Company Secretarial Practice

SUGGESTED ANSWERS
PROFESSIONAL PROGRAMME [Module I (Paper l)l
COMPANY SECRETARIAL PRAGTIGE

(PP-CSP/2010)
t0$t
THE INSTITUTE OF Company Secretaries of lndia

Iil PUFSUIT OF PNOFESSIOTAL EXCELLEilCE
tel 0l I -4534 1000, 4l 50 4444 fax +91-l 1 -2462 6727
statutory body under an Act of Parliament lCSl House, 22, lnstitutional Area, Lodi Road, New Delhi I I 0 003
email info@icsi.edu websitewww.icsi.edu
THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

EXECUTIVE PROGRAMME
IMoDULE il (PAPER 1)l
COMPANY SECRETARIAL PRACTICE
tll$t
SUGGESTED ANSWERS
PP-CSP12010
CONTENTS
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These Test Papers are the property
of the Gouncil
of the lnstitute is
of
The lnstitute of Company Secretaries of
lndia.
Permission
essential for reproduction of any portion of the Papers.
(i)
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These answers have been written by competent persons and the lnstitute hopes that the SUGGESTED ANSWERS will assist the students in preparing for the lnstitute's examinations. lt is, however, to be noted that the answers are to be treated as model answers and not as exhaustive and the lnstitute is not in any way responsible for the correctness or otherwise of the answers compiled and published herein. The Suggested Answers contain the information based on the Laws/Rules applicable at the time of preparation. However, students are expected to be well versed with the amendments in the Laws/Rules made upto six months prior to the date of examination.
PROFESSIONAL PROGRAMME
COMPANY SECRETARIAL PRACTICE

TEST PAPER 1'2010
(oPTtoNAL)
(Based on Study Lessons
Time allowed:
I to 10)
Maximum marks: 100
3 hours
NOTE: Attempt ALL questions.
Question No.1
Comment on the following:
(a)
(b) (c) (d)
DIN is,an unique ldentification Number, Promoters are the persons, who conceive the idea or visualize a project and then take sfeps fo execute the idea into a reality. A producer compan:y may alter its object clause specified in its memorandum of associafion by passing a special resolution. When a company rssues a share at a price lower than its nominat or par value, the shares are said to have been rssued at a discount.
(5 marks each)
fuisverto Question b
No. 1(a)
Allexistirig and any individual intending to be appointed as a director are required obtain the Director ldentification Number (DlN). DIN is also mandatory for directors of lndian Companies who are not citizens of lndia. However, DIN is not mandatory for
directors of foreign company having branch offices in lndia. Only a single DIN is required for an lndividual irrespective of the number of directorships held by him. DIN is a unique identificatibn number and once obtained is valid for life time of a director. A single DIN is required to be obtained irrespective of the number of
directorships. For obtaining DlN, directors are required to submit an application in e-form DIN-1 cnline through MCA portal. A provisional DIN is generated automatically. As per the Companies (Director ldentification) Rules, 2006, directors are required to apply to the
Sentral Government for a regular DIN within 60 days of the on{ine generation of rrovisional DIN (i.e. an application with necessary enclosures as identification proof re required to be submitted physically). After the deadline for obtaining a regular DIN s reached, the provisional DIN becomes invalidated. lf there are any changes in the larticulars of directors, these are required to be intimated to MCA within 30 days of ;hanges in the prescribed form (DlN4).
\nswerto Question No. 1(b) rke steps to execute the idea into a reality. They convey their idea to friends, glatives or business associates, make arrangements for collecting equity and loan apital for the company, prepare a team of persons who would act as its directors
nd take all other steps for compliance with the requirements of the Companies Act, 956 in respect of registration of the company. Prornoters are the persons, who conceive the idea or visualize a project and then
)-::
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a
The Companies Act does not define the expression "promoter". Whether
person is a 'promoter' or not, depends on the facts and circumstances of each case. As per section 62(6) the expression "promoter" means a promoter who was a parly to the preparation of the prospectus or of the portion thereof containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of company.
Answer to Question No. {(c)
A producer company may alter its objects specified in its Memorandum of Association by passing a special resolution. Such alteration must not be inconsistent with Section 5B1B of the Companies Act, 1956. This authority is available to the producer company notwithstanding the provisions contained in Section 17 of the Act.
A copy of the amended memorandum, together with a copy of the special resolution duly certified by two directors, shall be filed with the Registrar within 30 days from the date of adoption of special resolution.
Answer to Question No. 1(d)
When a company issues a share at a price lower than its nominbl or par value, the shares are said to have been issued at a discount. According to sub-section (1) of sect'rbn 79, if any company proposes to issue any shares at a discount, it can do so only if the conditions stipuiated in this section are fulfilled. The said conditions are as
follows:
1.
The shares to be issued are of a class which has already been issued by the company. Therefore, the first issue of shares of a company cannot be at a
discount.
2. 3. 4.
'
The issue is authorized by an ordinary resolution passed by the company at a general meeting. The Company Law Board has sanctioned the issue. The ordinary resolution specifies the maximum rate of a discount at which the shares are to be issued. [Company Law Board shall not sanction a discount of more than ten per cent unless it is of the opinion that a higher percentage of a discount is justified in the special circumstances of the casel.
5. The issue is made
after one year from the date on which the company
6.
(a) (b)
became entitled to commence business. [ln the case of a private company, the date of incorporation of the company will be taken as the date of commencement of business]. The shares are issued within two months of the sanction by Gompany Law Board or within such extended time as it may allow.
What
Question No.2
is
the procedure
to register a foreign company in tndia?
(8 marks)
(8 marks)
What is the procedure for changing obiects of a
company?
Ansrnier to Question No. 2(a) PROGEDURE TO REGISTER A FOREIGN COMPANY IN INDIA
(1) Foreign companies which, establish a place of business within lndia are
required to file e-form 44 along with the following documents as attachments, to the
Registrar of Companies within thirty days of the establishment of the place of business,. for registration- Certified True copy of charter, statutes or memorandum and articles of association or other instrument constituting or defining the constitution of the ' company is to be attached. lf the same is not in English language then it should be translated in English language; - Particulars of the registered office of the Company; - Details'of individuals' directors are to be attached, Details should contain name, surname, former name-if any, residential address, occupation and other directorship, if any; - Approval letter from Reserve Bank of lndia for the setting up of business in lndia is to be attached; - Name and address of the persons resident in lndia who are authorised by way of Board Resolution or Power of Attorney to accept services of any notices on the Company; - Full address of the principal place of business in lndia; - Director's details-in case of body corporate, details containing name and cornplete address of body corporate; - Secretary details-if any. The form will be digitally signed by the authorized representative of the foreign
company.
(2) The details of directors, Secretary and body corporate should contain the following particulars, that is to say : (a) with respect to each director(i) in the case of an individual, his present name and surname in full, any
former name or names and surname or surnames in full, his usual residential address, his nationality, and if that nationality is not the
nationality of origin, his nationality of origin, and his business occupation, if any, or if he has no business occupation but holds any other directorship or directorships, particulars of that directorship or some of those directorships; and (ii) in the case of a body corporate, its corporate name and registered or principal office; and the full name, address, nationality and nationality of origin, if different from that nationality of each of its directors; with respect to the secretary, or where there are joint secretiaries with respect to each of them(i) in the case of an individual, his present name and surname, any former name or names and surname or surnames, and his usual residentia address; and (ii) in the case of a body corporate, its corporate name and registered or principal office:
(b)
Provided that, where all the partners in
a firm are joint secretaries of
thr
company, the name and principal office of the firm may be stated instead of thr ^arfia'rarc mantioned in clause (b) of this Sub-sectiOn.
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Answer to Question No. 2(b)

Procedure for changing objects of a company
ln the light of the provisions of sections 17, 18 and 19 of the companies Act, 1956,'a company, desirous of altering the objects clause in its memorandum of
association, is required to adopt the following procedure:
1.
lssue notice for a Board meeting in writing to every director of the company for the time being in lndia and at his.usual address in lndia to every other director as per Section 286 of the Act. The notice must contain time, date and venue for the meeting and detailed agenda of the business to be transacted
Board meeting at the appointed time, date and venue
,2.lT';il"
(i)
(ii)
to-
consider and to pass a resolution approving the proposed amendments to the. objects clause of the memorandum of association of the company. consider and to pass another resolution fixing time, date and venue for holding general meeting of the company for passing a special resolution
under Section 17 of the Act for change
memorandum of association of the company. (iii) approve notice for the general meeting and the explanatory statement to be annexed to the notice under Section 173 (2) of the Act for the general meeting and to authorise the company secretary or some other competent officer to issue the notice on behalf of the Board. 3.' lssue notice of the general meeting to all the members of the company, its directors and the auditors. 4. Send three copies of the notice to each stock exchange where the securities of the company are listed [Refer clause 31(c) of the Listing Agreement]. A general notice of the general meeting may also be published in newspapers. 5. Hold the general meeting and pass the proposed special resolution.
of objects clause of
the
6. send to each stock
exchange,
7.
memorandum of association (one of them must be certified) as soon as they are adopted by the company in general meeting in case of a listed company (Refer clause 33 of the Listing Agreement) send to each stock exchange, a copy of the proceedings of the general
six copies of the alterations of
the
meeting in case of
listed company (Refer clause gg or the Listing
Agreement).
8. File with the Registrar of companies, e-form 23 along with a copy of the
9.
special resolution passed by the company with a copy of the explanatory statement annexed to the notice of the meeting and the amended copy of memorandum of association attached to the d-form, within one monih ot passing of the resolution. Obtain from the Registrar of Gompanies, certificate of registration of the alteration of the memorandum. Under McA-21, the user may select "Get certified copy" and follow the procedure. once the requesis reach the concerned MCA official, the official will takeout the printouts of the documents and sign it ivith seal and deliver the same in physical form.
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10. Amend each copy of the memorandum of association of the company available in the office or in the alternative fresh copies of memoranOum ot
association may be printed.
Question No.3
(a) ABC
r.s
a /isfed company. Enumerate fhe sfeps involved in

of Bonus Shares.
r.ssue
shares.
of equity
(6 marks)
(10 marks)
(b)
Dr.scuss fhe sfeps involved m rbsue
Ansirer to Question No. 3(a)

