V’Smart Academy

V’SMART EXAMPREP
CA Final - Test 4, Group l
Corporate and Allied Laws
DATE : 05 Oct, 2017 TIME : 3:15 Hours MARKS : 100
Total No. of questions : 7 Total no. of pages: 4

Ques on 1:
(A) The Board of Directors of Star Ltd. consists of Mr. X, Mr. Y and Mr. Z. Mr. X and Mr. Y
are Directors of the Company and Mr. Z is Managing Director in the Board. The company
has also employed Mr. F as the Chief Financial Officer. The Financial Statement of the
company were signed by Mr. X and Mr. Y.
Examine the following concerns -
(i) whether the authen ca on of financial statements of the company was in
conformity with the provisions of the Companies Act, 2013?
(ii) If Financial Statement is not in conformity, how the above issue can be
repaired in compliance with the Companies Act,2013?
(B) State the condi ons imposed on issuers to make a public and rights issues of
specified securi es?
(C) State the circumstances when persons are not en tled to make an applica on to ini ate
corporate insolvency resolu on process.
Suppose a corporate debtor has commi ed a default and is undergoing a corporate
insolvency resolu on process. A corporate applicant Mr. X thereof files an applica on for
ini a ng corporate insolvency resolu on process with an Adjudica ng Authority. State
whether he (Mr. X) is en tled to make an applica on to ini ate corporate insolvency
resolu on process?
(D) According to sec on 22 of the Insolvency and Bankruptcy code state in brief the
appointment criteria and Func ons of resolu on professional. (4 x 5 = 20 Marks)

Ques on 2:
(A) XYZ Ltd. is a foreign collaborator in ABC Ltd. incorporated in India under the Companies
Act, 2013. The foreign collaborator holds 49% of the shareholding. The Board mee ngs
of ABC Ltd are usually held in India and some mes mee ngs of the Board are called at a
very short no ce for which there is a provision in the Ar cles of Associa on that during
such situa ons no ces of the mee ngs of the Board can be sent by e-mail. State in this
connec on whether such a provision in the Ar cles of Associa on of a foreign
collaborated company is valid within the purview of the provisions of the Companies Act,
2013.
(B) Mr. Boss, a Director of Empire Ltd., was appointed on 1st April, 2012, one of the terms of
appointment was that in the absence of adequacy of profits or if the company had no
profits in a par cular year, he will be paid remunera on in accordance with Schedule V.
For the financial year ended 31st March, 2016, the company suffered heavy losses. The

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 company was not in a posi on to pay any remunera on but he was paid ` 50 lacs for the
year, as paid to other directors. The effec ve capital of the company is ` 150 crores.
Referring to the provisions of Companies Act, 2013, as contained in Schedule V, examine
the validity of the above payment of remunera on to Mr. X.
(C) Securi es and Exchange Board of India (SEBI) has undertaken inspec on of books of
accounts and records of LR Ltd., a listed public company. Specify the measures which may
be taken by SEBI under the Securi es and Exchange Board of India Act, 1992 to protect the
interest of investors and securi es market, on comple on of such inquiry.

(D) Explain the powers, which can be exercised by the Securi es and Exchange Board of India
under the Securi es Contracts (Regula on) Act, 1956, while approving the schemes for
corpora sa on and demutualiza on submi ed by recognized stock exchanges, so that
there is segrega on of ownership and management from the trading rights of members of
such stock exchanges. (4 Marks Each)

Ques on 3:
(A) A mee ng of members of DEF Limited was convened under the orders of the Court for the
purpose of considering a scheme of compromise and arrangement. The mee ng was
a ended by 300 members holding 9,00,000 shares. 120 members holding 7,00,000 shares
in the aggregate voted for the scheme. 140 members holding 2,00,000 shares in aggregate
voted against the scheme. 40 members holding 1,00,000 shares abstained from vo ng.
Examine with reference to the relevant provisions of the Companies Act, 2013 whether the
scheme was approved by the requisite majority? (6 Marks)

(B) Winding up proceedings has been commenced by the tribunal against DEF Limited, a
government company (Central Government is a member). Even a er comple on of one
year from the date of commencement of winding up proceedings, it is not possible
to conclude the same. The liquidator is of the opinion that the statement shall be filled with
tribunal and registrar only.
(i) Validate the opinion made by the liquidator and penalty that can be imposed
on the liquidator for contraven on of the provision as per Companies Act,
2013.
(ii) What will be your answer if the DEF Limited is a non-government company? (6 Marks)

(C) Mr. Zupi was appointed as a Member of the Compe on Commission of India by Central
Government. He has a professional experience in interna onal business for a period of
12 years, which is not a proper qualifica on for appointment of a person as member.
Poin ng out this defect in the Cons tu on of Commission, Mr. Yakub, against whom the
commission gave a decision, wants to invalidate the proceedings of the commission.
Examine with reference to the provisions of the Compe on Act, 2002 whether Mr.
Yakub will succeed. (4 Marks)

Ques on 4:
(A) A producer company proposes to amend the objects specified in its Memorandum of
Associa on and certain provisions in its Ar cles of Associa on. The Company also
proposes to shi its registered office from the State of Kerala to Tamil Nadu. Explain the
requirements under the provisions of the Companies Act, 1956 to give effect to these
proposals.

