CA FINAL LAW

Total No. of Pages – 4

Maximum Marks – 50

Question 1
A) The Board of Director of M/s. Diya Steels and Aluminium Limited, a listed company having a paid up
equity share capital of 15 crores and preference share capital of 1 crore and 1100 small shareholders
holding equity shares, seeks your advice on the following:
i) Is it mandatory for the company to appoint a Director to represent Small Shareholders?
ii) If the company decides to appoint such a Director, the procedure to be followed by the company
for such appointment and the tenure for which such appointment can be made.
iii) Whether such a Director be considered as an Independent Director?
iv) When does a person appointed as a small shareholders Director vacate his office?
Advise suitably in the light of the provisions of the Companies Act, 2013 and the rules framed
thereunder. (6 marks)
B) Mr. T. Raghava has secured admission in a reputed and recognized university in Germany, for the study of
higher and technical education, outside India. After arrival in Germany, he has gone ill and wants medical
treatment facility in a reputed German hospital. He desires to apply to the Government of India for availing
the additional remittance beyond the limit approved for foreign currency exchange facility. He has already
enjoyed the permitted facility of foreign exchange for studies abroad, for the said financial year. Decide
the following as to the facts given in the question as per the provisions of the Foreign Exchange
Management Act, 1999:
i) As an individual, to what extent Mr. T. Raghava may avail foreign exchange facilities for higher and
technical study in Germany.
ii) Can Mr. T. Raghava avail the facility of additional remittance in foreign exchange, beyond the limit, for
the medical treatment. (4 marks)

Question 2
A) Mr. Mania is the Managing Director of S Limited (and nowhere else), which is a subsidiary of H Limited.
Seeing the success mot S Limited, the directors of H Limited (which is listed company) decided and
approached Mr. Mania to act as the managing Director of H Limited. Mr. Mania agreed with directors
of H Limited subject to a condition that he will continue to act as the Managing Direct of S Limited also.
In this direction, the directors of H Limited propose to appoint him by means of resolution (containing
the terms and conditions of appointment excluding remuneration) by circulation. Referring of and
analyzing the relevant provisions of the Companies Act, 2013, decide whether the decision of
appointing and the proposed mode or appointment of Mr. Mania as the Managing Director of H Limited
is valid.
Will your answer differ in case S Limited is not a subsidiary of H Limited? (4 marks)

B) Kojol Research Development Ltd. was registered to innovate unique business idea emerging from
research and development in a new area. It is a future project and the Company has no significant
accounting transactions and business activities. Therefore the company made an application to ROC for
 obtaining the status of a Dormant Company. The application is under process. In the meantime, the
Company without extinguishing all its liabilities filed an application to ROC for removing the name of
the Company, after passing a special resolution giving effect to this.
In the light of the provisions of the Companies Act, 2013, analyse the following:
i) Whether the application is tenable under the Act?
ii) What are the restrictions imposed under the Act for making application by a Company to remove
the name of the Company from the register of ROC?
iii) What are the penal consequences III case of violation of restrictions? (6 marks)

Question 3
A) M/s Dreamworks Limited (an unlisted company) without any public deposits as per the audited financial
statements of the company as at March, 31st 2018 gives you the following information:

Paid up Share Capital ₹ 20 crores

Gross Turnover ₹ 500 crores
Bank Borrowings ₹ 40 crores (from a National Bank)
Other Borrowings ₹40 crores (from a Public Financial Institution)
Mr. Gupta, a Chartered Accountant employed in the finance and audit department of the company
wants to form a Vigil Mechanism for directors and employees of the company.
a) Advise whether it is mandatory for M/s Dreamworks Limited to formulate a Vigil Mechanism under
the provisions of the Companies Act, 2013 and rules framed there under.
b) Are there any penalties that could be imposed on the company for not formulating the Vigil
Mechanism? (4 marks)

B) Cotton On Yarn Ltd., and Country Cotton Blossom Ltd., are two listed companies engaged in the
Business of Textiles. The companies are not making profits and as such their share’s market price have
gone down. A substantial portion of their share capital is held by Central Government as well as some
Public Financial Corporations. In order to increase the share value, the Central Government wants to
amalgamate the aforesaid two companies into a single company. Examine the powers of Central
Government to amalgamate the two companies in public interest as per the provisions of the Companies
Act, 2013. (6 marks)

Question 4
A) Mr. Veer a newly entered investor in the field of securities business seeks your advice on the investments
to be made in securities of large Companies for long term purposes. With this object in view, he wants to
know the meaning of the following terms commonly used in any stock exchange.
i) Derivative
ii) Option in securities
iii) Spot delivery contract. Advise suitably. (4 marks)

B) Joel Ltd. was incorporated in London with a paid up capital of 10 million pounds. Mr. Y an Indian citizen
holds 25% of the paid up capital. X Ltd. a company registered in India holds 30% of the paid up capital
of Joel Ltd. Joel Ltd. has recently established a share transfer office at New Delhi.
i) The company seeks your advice as to what formalities it should observe as a foreign company under
 Companies Act, 2013.
ii) State briefly the requirements relating to filing of accounts with the Registrar of Companies by the
foreign company in respect of its global business as well as Indian business. (6 marks)

Question 5
A) The business of Weak Fabrication Limited is conducted fraudulently and the management activities are
not in the interests of the Company. The paid up capital of the company is One crore rupees. A group
of shareholders numbering 110 members representing 1/9 of total voting power decided to approach
Tribunal (NCL T) to carryout investigation into the Company's affairs under the provisions of the
Companies Act, 2013. They seek your advice in the following matters, stating the relevant provisions of
the Companies Act, 2013.
i) Whether the group can make valid application?
ii) Other than member, can any other person make application?
iii) Are the applicants required to furnish security for payment of cost and expenses of Investigation?
(6 Marks)

B) M/s, IJK Limited was wound up with effect from 15th March 2018 by an order of the Court. Mr. A, who ceased
to be a member of the company from 1st June 2017, has received a notice from the liquidator that he should
deposit a sum of ₹ 5,000 as his contribution towards the liability on the shares previously held by him. In
this context explain whether Mr. A can be called as a contributory, whether he can be made liable and
whether there is any limitation on his liability. (4 Marks)

Question 6

A) Examine the merits of the following petitions made under Sections 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
petition before the Tribunal alleging various acts of illegal, invalid and irregular transactions entered into
in the name of the Company. (6 Marks)

B) After giving a reasonable opportunity of being heard, Central Government cancelled the certification of
registration of Toastea Ltd, a company registered under FCRA on the ground of public interest 2.5 years
have passed since such cancellation. Company has submitted its written declaration not to involve in such
activity again and request to restore the registration. Advise Toastea Ltd. on its eligibility for re-
registration or grant of prior permission. Also state the circumstance under which Government can
cancel the certificate of registration granted to a person under the Foreign Contribution (Regulation)
Act, 2010. (4 Marks)