Steps involved in issue of equity shares
The various steps involved in public.issue of shares are enumerated below: 1. Before making any issue of capital, it is to be ensured that the proposed issue complies with the eligibility norms and other provisions of sEBl (tssue of Capital and Disclosure Requirements) Regulations, 2009.
2.
convened for obtaining their consent to the proposed issue of shares if the articles so require. 3. A copy of the Mbmorandum and Articles of Association of the company is to be sent to the stock Exchanges where the shares are to be enlisted, for approval [Section 73(1 )]. 4. Appoint one or more Merchant Bankers to act as managers to the public issue. The company should enter into a memorandum of understanding with the managers to the issue and decide the fees payable to them. lf more than one Merchant Bankers are associated with the isiue, the inter-se allocation of responsibility of each of them shall be disclosed in the offer document. The company should in consultation with the Managers to the issue, decide
A general meeting of the shareholders (annual or extraordinary) is to be
upon the appointment of the following other agencies (holding
certificate of reg istration, wherever com pu lsory) : (a) Registrars to the lssue; (b) collecting bankers to the lssue; (c) Advisors to the lssue; (d) Underwriters to the lssue; (e) Brokers to the lssue; (t) printers; (g) Advertising Agents etc. To draft a prospectus in accordance with schedule ll of the companies Act, 1956 and an abridged prospectus as required under section 56(3) of the Act. The prospectus should contain the disclosures as required by part A of sEBl
Regulations
7.
valid
The draft prospectus alongwith the application form for issue of shares is required to be approved by the solicitors/legal advisors of the company to ensure that it contains all disclosures and information as r:equired by various
Memorandum of understanding to sEBl at least 30 days prior to-the registering the prospectus with Registrar of Companies. The issuer shall, simultaneously while regiitering the prospectus with the Registrar of companies file a copy thereof with the Board through the lead
statutes, rules, notifications, etc. submit draft prospectus complete in all respects alongwith the Due Ditigence certificate, inter-se allocation of Responsibilities certificate and a copy ot
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10.
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The draft offer document filed with the Board shall be made public, for comments, if any, for a period of at least twenty.one days from the date of such filing, by hosting it on the websites of the Board, recognized stock
exchanges where specified securities are proposed to be listed and merchant bankers associated with the issue.
12. Check that the particulars as per audited statements contained in the prospectus are not more than six months old from the issue opening date.
However, Government company's auditors' report in the prospectus shall not be more than six months from the date of filing the prospectus with the ROC or stock exchanges as the case may be. 14. The Board may specify changes or issue observations, if any, on the draft offer document. 15. lf the Board specifies changes or issues observations on the draft offer document, the issuer and lead merchant banker shall carry out such changes in the draft otfer document and comply with the'observations issued by the Board before registering the prospectus with the Registrar of Companies or filing the letter of offer with the designated stock exchange. 16. Check that the two copies of final printed copy of the final offer document have been sent to dealing offices of SEBI at least within three days of filing offer document with Registrar of Companies/Stock Exchange as the case
13.
may be. 17. Check that lead merchant banker has also submitted one final printed copy of the final offer document alongwith the computer floppy containing the final prospectus/letter of offer to Primary Market Department, SEBI, Mittal Court, A Wing, Ground Floor, Nariman Point, Mumbai.
18.
19.
20.
21.
22.
Check that the public issue offer documents and other issue material has been despatched to the various stock exchanges, brokers, underuvriters, bankers to the issue etc. in advance as agreed upon. Check that 20 copies of the prospectus and application form has been despatched in advdnce of the issue opening date to various lnvestor Associations. Before filing prospectus with the Registrar of Companies, the company should submit an application(s) to the Stock Exchange(s) for enlistment of securities offered to the public by the said issue [Section 73(1)]. The fact that an application(s) has/have been made to the Stock Exchange(s) must be stated in the prospectus. After receipt of the intimation from Registrar of Companies regarding registralion of prospectus, the company should take steps to issue the prospectus within 90 days of its registration with ROC [Section 64(4) of Companies Actl. lssue must be kept open for atleast 3 working days and not more than 10 working days. The date of opening and closing of the subsciiption list should be intimated to all the collecting and controlling bianches of the bank with whom the company has entered into an agreement for the collection of applicafion forms. Further, the company should ensure that a separate bank
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account is opened for the purpose of collecting the proceeds of the issues as required b! Section 73 of the Companies Act and furnish to the controlling branches the resoluticn passed by the Board of directors for opening bank
account.
23. Minirlum
subscription For Non-underwritten Public /ssues
lf the company does not receive the minimum subscription of 90% of
the
issued amount on the date of closure of the issue, or if the subscription level falls below 90% after the closure of issue on account of cheques having being returned unpaid or withdrawal of applications, the company would refund the entire subscription amount received within 15 days of the closure of the issue. lf there is a delay beyond B days after the company becomes liable to pay the amount, the company is required to pay interest as per Section 73 of the Companies Act 1956. .For Underwritten Public lssues lf the company does not receive the minimum subscription of 90% of the net offer to public including devolvement of Underwriters within 60 days from the
date of closure of the issue, the company would refund the
entire
subscription amount received within 70 days of the closure of the issue. lf there is a delay beyond 8.days after the company becomes liable to pay the amount, the company is required to pay interest prescribed under Section 73 of the Companies Act 1956.
24.
return of allotment in e-Form No. 2 of the Companies (Central Government's) General Rules and Forms, 1956 should be filed with the Registrar of Companies within 30 days of the date of allotment along with the fees as prescribed in Schedule X of the Act. 25. (i) Along with -e-Form No. 2, e-Form No. 3 showing particulars of contracts relating to shares has also to be filed, where a company allots shares for consideration other than cash without entering into any written
agreement.
(ii)
26.
27.
e-Form No. 4 containing the statement of the amount or rate percentage of the commission payable on shares together with a copy of the contract for payment of commission, if any, should be filed with the Registrar before such commission is paid. The refund orders for an amount exceeding Rs. 1,500 should be sent to the applicants by registered post only; whereas those below Rs. 1,500 can be sent ljnder Certificate of Posting (Deptt.'s Circutar 1/93 dated 16 3.1993). As per Section 113, the company should deliver the share certificates within 3 months after the allotment of shares.
Answer to Question No. 3(b) Steps involved in lssue of Bonus Shares
A company issuing bonus shares should ensure that the issue is in conformity with the regulations for bonus issue laid down by SEBI (lssue of Capital and
Disclosure Requirements) Regulations, 2009.
The procedure for issue of bonus shares by a listed company is enumerated
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1.
Ensure that bonus issue has been made out of free reserves built out of the genuine profits or securities premium collected in cash only.
2.
Ensure that reserves created by revaluation

capitalised.
of fixed assets are
not
3. Ensure
4.
5. 6.
that the company has not defaulted in payment of interest or principal in respect of fixed deposits and interest on existing debentures or principal on redemption thereof or in respect of the payment of statutory dues of the employees such as contribution to provident fund, gratuity, bonus etc. Ensure that the bonus issue is not made in lieu of dividend There should be a provision in the articles of association of the company permitting issue of bonus shares; if not, steps should be taken to alter the
articles suitably.
7.
The share capital as increased by the proposed bonus issue should be well within the autl'lorised capital of the company; if not; necessary steps have to be taken to increase the authorised capital. Fix the date for the Board Meeting for considering the following matters: - To approve the bonus issue; be passed at a general meeting; To approve the resolution to for increase of - To approve requisite resolutionmemorandum andthe capital and the articles (if consequential alteration of the
necessary)
8.
9.
To decide (or authorise managing director/secretary or some other officer of the company to decide) the dates for fixing a record date. lf there are any partly paid-up shares, ensure that these are made fully paidup before the bonus issue is recommended by the Board of directors. The date'of the Board Meeting at which the proposal for bonus issue is
proposed to be considered should be notified to the Stock Exchange(s)
where the company's shares are listed. 10. Hold the Board Meeting and get the proposal approved by the Board. 11. lntimate the decision taken at the board meeting to the Stock Exchange(s). 12. A company which announces bonus issue after the approval of board of directors and does not require shareholders' approval for capitalisation of profits or reserves for making bonus issue as per the Articles of Association, shall implement bonus issue within fifteen days from the date of approval of the issue by the board of directors of the company and shall not have the option of changing the decision However, where the company is required to seek shareholders' approval for capitalisation of profits or reserves for making bonus issue as per the Articles of Association, the bonus issue shall be implemented within two months from the date of the meeting of the board of directors wherein the decision to announce bonus was taken subject to shareholders' approval.
'
13. Arrangements for convening the general meeting should then be
made
keeping in view the requirements of the Companies Act, with regard to length of notice, explanatory statement etc. Also three copies of the notice should
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be sent to the Stock Exchange(s) concerned.
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14. Hold the general meeting and get the resolution for issue of bonus shares passed by the members. A copy of the proceedings of the meeting is to be
forwarded to the concerned Stock Exchange(s).
15. Within 30 days of the date of the general mepting, file the necessary returns in the prescribed forms e.g. e-Form Nos. 5, 23 to thb Registrar of
Companies 16. Fix the date for closure of register of members or record date and get the same approved by the Board of director,s. lssue a general notice under Section 154 of Companies Act in respect of the fixation of the record date in two newspapers, one in English language and other in the language of the region in which the Registered Office of the company is situated. 17. Give 30 days notice to the Stock Exchange(s) concerned before the date of book closure/record date. 18. After the record date, process the transfers received and prepare a list of members entitled to bonus shares on the basis of the register of members as
updated. This list

Committee thereof.
of allottees is to be approved by the Board or
any
19. File return of allotment with the Registrar of Companies within 30 days of allotment (Section 75 of the Companies Act). Also intimate Stock
20.
Exchange(s) concerned regarding the allotments made. Get the share certificates printed, prepared and issued to the allottees as per the provisions of Companies (lssue of Share Certificates) Rules, 1960. bonus shares allotted.
21. Submit an application to the Stock Exchange(s) concerned for listing the
Procedure for bonus issue by an unlisted company
1.
At the Board meeting resolutions for the following purposes will be passed: To approve the proposal for the bonus issue To approve the resolution to be passed at a general meeting To approve requisite resolution for increase of the capital and
:-
consequential alteration
of the
memorandum and
the articles (if
'
necessary) To decide on fixing a record date
2.
3.
4.
5.
Ageneral meeting will be convened to pass necessary resolution/s. Within 30 days of the general meeting, file the necessary returns in the prescribed forms e.g. e-Form Nos. 5, 23, etc. to the Registrar of Companies. After the record date, preilare a list of members entitled to the_ bonus shares on the basis of the register of members as updated. Convene Board meeting (or of a meeting of committee of drrectors) for the allotment of bonus shares and allot the bonus shares. Under section 206A where any instrument of transfer of shares has been delivered to a company for registration and the transfer of such shares has not been registered by the company, it shall keep in abeyance issue of fully paid-up bonus shares in relation to such shares in pursuance of sub-section (3) of section 205.
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6. File a return of allotm6nt with the Registrar within 30 days of the allotment. 7. Prepare and dispatch the share certificates relating to the bonus shares
allotted within three months of the date of allotment and make entries of the shares allotted in the register of members.
Question No.4 (a) Draft a specimen Board Resolution approving the registration of transfel of
shares.
(4 marks)
(b)
Draft a specimen resolution for variation of rights of equity shareholders.
(c)
(6 marks)
What are the condition subject to which debt securities can be rolled over. (6 marks)
Answer to Question No. 4(a)

SPECIMEN OF THE BOARD RESOLUTION APPROVING THE REGISTRATION OF TRANSFER OF SHARES
"RESOLVED THAT Registration of transfer of ....... fully paid equity shares of the company as per details in the register of share transfers of the company entered on page .... to ........, entries Nos......to ....... (both inclusive), as placed before the meeting and each page be initialed by the chairman of the meeting as a mark of identification, be and is hereby considered and approved; Company Secretary of the RESOLVED FURTHER THAT Shri .......... Company, be and is hereby authorised to endorse the relevant share. certificates under his signature, arrange for their dispatch to the transferees of the shares and make appropriate entries in the register of members and other records of the
company."

