.00
Sharepremium 25.00
Capitalsubsidy(Centralgrant) 10.00
 Revaluationreserve 30.00

139.75

Miscellaneous expenditure to the extent not written off as at 31 st March, 2004 is

Rs.1.25lakh.
Breakupofunsecuredloansasat31stMarch,2004isgivenbelow:
Rs.inLakhs
Depositsfrompublic 13.00
Depositsfromshareholders 3.62
Intercorporatedeposits 15.00
Deferredsalestaxliability 28.63
60.25
ComputethelimitsuptowhichDowellLtd.canacceptfurtherdepositsfromthepublic
andshareholders(Answertothenearestrupeesinthousands).
(8marks)

8. (a)RanaisadirectorofUrmiExportsLtd.UrmiExportsLtd.wishestoenterintoa
contractwithSrilakshmiCreationsPvt.Ltd.,acompanyregisteredinMauritiusin
which Mrs.Rana is a director. What compliances, if any, are required under the
CompaniesAct,1956?
(5marks)
(b) Whatarethemodesofreductionofsharecapital?Specifythecasesofdiminutionof
sharecapitalwhicharenotregardedasreductionofsharecapital.
(5marks)
(c) Arunbuys300sharesofacompanyfromBarunonthefaithofasharecertificate
issuedbythecompany.Arunsubmitstothecompanyatransferdeed,dulyexecuted,
along with Baruns share certificate for transferring the shares in his name. The
companydiscoversthatthecertificateinthenameofBarunhasbeenfraudulently
obtained and refuses to register the transfer. Is Arun entitled to get the shares
transferredinhisname?
(6marks)
o