This Paper has 23 answerable questions with 0 answered.
| Roll No…………… | |
| Time allowed : 3 hours | Maximum marks : 100 |
| Total number of questions : 8 | Total number of printed pages : 3 |
Note: Answer SIX questions including Question No. 1 which is compulsory. |
| Marks |
| 1. | (a) | “On–going corporate restructuring is a must for survival due to globalisation, liberalisation and economic reforms.” Discuss. | 12 | (0) |
| | (b) | Briefly explain the different strategies of corporate restructuring. | 8 | (0) |
| 2. | (a) | You are the company secretary of XYZ Ltd., a listed company, which is making a takeover bid to acquire control of ABC Ltd., another listed company. XYZ Ltd. presently has no stake in ABC Ltd. Advise your Board of directors in respect of the following queries : | (i) | Govinda, your director, desires to be appointed on the Board of ABC Ltd. during the offer period. | | (ii) | Your company after acquiring control of ABC Ltd. desires to dispose of some assets of ABC Ltd., not in the ordinary course of business and its intention to dispose of such assets is not stated in the offer document. |
| 6 | (0) |
| | (b) | Discuss the law as laid down by the Supreme Court in Miheer H. Mafatlal vs. Mafatlal Industries Ltd. with regard to the role of the court in sanctioning scheme of arrangement under section 391 of the Companies Act, 1956. | 6 | (0) |
| | (c) | Explain in brief the term ‘leveraged buyout’ (LBo). | 4 | (0) |
| 3. | (a) | “Buy–back of shares is one of the methods of enhancing shareholders’ wealth.” Discuss this statement with reference to the provisions of sections 77A, 77AA and 77B of the Companies Act, 1956. | 8 | (0) |
| | (b) | Company–XYZ was incorporated on 1st July, 2002. Company–ABC is to merge with Company–XYZ with ‘appointed date’ of 1st April, 2002. Is it possible ? If not, why? Support your answer with case laws. | 4 | (0) |
| | (c) | How can post–merger efficiency be measured ? | 4 | (0) |
| 4. | (a) | DEF Ltd. was incorporated with a capital of Rs.70 crore, promoted by the well known group HIJ Ltd. Unfortunately DEF Ltd. was incurring heavy losses right from incorporation and its accumulated losses as on 31st March, 2003 stood at Rs.95 crore. The major finished products of DEF Ltd were the raw materials of HIJ Ltd. A summarized position of the financial condition of both these companies is given below :
| Liabilities | DEF Ltd. | HIJ Ltd. | Assets | DEF Ltd. | HIJ Ltd. | | Share capital | 70 | 34 | Total assets | 25 | 207 | | Reserves | — | 173 | Losses | 95 | — | | Other liabilities | 50 | — | | 120 | 207 | | 120 | 207 |
Assuming that the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 are not applicable, advise the management of HIJ Ltd., the most tax efficient and company law friendly method of reconstruction of the company which would be in the long term interests of both the companies HIJ Ltd. and DEF Ltd., the financial institutions, shareholders and employees involved. | 8 | (0) |
| | (b) | “No method of valuation of shares by itself is perfect. A combination of different methods will give a proper valuation of shares.” Discuss this statement with reference to the following methods of valuation : (i)
(ii)
(iii) | Net asset method;
Earnings method; and
Market price method. |
| 8 | (0) |
|
| 5. | Write notes on any four of the following: | 4each | |
| | (i) | Discounted cash flow method of valuation | | (0) |
| | (ii) | Shares with differential voting rights | | (0) |
| | (iii) | Reconstruction of a company under section 395 of the Companies Act, 1956 | | (0) |
| | (iv) | Inter se transfer of shares under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended till date | | (0) |
| | (v) | Buy–back of securities through book–building route | | (0) |
| | (vi) | Reverse merger. | | (0) |
| 6. | Draft the following : | | |
| | (i) | Notice to dissenting shareholders pursuant to section 395 of the Companies Act, 1956. | 6 | (0) |
| | (ii) | Declaration of solvency under section 77A(b) of the Companies Act, 1956. | 5 | (0) |
| | (iii) | Report by chairman for result of the meeting of members/creditors convened under the directions of the court under sections 391 to 394 of the Companies Act, 1956. | 5 | (0) |
| 7. | Elucidate with the help of decided cases that sections 391 to 394 of the Companies Act, 1956 is a complete code in itself. | 16 | (0) |
| 8. | (a) | What are the three C’s which are to be borne in mind while selecting ‘prospective partners’ for entering into an ‘alliance’ with them ? | 8 | (0) |
| | (b) | Distinguish between ‘hostile takeover’ and ‘bailout takeover’. | 4 | (0) |
| | (c) | What do you mean by the term ’open market valuation’ ? | 4 | (0) |