SPECIMEN RESOLUTIONS FOR VARIATION OF RIGHTS OF EQUITY SHAREHOLDERS (i.e. MEMBERS)
Resolution for the extension of the date of redemption of Preference Shares (for variation of rights)
'RESOLVED that consent of shareholders be and is hereby accorded to the variation of the rights attached to the Equity Shares of the Company deemed to have been caused by reason of extension of the date of redemption and increase in rate of interest of 11o/o Redeemable Cumulative Preference Shares (First Series) of Rs. 100 each fully paid-up, agreed to by the holders of the said Preference Shares."
Explanatory Statement
11% Redeemable Cumulative Preference Shares of Rs. First Series of 10,000 100 each fully paid-up issued by the Company in 1995 fell due for redemption on 200..,..... The date was extended and accordingly the shares were to be redeemed in five equal instalments of Rs. 2.00 lakhs each annually commencing from .........,....200..."..... ln the interest of the Company it has been considered expedient not to redeem these Preference Shares immediately.
ln any case, in the absence of the required reserves it would not be possible to
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redeem the said Preference Shares in terms of Section B0 of the Companies Act, 1956.The Company's request to the Preference Shareholders to give their consent to this effect is under their consideration. A meeting of the holders of these 11% Redeemable Cumulative Preference Shares (First Series of Rs. 100 each fully paidup) has been convened to consider the necessary resolution for extension of date of redemption and increase in the rate of interest.
As holders of the Equity Shares, your rights are deemed to be affected from the date of extension of redemption in respect of First Series of the Preference Shares as aforesaid.
It is, therefore, proposed that your consent be obtained to such variation of your rights as per the resolution. The necessary resolution for extending the date of redemption of and increasing the rate of dividend are the 11% Redeemable Cumulative Preference Shares of the company is included separately in the notice.
Directors of the company are interested in the said resolution except to the extent of their shareholdings.
Answer to Question No. 4(c)

The debt securities issued.can be rolled over subject to the following conditions:
(a) The (b) (c) (d)
roll-over is approved by a special resolution passed by the holders of debt securities through postal ballot having the consent of not less than 75% of the holders by value of such debt securities; atleast one rating is obtained from a credit rating agency within a period of six months prior to the due date of redemption and is disclosed in the notice referred to in sub-regulation (2); fresh trust deed shall be executed at the time of such roll-over or the existing trust deed may be continued if the trust deed provides for such continuation; adequate security shall be created or maintained in respect of such debt securities to be rolled-over.
The issuer shall redeem the debt securities of all the debt securities holders, who have not given their positive consent to the roll-over.
Question No.5 (a)Exptainthegeneralstructureofane-formandthee;fitingprocess.
(b)
the rightshares, the shareholders of a company have a Or" to subscribe to these shares. Comment. (c) Who can be a company secretary?
tn
","'0t,ff'fil, (4 marks)
(4 marks)

The general structure of an e-form dnd the e-filing process
Pre-fill
Pre-fill in an e-Form is used for filling automatically, the requisite data from the system without repeatedly entering the same. For example, by entering the CIN of
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the company, the name and address of the registered office of the company shall automatically be pre-filled by the system without any fresh entry. Attachment
An attachment refers to a document that is sent as an enclosure with an e-Form by means of an attached file. The objective of the attachment is to provide details relevant to the e-Form for processing. While some attachments are optional, some are mandatory in nature.
Modify
Once the user has done 'Check Form', the form gets locked and it cannot be edited. lf the user wishes to make any alteration, the form can be overwritten by
clicking "Modify'l button.
Radio Button Frequent use of radio buttons has been done in the e-Form. While filling the eForm one is required to tick applicable button out of two or more radio buttons given against each point. Gheck Box Applicable Check box is required to tick out of the two or more boxes wherever it
appears in the e-Form.
Drop Down Box

Drop down box is a box wherein at the end a downward arrow is provided. On clicking the arrow various applicable choices appear. One is required to highlight the applicable choice and that will be filled in the box.
Text box
Text box is meant to provide details on the relevant point by the person filling the e-form. Space provided is generally adequate for the text to be written. However, if the space is not sufficient for a particular matter, information can be given in the annexure to the form indicating the same in the box.
Gountry Code
Some times the applicant is required to fill up the country code in the e-Form. This is available in the instruction kit.
Stock Exchange Gode All the stock exchanges of the country have been divided into two categories A and B. Listed companies are required to mention the stock exchange where the
shares are listed with the help of the code.
Check Form By clicking "Check Form", the user will be in a position to find out whether the mandatory fields in an e-Form are duly filled-in. For example, if the user enters alphabets in "Date of Appointment of Director" field, he/she will be asked to correct the entered '
information.
lf the size of e-Form including attachment is of bigger size then the attachment
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may be filed through an addendum. lf the size of attachment is even bigger in size
then the details may be submifted in a floppy or compact disc at the ROC office.
Pre-Scrutiny Pre-scrutiny is a functionality that is used for checking whether certain core aspects are properly fitled in the e-Form. The user has to make the necessary attachments in PDF format before submifting the e-Form for pre-scrutiny.
How to Affix Digital Signature?
Theprocessofaffixingdigitalsignatureisasfollows
(a) User clicks the provision (b) (c)

Submit
provided (signature affixing icon) on the e-Form, against his role, to digitally sign it. Utility to sign the e-Form opens, where user selects the intended certificate to digitally sign the e-Form. After selecting the certificate, utility digitally signs the e-Form with the certificate and the certificate information gets embedded in the e-Form.
submission of an e-Form in case of off-line filling is presented below: (a) User logs in to MCA2I portaland uses e-Form upload service (b) User browses the e-Form and clicks on "Submit" button (c) User will be shown errors, if anY
An e-Form can be submitted after it has been digitally signed. The process of
(d) lf e-Form is successfully
and the current status of the same is valid and that the certificate has not been revoked or suspended.
submitted, user will get confirmation message and payment screen. will lead fee The digital certificate is validated to ensure that the certificate has not expired
Answer to Question No. 5(b) ln the rights shares, the shareholders of a company have a pre-emptive right to subscribe to these shares. Where a company proposes to increase the subscribed capital of a company by issuing further shares, the shares are offered for subscription to the existing shareholders of the company in a certain proportion. This is a privilege given to shareholders of a company to subscribe pro rata to a new issue of securities. It is a statutory right of shareholders to have offered the new shares, and to subscribe to them. The shareholders, who receive offers for subscribing to the rights shares, are also entitled to renounce this right. Articles of association usually contain regulations on rights issue. Provisions ol Section 81 of the Companies Act, 1956 are mandatory for all public companies, listed as well as unlis'ted, but optional for private companies. ln case, a private company wants to have such provision, articles of association of the company must specifically provide for it. Answer to Question No. 5(c)
WHO CAN BE A COMPANY SECRETARY According
Company Secretary within the meaning of clause (c) of Sub-section (1) of Section 2 o
to Section 2(45) of the Companies Act, 1956, "Secretary" means
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the Company Secretaries Act, 1980 and includes any other individual possessing the prescribed qualifications and appointed to perform the duties which may be perfoimed
by a secretary under the Act or any other ministerial or administrative duties.
According to clause (c) of sub-section (1) of section 2 of the company secretaries Act, 1980, a company secretary means a person who is a member of the lnstitute of Company Secretaries of lndia.
Question No.6
Write short notes on the following:
(ii) Filing of Agreements with Managerial Personnel (iii) Alteration of Articles of Association of a Company (iv) Remuneration of Auditors
Answer to Question No. 6(i) Corporate ldentity Number (GtN)
Corporate ldeqtity Number
(4 marks each)
Every company has been allocated a Corporate ldentity Number (ClN). CIN can
be found from the MCA 21 portal through search based on: ROC Registration No.
Existing Company Name Old Name of Company (in case of change of name, user is required to enter old name and the system displays corresponding current name).
(inactive) CIN Numberl.
lnactive CIN fln case of change of ClN, the user is required to enter previous
Answer to Question No. 6(ii) FILING OF AGREEMENTS WITH MANAGERIAL PERSONNEL As per the provisions of section 269 of the companies Act, 1956, every public company, or a private company which is a subsidiary of a public company, having a paid-up share capital of Rs. five crores, shall have a managing or whole-time director or a manager.
are satisfied, then the appointment is guided by articles of association of the

company.
The appointment requires approval from Central Government if the conditions specified in Part I and ll of Schedule Xlll are not satisfied. Further, if the conditions
lf articles of association provide for the appointment to be made at a general meeting, then appointment should be made at a .general meeting thrdugh a resolution. Else, the appointment is required to be made at duly convened Board meeting with consent of all directors present at meeting. _ E-form 25C is required to be filed electronically with the Registrar within 90 days from the date on which a resolution was passed by the Board. - Before filing e-form 25C, it is to be ensured that e-form 23 has already beeri filed
for registration of agreement entered with managing director. ln e-form ZSC, tfre service request number of related e-form 23 which wbs-filed for registration agreement for sefting out the terms and conditions of employment is required to be given.
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lf
Schedule
Xlll is not
complied with then approval
of Central Government
is
required and application to the Central Government is req,uired to be made within 90 days of appointment in e-form No. \
25A.
Answer to Question No. 6(iii)

ALTERATION OF ARTICLES OF ASSOCIATION OF A COMPANY Section 31 of the Companies Act, 1956 lays down that subject to the provisions of the Act and to the conditions contained in its memorandum, a company may, by a special resolution, alter its articles; Provided no alteration made in the articles under this sub-section, which has the effect of converting a public company into a private company, shall have effect unless such alteration has been approved by the CentralGovernment. Sub-section (2) of Section 31 states that any alteration so made shall, subject to the provisions of the Act, be as valid as if originally contained in the articles and be subject, in like manner, to alteration by special resolution. Where any alteration as mentioned in the proviso to Sub-section (1) has been approved by the Central Government, a printed copy of the articles as altered shall be filed by the company with the Registrar within one month of the date of receipt of the order of approval.
A company may alter its articles in accordance with the above provisions in any
of the manners mentioned below: (i) by adoption of new set of articles; (ii) by addition/insertion of a new article; (iii) by deletion of an article; (iv) by amendment of a specific article; or (v) by substitution of a specific article.
Answer to Question No. 6(iv)

REMUNERATION OF AUDITORS
ln accordance with the provisions of
Sub-section (8)
of Section 224 ot lhe
Companies Act, 1956, the remuneration of the auditors of a company(a) in the case of an auditor appointed by the Board or the Central Government, may be fixed by the Board or the Central Government, as the case may be;
(aa) in the case of an auditor appointed under Section 619 of, the Act by the
Comptroller and Auditor General of lndia, shall be fixed by the company in general meeting or in such manner as the company in general meeting may determine;and subject to clause (a), shall be fixed by the'company in general meeting or in such manner as the company in general meeting may determine.
(b)
TEST PAPER 212010
(oPTtoNAL) (This Test Paper is based on Study Lesson Nos. 11 to 20)

