CS Final :: Advanced company law & practice : June 2006

Draft the following :

A resolution to issue 80,00,000 equity shares of Rs.10 each for cash at par to the members on rights basis, and further, authorising the Board of directors to allot unsubscribed equity share capital, if any, to such persons as the Board of directors may decide. No explanatory statement required.

A covering letter forwarding your application under section 621A for compounding of offences under sections 159 and 220 separately giving a list of annexures accompanying the application.

A resolution and explanatory statement authorising the Board of directors of a listed company for preferential allotment of 5 lakh equity shares of Rs.10 each at a premium.

Not only section 391 is a complete code, but it can also be called a single window clearance system in the context of court’s powers on scheme of arrangement/amalgamation. Discuss.

The issue of valuation of shares in the context of amalgamation of companies is often agitated by stakeholders. The courts have laid down broad parameters for valuation of shares for guidance of companies/valuers. Discuss these parameters with reference to decided cases.

What are the various steps involved in the reduction of share capital — both pre and post reduction of share capital ?

Richie Ltd. issued warrants to Yashwant, which were convertible into equity shares after 6 months. As per the conditions of issue of warrants, full amount was to be received. However, Yashwant paid only 90% of the amount and the balance 10% was paid after 20 days of allotment. Company went ahead with the conversion. Later on, stock exchange denied listing of these shares objecting the conversion of warrants into fully paid-up equity shares. Company wants to cancel these shares and Yashwant has agreed for such cancellation. Will this amount to reduction of share capital ? What steps would you take as a Company Secretary of Richie Ltd. ?

331

The Companies Act, 1956 requires certain resolutions and agreements of the companies to be registered with the Registrar of Companies.

Prepare a detailed note on requirements of audit of branches of companies under the companies Act, 1956.

CureWell Ltd. is engaged in manufacturing pharmaceutical preparation and has a patent sealed in its own name. It is apprehended that if quantitative details are disclosed in the annual accounts of the company, the same would be detrimental to the interests of the company. Advise.

The Board of directors of Safex Ltd. is contemplating increase in remuneration of Ramesh, Managing Director beyond what is permissible by Schedule XIII of the Companies Act, 1956. Advise.

Detail the circumstances in which the Company Law Board can impose restrictions on transfer of shares and debentures of a company, which is being investigated.

How are contracts entered into by a company prior to appointment of a receiver affected by such appointment ?

A petition (in English) is filed by the required number of members alleging oppression and mismanagement against a company and directors, accompanied by the consent letters of some members in Hindi. Discuss whether the petition can be challenged by the company as not maintainable ?

Zap Ltd. files a winding-up petition against Wap Ltd. On being informed about a settlement between these companies, petition is allowed to be withdrawn. Subsequently, Wap Ltd. although pays part of the amount, eventually fails to honour the dues in full as envisaged in the settlement and hence Zap Ltd. approaches the court to restore the petition for winding-up. Now, Wap Ltd. requests the court to direct refund of the amount paid as part-payment of the settlement. Will it succeed ?

331

Discuss the various aspects of registration of an existing company under Part IX of the Companies Act, 1956.

Discuss the various provisions of clause 49 of listing agreement in respect of audit committees.

Hum Log Ltd. had a foreign collaboration agreement with Peter Inc. The collaboration agreement contained various provisions regarding quorum of Board meetings, declaration of dividend, length of notice period of annual general meeting, etc. However, these provisions were not incorporated in the articles of association. During the course of business, one of the Board meetings was conducted without the presence of a nominee of Peter Inc. Such presence was mandatory as per the agreement of collaboration, but articles of association continued to have the standard provision for the quorum of Board meetings, i.e., 1/3rd or 2 members whichever is more. Can the validity of the Board meeting be challenged by Peter Inc. ?

Set out the crux of the guidelines on corporate governance developed by the Commonwealth Association for Corporate Governance.