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 (B) Mr. Azad, an independent director of X company, was appointed in the AGM for a period
of three years. A er the expiry of 3 years he was re-appointed for a period of 5 years.
Considering that though Mr. Azad has completed two tenures/terms but hasn’t
completed ten years in total, therefore he may be appointed in the upcoming AGM for
another 2 years to complete his total term of 10 years. Conferring in the light of the
Companies Act, 2013, state the validity of reappointment of Mr. Azad for further term in
the company.

(C) Shareholders of Akash Ltd. not sa sfied with the performance of the company inferred
that some ac vi es conducted by the company are against the interest of the members
of the company. Group of shareholders of the company filed an applica on to the Central
Government to appoint an inspector to carry out inves ga on to look into the ma er.
With reference to the provisions of the Companies Act, 2013, men on whether the
shareholders’ applica on is tenable? Elaborate.

(D) Mr. Rajat is a so ware engineer of Amar Ltd. The company sent him to China to develop
a so ware programme there on deputa on for 2 years. He earned a sum of
US $ 3,000 as a honorarium there. On his return to India he wants to hold this foreign
currency with him. Whether Mr. Rajat will be allowed to keep the foreign currency with
him. (4 Marks each)

Ques on 5:
(A)
(i) X Inc is a company registered in UK and carrying on Trading Ac vity, with Principal
Place of Business in Chennai. Since the company did not obtain registra on or make
arrangement to file Return, the State VAT Officer having jurisdic on, intends to
serve show cause no ce on the Foreign Company. As Standing Counsel for the
department, advise the VAT Officer on valid service of no ce.
(ii) ABC Limited, a foreign company failed to deliver some desired documents to the
Registrar of Companies as required under Sec on 380 of the Companies Act, 2013.
State the provisions of penalty prescribed under the said Act, which can be levied on
ABC Limited for its failure. (4 Marks each)

(B) State the obliga ons to be fulfilled by Companies Registering under sec on 374 of
Companies Act, 2013. (4 Marks)

(C) State which of the following debts may be considered as financial assets as per the
SARFAESI Act, 2002:
(i) a mortgage, charge, hypotheca on or pledge of movable property;
(ii) any beneficial right, tle or interest in any tangible asset given on hire or
financial lease or condi onal sale or under any other contract which
secures the obliga on to pay any unpaid por on of the purchase price of
such asset or an obliga on incurred or credit otherwise provided to
enable the borrower to acquire such tangible asset.
(iii) any right, tle or interest on any intangible asset or licence or assignment
of such intangible asset, which secures the obliga on to pay any unpaid
por on of the purchase price of such intangible asset or an obliga on
incurred or credit otherwise extended to enable the borrower to acquire
such intangible asset or obtain licence of the intangible asset.

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 (iv) any security interest created in agricultural land. (4 Marks)

Ques on 6:
(A) Name the authority who may establish the Investor Educa on and Protec on Fund to
safe guard the interest of the shareholders with respect to the refund of unclaimed and
unpaid dividend. Specify the list of amounts that can be entrusted to the Fund. (8 Marks)

(B) It is apprehended by the Directors of a Public Company that they are likely to be
prosecuted for an offence under the Companies Act, 2013 which is not compoundable.
Explain the provisions of the Companies Act, 2013 under which the Directors can seek
relief from the liability for offence. What will be the posi on in case prosecu on has
already been launched?

(C) Explain the Power of Registrar to Remove Name of Company from Register of
Companies under Section 248 of companies Act, 2013. Also explain the provisions of filing an
application for removal of name.

(D) How a trial under the Preven on of Money Laundering Act, 2002 is conducted in
Special Courts? (4 marks Each)

Ques on 7: A empt any four of the following.

(A) Examine the merits of the following pe ons made under Sec ons 241 of the Companies
Act, 2013 in the light of judicial pronouncements made in this regard:
A group of shareholders holding 12% of the issued share capital of Unique Products Limited
have filed a pe on before the Tribunal alleging various acts of illegal, invalid and irregular
transac ons entered into in the name of the Company.

(B) What is the object of Cons tu ng Panel for Media on and Concilia on under the Companies
Act, 2013? Who can file applica on for media on and concilia on?

(C) M/s Sun Control proposes to acquire 1,00,000 shares of M/s Rain Control, from open
market for a total sum not exceeding ` 1, 500 lakhs. Dra a Board resolu on for approving
investment by Board of Directors of M/s Sun control.

(D) Explain the usefulness of 'Heading and Title of a chapter in an Act and marginal notes of a
Sec on' as internal aids in interpre ng the provisions of a Statute.

(E) Define as per Insolvency and Bankruptcy Code 2016:

(i) Security Interest
(ii) Corporate Applicant (4 Marks Each)

JALL THE BESTJ

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