Time allowed: 3 hours Maximum marks: 100
Question No.1
(a) Explain the procedure for holding first meeting of the board of directors. (b) Explain the procedure for declaration of dividend out of *rO(i3r;"i"*:"#:;j
PROCEDURE FOR HOLDING FIRST MEETING OF THE BOARD OF DIRECTORS The procedural steps for first Board meetihg are as follows: 1. Consult the company's Articles of Association to see who can issue notice for convening a Board meeting and follow the procedure laid down by Articles of Association in this regard ln case of Producer Companies, the Chief Executive shall give notice to every director for the time being in lndia, and at his usual address in lndia to every other director, at least seven days prior to the date of meeting: The Board meeting of Producer Company may also be called at a shorter notice after recording reasons thereof in writing. 2. The Secretary or any other person so authorised shall issue notice in writing to every director of the company for the time being in lndia and at his usual address in lndia in case of every other director (Section 286). 3. The day of the meeting can be on a public holiday, unless the Articles of
Association provide otherwise, However, the adjourned Board Meeting (adjourned for the want of quorum) should not be held on a public holiday
(Section 288).
4,
5.
7.
8.
-
The first meeting should be convened and held within one month from the date of incorporation [Section 224(5)1. lt is not obligatory to give agenda in the notice, but it is a good secretarial practice to enclose the agenda to the notice of the meeting. Contact and request all the directors to attend the meeting and arrange the facilities required by them in this regard, like conveyance, location of venue
etc.
9.
Before holding the meeting, welcome the directors and obtain their signatures on the Attendance Register. lf quorum, as required under Section 287, is presenl declare the meeting in order and inform the names of the directors who sought leave of absence from attending the meeting. The quorum for the meeting of Producer Company shall be one third of the total strength of directors, subject to a
minimum of three. 10. The directors who are present at the meeting may elect one of them as the Chairman of the meeting and request him to take the Chair.
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11. Help the Chairman to conduct the meeting as per the agenda. 12, lf any director wants to place any other item for the discussion at the meeting, then such item may be taken up with the permission of the
Chairman.
13. Decide the date, time and place of the next Board meeting. 14. After the meeting is over, prepare draft minutes of the meeting; get
company.
it
reviewed by the chairman of the meeting and/or the Managing Director of the
15. Send copy of draft minutes of the meeting to each of the directors of
the
company for information and comments.
16. Contact and collect draft minutes from each of the directors with their
comments. After that, in consultation with the Chairman/Managing Director finaliie the minutes and enter them into the Minutes Book. All pages should be consecutively numbered. 17. Such final minutes may be signed and dated by the Chairman of the meeting or by the Chairman of the succeeding meeting. All pages of the minutes are to be initialled and the last page of the minutes is to be signed and dated by the Chairman.
Answerto Question No. 1(b)

Procedure for Declaration of Dividend out of Company's Reserues
A company,which wishes to declare dividend out of reserves in any year must fulfil the following conditions in accordance with the Companies (Declaration of
Dividend out of Reserves) Rules, 1975:
(a)
The rate of dividend to be declared must not be more than the average of the rates at which dividend was declared in the flve years immediately preceding the year in which the company proposes to declare dividend out of reserves or 1Oolo of the paid-up share capital, whichever is less [Rule 2(i)];
(b) The amount to be drawn from the reserves must not be more tfran an amount equal to 1OP/o ol the aggregate of paid-up share capital and free reserves
[Rule 2(ii)];
(c) lf in the year for which the company proposes to declare
(d)
dividend out of the reserves, it has incurred a loss, the amount drawn from the reserves must first be utilised to set off the loss before any dividend is declared for that year on equity shares or preference shares [Rule 2(ii)l; The amount of residual reserves, i.e. the reseryes remaining in balance after the amount sufficient to set off the loss and declaration of dividend, must be at least 15o/o ot the paid-up share capital of the company [Rule 2(iii)].
The procedure is as follows:
(1) Give notice as per Section 286 of the Companies Act, 1956 to all the
directors of the company for holding a Board meeting. ln the meeting, take decision to declare dividend out of company's reserves because of inadequacy or absence of profits and also fix the date, time and place of the
Annual General Meeting. Authorize the Company Secretary or any competent person if company does not have a company secretary to issue
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the notice of the AGM on behalf of the Board of directors of the company to all the members, directors and auditors of the company and other persons entitled to receive the same. (2) Ensure that the Companies (Declaration of Dividend out of Reserves) Rules, 1975 are complied with. (3) Ensure that while computing the amount of profits, the amount transferred from the Development Rebate Reserve is included and all items of . capital reserves including reserves created by revaluation of assets are
excluded.
(4) ln the case of listed companies, inform the Stock Exchange with which the shares of the @mpany are listed within 15 minutes of closure of Board meeting about decision to recommend declaration of dividend out of
Company's Reserves. [Clause 20 of listing agreement]
(5) lssue notices in writing at least 21 days before the date of the Annual (6) (7)
General Meeting and hold the meeting and pass the necessary resolution. ln the case of listed companies, forward three copies of the notice and a copy of the proceeding of the general meeting to the Stock Exchange. Open a bank account for making dividend payment and credit the said bank
account with the total amount of dividend payable within five days of declaration of dividend. (8) lssue dividend warrants within 30 days from the date of declaration of
dividend.
Question No.2'
Write short notes on
(a)
Powers to be exercised only at Board Meeting Secretarial Standard Register of charges

Role check
(b) (c) (d)
requirement
(4 marks each)

Powers to be exercised only at Board Meetings
Secfion 292 provides that the following powers of company shallbe exercised by the board by means of resolution passed at the meeting of Board:(a) to make calls on shareholders in respect of money unpaid on their shares;
(b) (c) (d) (e) (f)

'below:
to issue debentures; to borrow moneys otherwise than on debentures; to invest funds of the company; to make loans; and to buy back securities.
The Act has also prescribed certain other items of business which can be
transacted by the Board only at Meetings. An illustrative list of such items is given
(i)
approval of the fixed deposits advertisement (Section 58A);
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(ii)
(iii) (iv) making contribution to a political party or for political purposes

2e3A(2)l;
(v) approving
registration of trensfer in the absence of the instrument of transfer [proviso to Section 108(1)l; filling casualvacancies on the Board (Section 262);
[Section
contracts in which any Director
or his relative, firm, private
company of which he is a member or Director is interested (Section 297); (vi) recording disclosure of interest of Directors (Sections 299 and 305); (vii) receiving notice of disclosure of Directors' shareholdings [Section 308(2)]; (viii) appointment as a Managing Director or Manager of a person who is already the Managing Director or Manager of another'company (Sections 316 and
386); (ix) investments in shares, etc. (Section 372A); and (x) filing a declaration of solvency (Section 488).
Answer to Question No. 2(b) Secretarial Standard on Dividend (SS-3)

Declaration and distribution of dividends is a complicated task involving both financial and non-financial considerations. Recognizing the relevance of the topic, Secretarial Standard Board formulated the Secretarial Standard on Dividend.
The Secretarial Standard lays down a set of principles in relation to the declaration and payment of dividend, interim dividend, treatment of unpaid Dividend, revocation of dividend as well as the preservation of dividend warrants, maintenance of dividend registers, disclosure requirements and matters incidental thereto. The Standard, by stipulating requirements in regard to all allied and significant matters such as intimation to members before transferring unpaid dividend to lnvestor Education and Protection Fund, preservation of dividend Registers, validity of dividend warrants etc. attempts to giive the right direction to the corporate sector, promote uniformity of practices and ensure effective corporate governance.
Answer to Question No. 2(c) Register of Charges Section 143 of the Act, provides that every company shall keep at its registered office a register of charges and enter therein all charges specifically affecting property of the company and all floating charges on the undertaking or on any property of the company, giving in each cases(i) a short description of the property charged;
(ii) the amount of the charge; and (iii) except in the case of securities of bearer, the names of the persons entitled
to the charge.
It requires the entries to be made in the register in respect of all the charges specifically affecting property of the company as well as all floating charges on the undertaking or on any property of the company. The requirement under this section
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of charges. lt is also not concerned with whether a certificate of registration of

charge has been issued by the Registrar or not. available for inspection by creditors not less than two hours in each day.
has nothing to do with the filing or non-filing of, or the registration or non-registration
a
The register of charge kept at the registered office of the Company shall be / members of the Company without any fee for

Role Gheck Requirement 'Role Check'functionality envisages that MCA21 System shall verify whether the digital signatures affixed on the e-Form actually belong to signatory of the company and/or of a practising professional (if applicable). Directors, Managers and Secretary of the Company and practising professionals i.e. CA, CS & CWA are required to register their DSC on MCA portal, On registr"ation of DSC, MCA system will capture the details of the said persons' DSC against their DIN/PAN, as the case may be. The MCA21 System verifies the credentials of the person(s) signing the e-Form from the data-base of the companies created on the basis of DIN/PAN of Directors/Manager & Secretary submitted through Form DIN-3 by the companies. Similarly, particulars of professional certifying the form is verified from the data-base of 'Practising Professionals' created on the basis of data provided by Professional I pstitutes.
ln case of mis-match, system will throw error message and the form will not be accepted. For 'Role Check' purpose, Fqrm DIN 3/Form 32 must be filed by the company for all the signatories (director, manager, secretary) of the company. lf the company has not filed Form DIN 3 / Form 32, the company will not be able to file any e-Form on the MCA portal, as the system shall not have the details of the signatories
of the company.
Question No.3
Draft specimen resolution for the following along with requisite explanatory
state me n t w h e reve r n ecessa4f-
(a) Approving Directors Report (b) Keeping and maintaining
(c) (d)
btooks of accounts at registered office Confirming Board Resolution of giving guarantee Making loan to another company.
a place other than the

(4 marks each)

SPECIMEN BOARD RESOLUTION FOR APPROVAL OF THE
DIRECTORS REPORT
"RESOLVED that the draft Directors' Report to the Shareholders of the company for the year ended 31st March 2008 prepared in accordance with the provisions of Section 217 of the Companies Act, 1956 together with its Annexures and also containing suitable explanation and fullest information on every reservation,
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qualification or adverse remarks contained in Auditors reports, as submitted to the meeting, be and is hereby approved.'
RESOLVED FURTHER That

Company."
Shri......,............. Managing Director and Director be and are hereby jointly authorized to sign the Directors' Report for and on behalf of the Board of the
Shri... Shri..,..
Chairman
of the company,

SPECIMEN BOARD RESOLUTION FOR KEEPING AND MAINTAINING BOOKS OF ACCOUNTS AT A PLACE OTHER THAN THE REGISTERED OFFICE "RESOLVED THAT pursuant to the proviso to Section 209(1) of the Companies Act, 1956, approval of Board of Directors of the Company be and is hereby accorded
to keep the books of
acCounts ....... with effect from
of the company at the company's head office at
RESOLVED FURTHER That the company secretary, Mr.
is hereby authorized to file electronically E-Form No. 23AA with the Registrar of
............,
be and
Companies
.. at
.......,...
with the requisite filing fees within the
prescribed time of seven days hereof."

