226

Roll No

Time allowed : 3 hours Maximum marks : 100

Total number of questions : 8 Total number of printed pages : 4

NOTE : Answer SIX questions including Question No.1 which is compulsory.

1. Redraft the following notice for an annual general meeting keeping in view
the requirements of the law. Also draft the necessary annexure, if required :

NOTICE is hereby given that the Twenty Fourth Annual General Meeting of
the Directors of XYZ Ltd. will be held at the Administrative Office of the
Company at 4th floor, Bagirathi Complex, Bright Road, New Delhi, on
Sunday, the 29th June, 2003 at 10.30 PM to transact the following business :

ORDINARY BUSINESS
(i) To receive and approve the audited statement of accounts for the year
ended 31st March, 2003 and to consider the reports of the Directors
and the Auditors thereon.
(ii) To pay a dividend.
(iii) (a) To elect Directors in place of Kader and Mrs. Geetha, who retire
by rotation and being eligible, offer themselves for re-election.
(b) To appoint Muralidharan as Director of the company who has been
an additional director of the company, appointed during
December, 2002.
SPECIAL BUSINESS
(iv) To appoint Auditors and to fix their remuneration and in this
connection, to consider, and, if thought fit, to pass with or without
modification, the following resolution as a Special Resolution:
RESOLVED that, pursuant to the provisions of section 224 of the Companies
Act, 1956, M/s ABC and Co. Ltd., the Chartered Accountants, be and they are
hereby appointed the Auditors of the company to hold office for the financial
year 2003-04 and the Board of Directors be and is hereby authorised to fix
their remuneration for the said period.
For XYZ Ltd.

Date: 20th June, 2003 Company Secretary

Registered Office :
Mathura Bhavan, II Cross
Patel Nagar, Agra
Note : A member entitled to attend and vote is entitled to appoint a proxy to
attend and vote instead of himself and a proxy need not be a member.
(20 marks)

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2. Bright and Prosperous (Pvt.) Ltd. is a family-owned company incorporated with a

capital of Rs.1,75,000. The company has a number of indigenous and foreign
agencies for manufactured engineering goods and has had a steady growth in
turnover and profits over the last ten years. The directors, visualising further
growth in the companys business, have decided to make the company public;
however, for the time being, the company will not be listed on any stock
exchange.
Your services, as company secretary, have been requisitioned to advise the Board
on the various steps to be taken along with draft resolutions, to achieve the
objective. Make a detailed presentation to the Board.
(16 marks)

3. As the Company secretary of Sharp Practices Ltd., advise the Board on the
following matters :

(i) For extending the tenure of the managing director by a period of 5 years
on a revised remuneration package;
(ii) One of the directors has not attended any of the last four Board meetings;
(iii) For holding of a Board meeting at the registered office of the foreign
collaborators of the company at Frankfurt;
(iv) For granting a housing loan to the whole-time director in-charge of
finance.
(4 marks each)

4. Write short notes on any four of the following :

(i) Buy-back of shares

(ii) Minimum/maximum number of directors in a company
(iii) Need for secretarial standards
(iv) Free transferability of shares
(v) Satisfaction of charge.
(4 marks each)

5. The Board of directors of Sunbeam Industries Ltd., of which you are the company
secretary, seek your advice on the following matters :
(i) To commence manufacturing refrigerators and washing machines, which
are not germane to the existing activities.
(ii) To shift the corporate office of the company to New Delhi, the registered
office will continue to function in Mumbai.
(iii) To appoint Shyam as a director in place of Atmaram, a director who
passed away recently.
(iv) To open a new bank account of the company with Everready Bank Ltd.,
Jolly Place, New Delhi, to facilitate its New Delhi operations.

Advise the Board along with appropriate resolutions.

(4 marks each)

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6. (a) What do you mean by non-statutory books/registers to be maintained by a
company ? Why are such books/registers maintained by the companies ?
(4 marks)
(b) Classify the following into statutory and non-statutory books/registers and
explain briefly the necessity and the contents of each of them :
(i) Dividend register
(ii) Register of charges
(iii) Register of share transfers and transmission
(iv) Register of contracts with companies and firms in which directors
are interested.
(3 marks each)
7. (a) A company opened a dual purpose account, so that dividend was paid to
the shareholders from that account and the unpaid amount of dividend
remained with the bank, which earns nominal interest to the company.
Bank also agreed to honour all dividend warrants deposited at the specified
branches spread across the country. Accordingly, the money was
transferred to the dual purpose account and dividend warrants were posted
within three days from the date of the declaration of the dividends.
However, later on, company realised that it would be impossible for it to
know whether or not the dividend warrants have been encashed by the
shareholders unless they were returned back to the bank or the company.
Therefore, company decided to continue with the dual purpose account till
the warrants go stale and only then transfer the unpaid dividend, to a
special account with a scheduled bank, as prescribed for payment of
dividend.
Examine whether there is any contravention to the provisions of law
relating to the payment of dividend.
(8 marks)

(b) A few directors of a power company registered in India, who are foreign
nationals, collected funds from non-resident individuals and companies
with a promise to issue shares of that power company. They made false
and misleading statements and suppressed facts. They diverted the funds
so raised to certain investment companies owned by them abroad. The
funds so diverted were utilised by the investment companies for securing
allotment of shares in the power company. Can the aforesaid directors be
prosecuted for trial in the Indian courts for the commission of offences
under sections 60, 63, 68 and 68A of the Companies Act, 1956 ? Support
your answer with case law, if any.
(8 marks)

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8. (a) 5,000 equity shares in a company were standing registered in the joint-
names of Smt. Sumati and Sri Krishan. A dispute arose between them.
Sri Krishan requested the company to split the holdings half and half and
show his name as the first joint-holder in one half of the holdings so split.
Discuss whether the company can entertain Sri Krishans request ?
(8 marks)

(b) X was a shareholder in company M Ltd. X died bequeathing a will under

which Z, son of X, was empowered to receive the amount of the shares.
The articles of association of M Ltd. vested with the Board of directors
absolute discretion in regard to registration of transfer of shares. In the
instant case, the Board refused to register the transmission of shares on the
grounds that the will entitled Z to receive amount of the shares only and
that he was an undesirable person to the company. Is the refusal to
register the transmission by the Board of directors of company correct ?
Explain.
(8 marks)
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2/2003/CSP