Investments, Loans and Borrowings

Investments, Loans and Borrowings

C.A. (Final) Past Examinations Questions (SCANNER)

1. State with reference to the provisions of the Companies Act., 1956, whether you will take into account the following for the purpose of working out the limits up to which investments can be made by a public company:
(i) Amount invested in debentures of a company in the same group.
(ii) Amount invested in the shares of a subsidiary company for the purpose of
additional investment in the same subsidiary company as well as invest
ment in other companies. [May, 19961
2. Answer the following:
(a) XYZ Machineries Limited having a paid-up share capital of Rs. 80 lakhs proposes to enter into contract with the following parties for the supply of certain components for a period of 5 years with effect from 1st January, 1995:
(i) ABC Forgings Private Limited, where 'X', a Director of XYZ
Machineries Limited, is interested as a Director and Member.
(ii) DEF Casting Limited, where 'Y', a Director of XYZ Machineries
Limited, is interested as a Member holding 25 per cent of the paid-up
share capital.
State briefly the legal requirements to be complied with under the Companies Act to:give effect to the above proposals. Will the agreements continue to be valid after the paid-up share capital of XYZ Machineries Limited is increas:ed to Rs. 4 crores in December 1995 by further issue of shares?
(b) The subscribed and paid-up share capital of PQR Textiles Limited is Rs. 100 lakhs. It has free reserves amounting to Rs. 50 lakhs. The existing investments amounted to Rs. 30 lakhs in the shares of other companies which are not in the same group. The Board of Directors made additional investments as noted below:
(i) Invested on 1st January, 1995 ~ one lakh rights equity shares of Rs. 10 each of MI s MN Limited at a premium of Rs. 10 per share. As some of the members did not subscribe for their rights shares,........
company's holdings in Mis MN Limited after this investmen