SPECTMEN OF SPECIAL RESOLUTTON CONFIRMING BOARD RESOLUTION OF GIVING GUARANTEE
"RESOLVED that pursuant to Section 372A and other applicable provisions, if any, of the Companies Act, 1956 or any modification or re-enactment thereof, the guarantee of the company for Rs. 5 crore furnished by the Chairman & Managing Director of the Company as per the resolution passed in the meeting of the Board of directors of the company held on . to The Hongkong and Shanghai Banking Corporation Ltd., New Delhi, for the Banking facilities granted to WML Ltd., in lieu of the guarantee for Rs. 5,61,66,250.00 furnished earlier by the company, be and is hereby confirmed and approved."
The Board of directors of the company at its meeting held on ............. discussed the request of WML Ltd. promoted by the company for giving its corporate guarantee for Rs. 5 crore to The Hongkong and Shanghai Banking Corporation Ltd., New Delhi for the banking facilities granted to WML Ltd., in lieu of the guarantee of the company for Rs. 5 crore furnished earlier by the company.
The Board was satisfied with the existence of the exceptional circumstances i.e. emergent need of funds by WML Ltd., prevented the company from obtaining previous authorisation by a Special Resolution to be passed in a General Meeting for giving such guarantee. Accordingly, the Board authorised the Chairman & Managing Director of the company to furnish the guarantee as requested by WML Ltd.
The Board of directors recommends the resolution as set out in the notice for
confirmation of the shareholders.
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A.K. who are also None of the directors save and except shri L.K.. and. shri did;;;;; d;i;;rd ;lwut tto, are conberned or interested in the resolution'
spEcrMEN"r|,flff ,s'^T,Ei3br#3I38ilT?ft
.RESOLVED that pursuant to section 372A and other applicable provisions' if ":rNGBoARDro Act 1956 or any.modification or re-enactment thereof and "nv,'oiii"-corpr"i"l oi in" fin"ncial lnstitutions, if any, as may be required' subject to the upproJJS Board of Directors of the approval of the .orp"nv n""nu i. hereby accorded to,the -for directty-oi inOirectly making of inve.stmentl .bV way of subscription'
;;;;y
purchase or otherwise
il;;iil il;';i
pt*iaing-t';iurities in, connection with loan(s) made/to be promoted by and "nd/ot" by any bank, comp;;t;Gi.t t:'. the following companies2,600'00 lakh from Rs'
assoctated with the
in equity sharei of, andlor making loans and/or giving made
tt't" tot"t sum not eiceeding accruals, over and above the existing investments tii" made or given by the "onp-rnyllni"rn"r in shares/deuentureJioinel t".uiit-i"", loans and guarantees company, as
;;p;.ifoi
under:-
(Rs. rn lacs)
Company
lnvestment in
Equity shares 1000.00 Nil
Loans 400.00 100.00
Guaranteel
SecuritY
Overall
limit
2200.00 400.00 2600.00
WML Ltd.
SPP Ltd.
1200.00 350.00
be and. is. hereby RESOLVED further that the Board of directors of the company provide security(ies), for authorised to make invesiments/loan.s, give guarantee(s), proper and to authorise any as the amount as specifled LUouu,'"1 it may-be deem fit and
iffilG;';;ii";';;n";;Gt
the tompany to finarise the terms of such may be and .sign investment(s), toan(sj,' gr;-/."t".ts), security(i6.s) .as the case
necessary steps for giving necessary papers on'be-naf of the company'airO laf<e all effect to this resolution."
lo-ans As on date the aggregate amount of the investments in shares/debentures, to other t"Oe, given, op pr:ovided ty. the company "rO'gr"r".G"tliL"liiityGi limits pr6vided in Section 372A.of the Companies Act bodies corporate internal accruals to' "*"""0!'ind igSO.-Th"'.ompany,titt t1"u" to make investments/loans from its made to WML Ltd' and and/or provide gu"r"ni""itioi securit(ie9) for the loan(s) to meet their temporary spp-rtb., from-ot"o oy 6 associateb'with the company "i working caPital requirements'
to recommend The Board of Directors at its meeting held or...........:...- decided for approval of the shareholders' tne SpecLf nesolution as set out in the notice
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None of the directors save and except shri.......... and shri............ who are also Directors on the Board of WML (Ltd.) are concerned or interested in the resolution.
Question No.4
(a) What (b) (c)
are the conditions when a document or form r.s sard to be defective? A/so, sfafe the penalty for filing false documents with registrar. Briefly describe the procedure for condonation of detay in relation to fiting of documents with ROC? Briefly exptain the scope and functions of the Secretarialsfandards Board.
state the conditions when
(d)
person is deemed to be
connected p)erson.
(4 marks each)

A form or document is defective for any one of the following reasons: (i) The form or document does not contain the neiessary enclosures;
(ii) Certain important particulars in the document or form have (iii) Certain particulars apparent on the face of it seem false; (iv) The document is not filed in time; (v) The document is not properly signed or certified.
.
been left unfilled;
lf a document is not found to be in order for any of the reasons stated above the Registrar will not register the document until the particulars left unfilled are filled or the error is rectified by the company. For this purpose, facility of resubmission is available under MCA-21 portal. However, resubmission can be made, only when the ROC requires that the company resubmit the form with corrections. lf witl'rin the date document is required to be corrected or rectified, the blank is not filled in or the apparent error is not corrected, then the Registrar is at liberty to launch prosecution against the company and its officers for default in filing the document. lf the defect is one-which requireS filing of a revised document, then, in certain cases, the Registrar of Companies may accbpt the revised form on payment of additional fee wh'rch he may determine in terms of Section 61 1(2) of the Companies Act, 1956. Penalty for Filing False Documents/Statements with the Registrar
According to section -628, if in any return, report, certificate, balance sheet, prospectus, statement or other document, required by or: for the purposes of any of the provisions of this Act, any person makes a statement which is false in lny material particular, knowing it to be false; or which omits any material fact, knowing it to be material, he shall, except when othenivise expressly provided in this Act, -be punishable with imprisonment for a term which may exterld to two years and sllall
also be liable to fine.
Answer to Question No. a(b) Procedure for Condonation of Delay by Central Government Filing of Documents with Registrar of Companies
in Relation to
The Company Secretary should follow the procedure as laid below: (1) Convene a Board Meeting and pass a resolution for seeking condonation of delay in filing the document.
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as
(2) Submit an application to the Central Government, in pdf format,
attachment to electronic form no. 65, to this effect indicating along with the reasons for such delay. The application should be accompanied by a copy of the Board Resolution seeking condonation of delay, latest audited balance sheet and profit and loss account, certified copy of the memorandum and articles of association and filing fees. (3)The Central Government may for reasons to be recorded in writing, condone the
delay.

SCOPE AND FUNCTIONS OF THE SECRETARIAL STANDARDS BOARD
The scope of SSB is to identify the areas in which Secretarial Standards need to be issued by lCSl and to formulate such Standards, taking into consideration the . applicable laws, business environment and best secretarial practices. SSB also clarifies issues arising out of such Standards and issues guidance notes for the
benefit of members of lCSl, corporate and other users.
The main functions of SSB are: (i) Formulating Secretarial Standards; (ii) Ctarifying issues arising out of the Secretarial Standards; (iii) lssuing Guidance Notes; and
(iv) Reviewing and updating the Secretarial Standards/Guidance Notes

periodic intervals.
at
Answer to Question No. 4 (d) Person is deemed to be a connected person if such person(i) is a company under the same management or group or any subsidiary company thereof within the meaning of section (18) of section 370, or subsection (11) of section 372, of the Companies Act, 1956 (1 of 1956) or subclause (g) of section 2 of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) as the case may be; or (ii) is an intermediary as specified in section 12 of the Act, lnvestment company, Trustee Company, Asset Management Company or an employee or director thereof or an otficial of a stock exchange or of clearing house or corporation; or (iii) is a merchant banker, share transfer agent, registrar to an issue, debenture trustee, broker, portfolio manager, lnvestment Advisor, sub- broker, lnvestment Company or an employee thereof, or is a member of the Board of Directors of the Asset Management Company of a mutual fund or is an employee thereof who have a fiduciary relationship with the company; (iv) is a member of the Board of Directors, or an employee, or a public financial institution as defined in Section 44 of the Cornpanies Act, 1956; or (v) is an official or an employee of a self regulatory organization recognized'or authorized by the Board of a regulatory body; or (vi) is a relative of any of the aforementioned persons;
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'
i
I
(vii) is a banker of the company; (viii) relatives of the connected person; (ix) is a concern, firm, trust, Hindu Undivided Family, company or Association of Persons wherein any of the connected persons mentioned in Clause 3(i)
above of this regulation or any of the persons mentioned in sub-clauses 1vi1, (vii) or (viii) herein above has have more than 1O% of the holding or interest.'
Question No.5
(a)
t
Explain the role of company secretary in compliance requirements.

(B marks)
(b) Briefly explain the JJ lrani committee Report and the new
t I
introduced by
it.
concepts
(B marks)

Under clause 47 of the listing agreement, a listed company has to appoint the Company Secretar:y to act as i compliance officer who'witi ne responsible for monitoring the share transfer process and reporting to the Board in its each meeting. The compliance officer will directly liaise with the authorities such as SEBI, StoCk Exchanges, Registrar of companies etc. and investors with respect to implementation of various clauses of the listing agreement, rules, regulations and other directives of such authorities and investor services and complaints on related
matters.

Dr. J J lrani Expert Committee on Company Law had submitted its report charting out the road map for a flexible, dynamic and user-friendly new company law. The Report of the Committee had also sought to bring in multifarious, progressive and visionary concepts and endeavored a significant shift from the "Governm-ent Approval Regime'to a "shareholder Approval and Disclosure Regime".
subjected to stricter regime of Corporate Governance. Further, Government companies and public financial inStitutions be subject to similar parameters with respect to disclosures and corporate Governance as other companies are subjected to.
detailed discussions and deliberations has finalized the companies Bill, 2009.
to be given flexibilities and freedom of operations and compliance at a low cost. Companies with higher public interest which access capital from public need to be
The Expert Committee had recommended that private and small companies need
The Government considered the recommendations of lrani Committee and after
New Concepts introduced by Dr. J J trani Committee in its report (1) One Person Company (OPC)
[3i :,;iflff,iil"J"'..nership
(4) (5) (6)
(LLP)
lndependent Directors Key managerial personnel Directors and Officers (D&O) lnsurance
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(7) (8) (9)

(10) (11) (12) (13) (14) (15) (16)
Rights and liabilities of independent and ndn-executive directors Freeing the Managerial Remuneration of limits Recog n ition to joint venture/shareholders' agreements Tracking and Treasury Stocks Perpetual Preference Shares Single Window Clearance for Mergers Contractual Mergers Time-bound proceedings for restructuring and liquidation lnsolvency Practitioners The insolvency fund
Question No.6
(a) (b)
Write shoft notes on
(1) One person company (2) Contractualmerger

(1) (2)
Distinguish between: SS-7 and SS-2 eharge and mortgage
(4 marks each)
(4 marks each\
Answer to Question No. 6(a)(1)

