the latest audited Balance Sheet of XYZ Ltd.:

(i) Gift of shares in another company.
(ii) Additional investment in the sahres of a company which has become its
subsidiary by virtue of control of composition of Board of Directors by
investing company.
(iii) Investment in the shares of a company wherein the investing company is
holding 60 per cent of the total equity shares. [May, 1994J
8. Explain the provisions of law with regard to the acquisition of one company by
another company by purchase of shares. [November, 1993J
9. State the provisions of the Companies Act, 1956 relating to inter-company loans. Also mention in brief the disclosure requirements with regard to such loans.
[November, 1993J
10. Calcutta Textiles Limited defaulted in the matter of repayment of matured deposits accepted from the public and the default continues. The subscribed capital and free reserves aggregated to rupees one crore as per its Balance Sheet as on 31st March, 1997. The Board of Directors of the compar.y propose to give a loan of Rs. 40 lakhs to its subsidiary company without seeking the approval of the Central Government. Examine with reference to the provisions of the Com
panies Act, 1956 whether the proposed loan is in order. [Nov., 1997J
11. DEP Limited having subscribed share capital of Rs. 5 crores and free reserves of Rs. 3 crores has not so far given any loan or guarantee to body corporates. Examine with reference to the provisions of the Companies Act, 1956 the legal requirements to be complied with by the company in respect of the following:
(i) Furnishing guarantee to ABC Housing Finance Company Ltd. for loans granted by it (ABC Housing Finance Company) to the employees of DEP Limited.
(ii) Granting loan of Rs. 10 lakhs to MN Limited in which 30% of the Equity
Shares is held by one of the Directors of DEP Limited. [May, 1998J
12. ACE Automobiles Limited is a company engaged in the manufacture of Cars. The company's investment in the shares of other bodies corporate and the loans made to other bodies corporate exceed 60 per cent of its paid-up share capital and free reserves and also 100 per cent of its free reserves. The company has obtained a term loan from the Industrial Credit and Investment Corporation of India Limited. The company proposes to increase its investment in the equity shares of ACE Forgings Limited from 60 per cent to 70 per cent of the equity share capital of ACE Forgings Limited by purchase of shares from the Forging Collaborator.
State the legal requiremems to be complied with by ACE Automobiles Limited under the Companies Act to give effect to the above proposal. Will your answer be different if the company has defaulted in repayment of matured
deposits accepted from the public. [November,1999J
13. Following is the latest audited Balance Sheet of XYZ Ltd.:
Capital and Liabilities Rs. Assets
Equity Share Capital 10,00,000 Goodwill
(10,000 shares ofRs.100 each) Land and Buildings
Less: Calls unpaid 10,000 Plant and Machinery
9,90,000 Equity shares in A Ltd.
Rs.
1,00,000 10,50,000 20,25,000
l,25~000