One Person Company
"One Person Company" means a company which has only one person as a
member. A company may be formed for any lawful purpose by one person, where the company to be formed is to be a One Person Company, by subscribing his name to a memorandum in the manner prescribed and complying with the requirements of this Act in respect of registratron.
However, the memorandum of a One Person Company shall indicate the name of the person who shall, in the event.of the subscriber's death, disability or otherwise, become the member of the company.
the Registrar the change, if any, in the name of the person referred to in the preceding proviso and indicated in the memorandum within such time and in such form as may be prescribed, and any such change shall not be deemed to be an
alteration of the memorandum.
Further, it shall be the duty of the member of a One Person Company to intimate
Answer to Question No. 6(a)(2) Contractuat Merger

The contractual mergers may be given statutory recognition in the Company Law in lndia as is the practice in many other countries as a restructuring toolto hasten the process of mergers and acquisitions. Such mergers and acquisitions are in the contract form (i.e. without the intervention of the court) and are made subject to subsequent approval of shareholders by simple majority.
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The recognition of such contractual mergers would eliminate obstructions to

mergers and acquisitions, give ex-post facto protection and the ability to rectify them.
Further, steps should be taken to validate contractual mergers because courtoriented process many times leads to delays. Even as judicial process is important to take care of the interest of minority shareholders, many times it is used as a tool to
abuse and derail the process. ln fact, "Some very well-meaning mergers and
acquisitions are taken to court by motivated shareholders with vested interests to
derailthe process". Answer to Question No. 6(b)({) Secretarial Standard on Meetings of the Board of Directors (SS-1)
The Secretarial Standard on Meetings of the Board of Directors lays down a set of principles which companies are expected to adopt in the convening and conduct of meetings of the Board of Directors and committees thereof. These principles relate to frequency of meetings, quorum, attendance, resolutions, recording and preservation of minutes etc. lllustrative lists of items to be considered at different meetings of the Board are enunciated in the Standard. Further, the Standard seeks to enhance stakeholder's confidence by focusing on the principles relating to responsibilities of the Chairman of the Board, maintenance of attendance registers, preservation of minutes, disclosures in Annual Report etc.
Secretariat Standard on Generat Meetings (SS-2)
The Secretarial Standard on General Meetings prescribes a set of principles

which companies are expected to observe in the convening and conduct of General Meetings and matters related thereto. Principles have been laid down with respect to poll, withdrawal/ quorum, voting, proxies, conduct requirements rescinding/modification of resolutions, adjournment of meetings, recording in and preservation of minutes as well as the duties of the Chairman and the disclosures to be made in the Annual Reports of companies. Further, explicit principles have been laid down on the related critical aspects such as distribution of gifts, presence and duties of Company Secretary/Auditors in the meetings, preservation of minutes. Besides, it intends to integrate and standardize the diverse secretarial practices prevalent in the corporate sector for conducting General meetings.
of
of
Answer to Question No. 6(b)(2)

WHAT IS A CHARGE?
A charge is a right created by any person including a company referred to as "the borrowed' on its assets and properties, present and future, in favour of a financial institution or a bank, referred to as "the lended', which has agreed to extend financial assistance.
Section 124
of the Companies Act,
1956 states that "charge" includes
"mortgage". However, this definition is not adequate to know the exact nature of a charge. The precise meaning of the expression "charge" has to be derived from judicial pronouncements.
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"Charge" as defined in Transfer of Property Act, 1882 According

immovable property of one person is by act of parties or operation of law made security for the payment of money to another and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property, and all the provisions which apply to a simple mortgage shall, so far as may be, apply to such
charge.
to Section 100 of the Transfer of Property Act, 1882, where an
WHAT IS A MORTGAGE?
A mortgage is a legal process whereby a person,'who boirows money from another person and secures the repayment of the borrowed money and also the payment of intbrest at the agreed rate, by creating a right or charge in favour of the lender on his movable and/or immovable property.
Mortgage as defined in Transfer of Property Act, 1882 According to Section 58 of the Transfer of Property Act, a mortgage is the transfer gf an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to pecuniary liability.
CHARGE AND MORTGAGE DISTINGUISHED There is a clear distinction between a mortgage and a charge, the former being a transfer of an interest in immoveable property as a security for the loan whereas the latter is not a transfer, though it is nonetheless a security for the payment of an
amount.
TEST PAPER 3I2O1O (coMPULSORY) (Based on ALL Study Lessons)

Time allowed:
3 hours
Maximum marks: 100
NOTE: Attempt ALL guesfions.
Question No.
Draft the following:
(i)
(ii)
a public company.
Special Resolution for Altering Artictes of a private company converting it into
Resolution for conversion of shares into stock.
(iii) Board resolution allofting shares for a consideration otherwise than in cash. (iv) A notice under secfrbn 6408 for the Central Government's approval to
increase remuneration of the managing
director.
(5 marks each)
Answer to Question No. 1(i)

SPECIMEN OF THE SPECIAL RESOLUTION FOR ALTERING ARTICLES OF A PRIVATE COMPANY CONVERTING IT INTO A PUBLIC COMPANV
"RESOLVED THAT pursuant to the Section 44 and other applicable provisions of the companies Act, 1956, if any, the consent of the company be and is here by accorded to change the status of the Company form Private Limited to Public Limited
by conversion.
RESOLVED FURTHER THAT consequent to conversion to Public Limited Company and pursuant to Section 21 and all other applicable provisions, if any, of the Companies Act, 1956, the name the iompany changed from Private Limited to ......
of
be
RESOLVED FURTHER THAT pursuant to Section 16 of the Companies Act, 1956 and other applicable provisions, if any, the existing Clause I of the Memorandum of Association of the Company relating to Name of the Company be and is hereby altered
by deleting the same and substituting tne foltowing new Ciause l:
l.
The name of the Cpmpany is
... name ...
Limited.
RESOLVED FURTHER THAT the ...... private Limited wherever it occurs in the Memorandum and Articles of Association of the Company be substituted by the name ... Limited. RESOLVED FURHTER THAT the Board of Directors of the Company be and is lereby authorised to make an application for change the status of the Company into P.ublic Limited Company and also for changing the name of the Company including filing of Statement in lieu of Prospectus as per Schedule lV of the Companies Aci, 1956, with Registrar of companies and to do all such necessary acts, deeds and things-and to sign all such papers and documents as they may deem necessary to give effect to this resolution.
29
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Answer to Question No. 1(ii) . ,,RESOLVED THAT in accordance with the provisions of Section 97 and all other applicable provisions, if any, of the Companies Act, 1956 (including any amendments, modifications thereof) the consent of the members be and is hereby accorded for conversion of 1,00,000 equity shares of Rs. 10 each into stock of Rs.
10,00,000.
RESOLVED FURTHER THAT pursuant to Section 16 of the Companies Act, 1956 and other applicable provisions, if any, the existing Clause V of the Memorandum of Association of the Company relating to Share Capital be and is
hereby altered accordingly.
RESOLVED FURTHER THAT the Board or any person authorized by the Board
be and are hereby severally authorized to do all such acts, deeds, matters and things
whatsoever as may be required to give effect to this resolution."
Answer to Question No. 1(iii)
SPECIMEN
OF BOARD RESOLUTION
ALLOTTING SHARES FOR
.A
CONSIDERATION OTHERWISE THAN IN CASH "RESOLVED THAT in terms of the agreement dated ......., 20.... entered into by and between the company and Shri..................... for the issue of..........fully paid equity shares of Rs...... each of the company for Rs........., which is not paid in cash
but in full satisfaction of the amount which the company owed to the
company's manufacturing unit, details whereof have been incorporated agreement, be and are hereby allotted to the said Shri......."'.........'.............'.;
said
shri.......,......... as purchase price of the piece of land situated at..................;.. sold by the said Shri............. to the company for the purpose of constructing the
in
the
RESOLVED FURTHER THAT the Company Secretary, Shri ..............'.., be and is hereby authorized to file with the Registrar of Companies, the Return of Allotment
of the shares in e-form
Government's) General Rules and Forms (Amendment) Rules, 2006, along with a certified copy of the said agreement, in accordance with Section 75(1Xb) of ihe Companies Act, 1956 and the prescribed filing fee, within thirty days of the passing of
this resolution; and
and
3 as prescribed in the Companies
(Central
REEOLVED FURTHER THAT the Company Secretary, Shri ..........'......, be and is hereby authorized to issue share certificate(s) for the allotted ................ fully paid equity shares be issued to the allottee(s) in accordance with Section 113 of the C6mb.anies Act, 1956 and the Companies (lssue of Share Certificates) Rules, 1960 Managing Director, Shri......'...'.".'., Director under the signatures of
and
company, which shall be affixed in the presence of all the authorised signato;ies."
Shri...
Shri...
Company Secretary, under the common seal
of
the
Answer to Question No. 1(iv) Notice under Section 6408 for Central Government's Approval to lncrease Managing Director's Remuneration
.Limited Notice is hereby given pursuant to Section 6408 of the Companies Act, 1956 (the
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Act) that the company intends to make an application to the Central Government for its approval under Section 310 of the Act to the increase in the remuneration payable to Shri..,........rr....i.i.i, Managing director of the Company.
Registered Office: For........,...........1imited Secretary
Dated.
Question No.2
(a)
Choose the most appropriate answer from the given option

following:
in
respect
of the
(i)
The instrument appointing a proxy
shatt
be
in:
(a) Oral (b) Writing (c) Non-judicial stamp (d) Noneoftheabove.
paper
'
(ii)
(a) (b) (c) (d)

(iii)
Companies aie required to file compliance certificate with the Registrar : Within 30 days Within 45 days Within 60 days
Within 15 days. A company can remove a director before the expiry of the period
office by passrng a
of
his
(a)
(b)
Specialresolution Ordinary resolution

Resolution by special notice
(c)
(d) Board Resolution. (iv) Which section of Companies Act, 1956
defines Company Secretary in Practice: @) 2U5) (b) 2(454) (c) 2(54) (d) 2(60) (v) The auditor of a Government Company shall be appointed or reappointed by the : (a) CentralGovernment
.
(vi)
(b) State Government (c) Comptroller and Auditor Generalof (d) None of the above
To borrow moneys otherwise
lndia
on debentures can be exercised only at:
(a) (b)
Board meeting Generalmeeting
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T.P-3t2010
(c)
(d)
(b)
(i)
Either at Board meeting or at General Meeting Resolution by circulation.
(1 mark each)
Every user who is required to sign an e-form for submr.ssion with MCA is required to obtain a.
are the persons who conceive the idea or visualize a project and then fake steps to execute the idea into a reatity.
(ii)
(iii) Secfion 143 of the Act tays down that every company shatt keep registered office a
(iv) Only fully paid-up shares can be convefted into (v) The declaration (v0
at
its
of bonus
r'ssue in tieu
of-
is not permitted.
Secfion-
of the Companies Act, 1956 provides for Cost Audit.
(c)
Write a short-note on resignation by Managing
Director. " 'i':;::::,
(i) (b) Writing (ii) (a) Within 30 days (iii) (bi Ordinary resolution
(iv) (b) 2(45A) (v) (a) CentralGovernment (vi) (a) Board meeting
(i) Digital Signature Certificate (ii) Promoters
liiii
n"sirt"r of Charses
(iv) Stock (v) Dividend (vi) 2338

Answer to Question No. 2(c) Resignation by Managing Director
A managing director is entrusted with substantial powers of management. lf he resigns his office as managing director before the expiry of the contract period his resignation as managing director becomes effective only when it is accepted by the company. His .resignation is governed by terms and conditions of his appointment. Otherwise he may be liable'to compensate the company for breach of service contract. However, a managing director may resign his office as managing director and may continue to be a non-executive or part-time director on the Board. of
directors of the company.
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Question No.3
(a) Distinguish between the following:
(i) Managing Director and Whole-time Director (ii) Voidable Allotment and Void Altotment.
(b)
incorrect:
(i)
objects.
(3 marks each) State, with reasons in brief, whether the following sfafemenfs are correct or
-
resolution, alter the provisions
Section 17 of the Act lays down that a company may, by ordinary of its memorandum with respecfs fo rfs
(ii) The
(iii)
articles
of
assocrafrb
n of a company contain provision
and
authorizing the company to consolidafe lfs shares A share warrant is transferred by a mere delivery of the warrants without execution of any written instrument of transfer being registered by the
Company. The increase in number of directors beyond twelve needs prior approval by way of special resolution and authority by the Afticles of Association. A public company rfiay appoint a person as its Managing Director, if he is (2 marks each) managing director of only two other companies.
(iv) (v)
Answer to Question No. 3 (a)(i)
Distinction between Managing Director and Whole Time Director

The term 'Whole time director' has been used in the Act alongwith Managing Director. However, unlike 'Managing director', 'whole time directof has not been defined. One may ihfer that the expression 'whole time director' has been used in the Act to suggest a director who is in the whole time employment of the company but does not enjoy the substantial powers of management. Besides, a managing director may be appointed in that capacity in two or more companies at the same time but a whole time director cannot act as such in more than one company. Further, there is no restriction in terms of the tenure of appointment of a whole time director. However, a managing director cannot be appointed for more than five years at a time in case of
public Company.
Answer to Question No. 3 (aXii)
Distinction between Voidable Allotment and Void Allotment

Voidable Allotment According to Section 71 of the Companies Act, 1956, an allotment made by a company to an applicant in contravention of the provisions of Section 69, which prohibits allotment unless minimum subscription has been received by the company or in contravention of the provisions of Section 70, which prohibits allotment in certain cases unless statement in lieu of prospectus has been delivered to the Registrar, is irregulai allotment and shall be voidable at the instance of the applicant(a) within two months after the holding of the statutory meeting of the company, and not later, or (b) in any case where the company is not required to hold a statutory meeting or
'
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where the allotment is made after holding of the statutory meeting, within two months after the date of the allotment, and not later. . The allotment shall be voidable, notwithstanding that the company is in course of
being wound-up.
Void Allotment and its Effects

According to Sub-section (1A) of Section 73, where a prospectus states that an application has been made for permission for the shares or debentures offered thereby to be dealt in one or more designated stock exchanges, such prospebtus shall state the name(s) of the stock exchange(s) and any allotment made on an application in pursuance of such prospectus shall, whenever made, be void if the permission has not been granted by the stock exchange or each such stock exchange, as the case may be, before the expiry of ten weeks from the'date of the closing of the subscription list.
Answer.to Question No. 3(b) (i) Fatse. A company may change its objects as enshrined in its memorandum of .association in accordance with the provisions of Sections 17, 1B and 19 and any other applicable provision"s, if any, of the Companies Abt, 1956. Section 17 of the Act lays down that a company may, by special resolution, alter the provisions of its memorandum with respect to its objects.
articles, alter, by an ordinary resolution, its share capital. lt may consolidate and divide, all or any of its existing shares into a larger denomination than of its existing shares e.9., by consolidating ten shares of Rs. 10 each into one share of Rs. 100
each.
(ii) True. Section 94 of the Companies Act, 1956 provides that a company limited by shares or guarantee and having a share capital may, if so authorised by its
(iii) True. A share warrant is transferable by mere delivery of the warrants without execution of any written instrument of transfer being registered by the company. The bearer of a share warrant is not a member of the company unless
otherwise so provided in the articles of the company in terms of Section 115(5) of the Act and, therefore, such a bearer of share warrants does not impliedly required to observe the provision of the company's memorandum and articles.
(iv) False. As per section 258 and 259 of the Companies Act, 1956, any increase in number of directors beyond twelve directors needs prior approval of the Central Government and authority by the Articles of Association.
(v) False; Under Section 316 of the Act, a public company can not appoint or employ any person as managing director, if he/she is either the managing director or the manager of any other company.
Question No.4
(a) Draft a resolution approving commencement of newbusrness. (4 marks) (b) Discuss the procedure for hotding subseque nt Board meetings. (4 marks) (c) What type of information shall be mandatorily reviewed by the Audit
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35
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(4 marks)
(d)
Enumerate the scope and functions of the SecretarialSfandards Board. G marks)
Answer to euestion No.
4(d)
SPECIMEN OF BOARD RESOLUTION PROPOSING COMMENCEMENT OF NEW BUSINESS SPECIFIED IN OTHER OBJECTS
"RESOLVED that, subject to the approval of the Company. in general meeting by special resolution and in accordance with provisions of section 149(2A) of the Companies Act 1956, the approval .of Board of Directors is accorded to the Company to commence a new business mentioned in Para 16 of Sub Clause (c) of Clause (lll) of the Memorandum Of Association of the Company. RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to take all the necessary steps required to give effect to the same."

PROCEDURE FOR HOLDING SUBSEQUENT BOARD MEETINGS
' -
Consult the company's Articles of Association to see who can issue notice for convening a Board meeting The Secretary or any other person so authorised shall issue notice in writing to every director of the company for the time being in lndia and at his usual address in lndia in case of every other director (Section 286).
The day of the meeting should not, unless the Articles of Association
otherwise provide, be a public holiday It is not obligatory to give agenda in the notice, but it is a good secretarial practice to enclose the agenda to the notice of the meeting. At least half an hour before lhe meeting, the persons responsible for conducting the meeting should place the folders containing Agenda, notes to
Agenda, draft minutes to agenda, statement of expenses incurred/to be incurred etc. for ready reference of all directors to enable them to deliberate and discuss on each item of the agenda in detail. Before holding the meeting, welcome the directors and obtain their signatures on the Attendance Register. lf quorum, as required under Section 287; is present, declare the meeting in order and inform the names of the directors who sought leave of absence from attending the meeting. The directors who are present at the meeting may elect one of them as the Chairman of the meeting and request him to take the Chair. Help the Chairman to conduct the meeting as per the agenda. lf any director wants to place any other item for the discussion at the meeting, then such item may be taken up with the permission of the
- S::ll:il" date, time and prace of the next Board meetins.
After the meeting iS over, prepare draft minutes of the meeting, get it
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. -
reviewed by the chairman of the meeting and/or the Managing Director of the
company.
Send copy of diaft minutes of the meeting to each of the directors of the
company for information and comments.
Contact and collect draft minutes from each of the directors with their comments. After that, in consultation with the Chairman/Managing Director finalise the minutes and enter them into tfre Minutes Book. All pages should be consecutively numbered. Such final minutes may be signed and dated by the Chairman of the meeting or by the Chairman of the succeeding meeting. All pages of the minutes are to be initialled and the last page of the minutes is to be signed and dated by the Chairman.

Review of information by Audit Gommittee
The Audit Committee shall mandatorily review the following information:
1.
Management discussion and analysis of financial condition and results of

operations;
2. Statement
of signifiiant related party transactions (as defined by the audit committee), submitted by management;
internal control weaknesses issued by the
statutory auditors;
3. Management letters/letters of
4. lnternalaudit reports relating to internal controlweaknesses; and 5. The-appointment, removal and terms of remuneration of the Chief internal
auditor shall be subject to review by the Audit Committee.

SCOPE AND FUNCTIONS OF THE SECRETARIAL STANDARDS BOARD
The scope of SSB is to identify the areas in which Secretarial Standards need to be issued by lnstitute of Company Secretaries of lndia (lCSl) and to formulate such Standards, taking into consideration the applicable laws, business environment and best secretarial practices. SSB also clarifies issues arising out of such Standards and issues guidance notes for the benefitof members of lCSl, corporate and other users. The main functions of SSB are: (i) Formulating Secretarial Standards;
(ii) Clarifying issues arising out of the Secretarial Standards; (iii) lssuing Guidance Notes; and (iv) Reviewing and updating the Secretarial Standards/Guidance Notes
periodic. intervals.
at
Question No.5
(a)
Define the procedure for preparing abidged Balance Sheef and Profit & Loss (B marks) Account by a Listed Company.
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(b) Enumerate the procedure for declaration of Dividend out of

Reserves.

PROCEDURE FOR PREPARING ABRIDGED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT BY A LISTED COMPANY
(a) (b)
Convene a Board rneeting after giving a notice in writing to all the directors of the company as per Section 286 of the Act. Hold Board meeting and pass a res.olution for preparing annual Reports and Accounts of the company also in the abridged form as permitted under Section 21g(lXbXiv) of the Act in accordance, with Rute 7A d the Companies (Central Govemment's) General Rules and Forms, 1956 in the precribed form No. 23AB for the purpose audited annual accounts of the company, the Annual Reports and Accounts prepared in abridged form should. also be apprwed and authenticated in accordance wifh the provisions of Section 215 of the Act.
(c) At the Board Meeting while discussing, considering and approving draft
(O A conplele set of full annual reports aRd accounts should be kept

(e)
for inspection at the Registered Office of the company at least twenty one days during working hours before the date of ensuring.annual general meeting. On a demand from a member, debentureholder sr depositor of the company
a copy of the full

demand.
annual report and accounts shall be sent
to
such
requisitionist, free of cost, within seven days from the date of making such
(f)
Three certified true copies of the abridged annual reports and accounts are also required to be filed with the concerned Registrar of Companies along with true certified copies of full annual. reports and accounts and with single filing fee pursuant to Section 220 of the Act. Under MCA2I e-filing system, only single copy of balance-sheet alongwith e-form 23AC and single copy of profit and loss account alongwiffr e-form 23ACA are required to be filed, as two separate documents;
I
tJ
(g) Pursuant to clause 32 of the listing agreement, a lisled company will have to 'supply a copy of the complete and full Balance Sheet, Profit and Loss
Accsunt and the Directors' Report to each shareholder and upon application to any member of the Exchange. But, the Company may supply a single copy of these documents to shareholder's residing in one household. However, on
receipt
of request, the
company shall supply such documents
to
any
shareholder residing in such household.
Angver to Question No. 5(b)

Procedure for Declaration of Dividend oul of Company's Reserues
A company which wishes to declare dividend out of reserves in any year must fulfill the following conditions in accordance with the Cornpanies (Declaration of
Dividend out of Reserves) Rules, 1975:
(a) The rate of dividend to be declared must
not be more than the average of the
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rates at which dividend was declared in the five years immediately preceding the year in which the company proposes to declare dividend out of reseryes or 1oo/o of the paid-up share capital, Whichever is less [Rule 2(i)];
(b)
The amount to be drawn from the reserves must not be more than an amount equal to 10% of the aggregate of paid-up share capital and free reserves
[Rule 2(ii)];
(c) lf in the year for which the company proposes to declare dividend out of the
reserves, it has incurred a loss, the amount drawn from the reserves must first be utilised to set off the loss before any dividend is declared for that year on equity shares or preference shares [Rule 2(ii)];
(d) The amount of residual reserves, i.e. the reserves remaining in balance after
the amount sufficient to set off the loss and declaration of dividend, must be at least 15% of the paid-up share capital of the company [Rule 2(iii)]. The procedure is as follows:
(1) Give riotice as per Section 286 of the Companies Act, 1956 to all the
decision
directors of the cornpany for holding a Board meeting. ln the meeting, take to declare dividend out of company's reseryes because of inadequacy or absence of profits and also fix the date, time and place of the
Annual General Meeting. Authorize the Company Secretary
or
any
competent person if company does not have a company secretary to issue the notice of the AGM on behalf of the Board of directors of the company to all the members, directors and auditors of the company and other persons entitled to receive the same.
(2) (3)
Ensure that the Companies (Declaration of Dividend out of Reserves) Rules, 1975 are complied with.
Ensure that while computing the amount of profits, the amount transferred from the Development Rebate Reserve is included and all items of capital reserves including reserves created by revaluation of assets are excluded. inform the Stock Exchange with which the shares of the company are listed within 15 minutes of closure of Board meeting about decision to recommend declaration of dividend out of Company's Reserves. [Clause 20 of listing agreement]
(4) ln the case of listed companies,
(5) lssue notices in writing at least 21 days before the date of the Annual
General Meeting and hold the meeting and pass the necessary resolution.
(6) (7)
ln the case of listed companies, forward three copies of the notice and a copy of the proceeding of the general meeting to the Stock Exchange.
Open a bank account for making dividend payment and credit the said bank account with the total amount of dividend payable within five days of declaration of dividend.
dividend.
(8) lssue dividend warrants within 30 days from the date of declaration
,'
of
Question No.6
(a)
Describe the various mode
of
payment
of
fees
under the MCA-21Sysfem.
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(8 marks)
(b)
Dr'scass the fotlowing keeping in view the provisions of IJK Companies Act, 2006.
(i)
(ii)
Treasury Sfiares A Company's Financial Year.
(4 marks each)

MODE OF PAYMENT OF FEES UNDER THE MCA-21 SYSTEM
MCA-21 system provides for the facility of payment of statutory fees through multiple modes i.e. (i) OffJine payment through a challan generated by the system and payment of fees at the counter of the notified bank branches through DDs/ Cash; (ii) on-line payments through lnternet Banking and Credit Cards [Master Card/ vrsAl.
OffJine method of payment of fees ln case a, stakeholder chooses to pay through the offJine method (i.e. over the counter in a bank branch), it normally takes about two to three days for the bank to intimate the realisation of payment to the MCA-21 system and the transaction gets passed on to the back office for processing only after payment is recognised by the banking system. On the other hand, the on-line payment through lnternet banking/
Credit Card is instant.
Online method of payment of'fees

Electronic payments through lnternet can be made either by credit card or by lnternet banking facility.
Credit Card Paymenf Process
t.
The credit card payment process is as follows:
if
1 ..,,
(a) The user selects credit card option for payment; (b) MCA-2I system provides SRN and amount to third party (payment gateway); (c) User is re-directed to third party providing internet payment gateway
services. The user enters card information (card number, expiry date, etc.) as requbsted by the payment gateway server to process the payment;
(d) On success,
.
(e)
following payment authorization information is provided by the payment gateway - SRN, date and time of transaction, amount paid, Authorization/Reference lD (generated by payment gateway), Credit Authorization reference (VISA, MASTERCARD, etc.); The payment status is updated as "Paid" for the correspbnding SRN;
(f)
ln case of failure in payment (due to incorrect card number, card expiration, etc.), user is displayed the error page with appropriate error message (if received from payment gateway) along with payment options to restart the
payment process.
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lnternet Banking Paymenf Process Payments shall be made through lnternet banking facility provided by designated banks namely, HDFC Bank, lClCl Bank, lndian Bank, Punjab National Bank and State Bank of lndia. The lnternet banking payment process is as follows:
(1)
MCA-21 system redirects the userto the bank's lnternet banking portal URL (as provided by the banking portal beforehand) and passes the necessary information such as SRN and amount; information for
bank's
(2) User interacts with the bank portal and provides relevant
payment processing;
(3) After the payment processing is done, the response is sent by the
lnternet banking portal to MCA portal;
(4)
On success, following payment authorization information is provided by bank

portal:
(i) sRN; (ii) Date & time of transaction;

(iii) Amount paid; (iv) Authorization/Reference lD generated by bank's portal; (v) Credit Authorization reference (VISA, MASTERCARD, etc.) (5) SRN, date and time of transaction, Amount paid and Authorization/ Reference lD (generated by bank's portal) MCA portal. Payment authorization information as received is Updated in the database and the payment status is updated as "Paid" for the corresponding SRN lnternet
banking serviee is not prgvided by some of the banks 24 hours, and 7 days in a week. ln case the user opts for lnternet banking option for payment, when the service is not online, request for payment will be accepted by the bank portalto be processed offline.
Answer to Question No. 6(bXi) Treasury Shares (Section 724)

Where qualifying shares are purchased by a company out of distributable profits, the company may (a) hold shares (or any of them) or (b) deal with any of them, at any
time, in accordance with the prescribed procedure for disposal and cancellation of treasury shares. When shares are held under (a).above then the company must be entered in the register as the member holding those shares. For the purpose of the Act, references to a company holding shares as treasury shares are references to the company holding shares which (a) were (or are treated as having been) purchased by it in circumstances in which this section applies, and (b) have been held by the company continuously since they were so purchased.
Where a company has shares of only one class, the aggregate nominal value of shares held as treasury shares must not at any time exceed 10 per cent of the nominal value of the issued share capital of the company at that time.
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Answer to Question No. 6(b)(ii)

A company's financiatyear (Section 390)
A company's financia! year is determined as follows.
Its first financial
(a) (b)
!ear1
begins with the,first day of iis first accounting reference period, and ends with the last day of that period or such other date, not more than seven days before or after the end of that period, as the directors may determine.
Subsequent financial
years-
(a) (b)
begin with the day immediately following the end of the company's previous financial year, and end with the last day of its next accounting reference period or such other date, not more than seven days before or after the end of that period, as the
d
irectors may determine.
ln relation to an undertaking that is not a company, references in this Act to its "profit financial year are to any periodin respect of which a and loss account of tn" undertaking is required to be made up (by its constitution or by the law under which it is established), whether that period is a year or not.
a parent company must secure that, except where in their there are good reasons against it, the financial year of each of its subsidiary opinion undertakings coincides with the company's own financial year.
The directors of
TEST PAPER 4/2010
Time allowed: 3
hoturs
(coMPULSORv) (Based on ALL StudY Lessons)

Maximum marks: 100
NOTE: Attempl ALLguesfions. Question No.1

Draft the following:
(i) General Notice of the
Oompany becoming
Private company and
consequent change of name of the Company.
(ii)
Resolution
to be passed at a general meeting of
a listetd company for

(5 marks each)
approval to bonus shares.
(iii) Board Resolution approving sate of faffelfed shares. (iv) Board Resolution for shifting the Regisfered Office.
Answer to Question No. 1(i)
SPECIMEN OF dENERAL NOTICE OF THE COMPANY BECOMING A PRMATE COMPANY AND CONSEQUENT CHANGE OF NAME OF THE COMPANY
NameoftheCompany(new).'..
..'.'.....'.''.'
PUBLIC NOTICE
All concerned are hereby informed that the name of the Company has changed from "........
day
been
from ,.............. as per FRESF1 CERTIFICATE OF INCORPORATION CONSEQUENT uPoN QHANGE OF NAME issued by the Registrar of companies, ................. on the
of
20........
The registered office of the company continues to be situated at.

Place:
Date: ................. NOT TO BE PUBLISHED daily
For publication in the ....:.....:., Hindi Daily, , and
for........ Limited
Company Secretary
42
I
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Answer to Question No. 1(ii)

SPECIMEN RESOLUTION TO BE PASSED AT A GENERAL MEETING OF A LISTED COMPANY FOR APPROVAL TO BONUS ISSUE
'RESOLVED THAT Subject to the guidelines issued by the Securities and

Exchange Board of lndia and subject to the Foreign Exchange Management Act, 1999 for allotment and issue of new equity shares to the non-resident members and subject to the consents of financial institutions, as may be applicable, and also subject to such terms, conditions, alterations, modifications, changes and variations as may be specified while according such approval which the Board of Directors of the company ("the Board"), is authorised to accept, if it thinks fit, the Company approves capitalizing the entire amount standing to the credit of General Reserve and,..... Reserve and part of the amount standing to the credit of Share Premium Account in the books of the company as on..... for an aggregate amount of Rs. ..... and such sum be set free for distribution among the holders of existing fully paid equity shares of Rs. 10 each of the company, whose names will appear in the register of members of the company on a date to be decided by the Board in that behalf as Record Date, as an increase of the amount of share capital of the company held by each such member and not as income or in lieu of dividend credited as....... fully paid-up equity shares as bonus shares in the proportion of... new equity shares for every.... existing fully paid equity shares held, subject to the following terms and
conditions:
(a) The new equity shares to be allotted as (b)
bonus shares will be allotted subject to the terms of the Memorandum and Articles of Association of the company; The new equit! shares shall rank pari passu in all respects with and carry the
same rights as the existing fully paid-up equity shares of the company and notwithstanding the date or dates of allotment thereof shall be entitled to participate in full in any dividend to be declared in respect of the financial
year in which the allotment of the new equity shares pursuant to this
Resolution is made;
(c) No letter
of allotment will be issued by the company in respect of the new equity shares. However, the equity share certificates in respect thereof will be ready for delivery to the allottees within 3 months from the date of allotment
thereof;
(d)
company shall not issue any certificate or coupon in respect of such fractional shares but the total number of such new equity shares representing such fractlons shall be allotted by the Board to a nominee to be selected by the Board who would hold them as trustee for the equity shareholders who would have been entitled to such fractions, in case the same were issued. Such nominee will as soon as possible sell such equity shares allotted to him at the prevailing market rate and the net sale proceeds of such shares after adjusting the cost and expenses in respect thereof be distributed among such members who are entitled to such fractions in the proportion of their respective holding and allotment of fractions thereof; and (e) No allotment of bonus shares or distributiorl, of proceeds in respect of fractions to the non-resident lndian membersi unless the provisions of the
lf as a result of implementation of this resolution, any member becomes entitled to a fraction of new equity shares to be allotted as bonus shares the
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Foreign Exchange Management Act, 1999 have been complied by the

company.
RSOLVED FURTHER THAT the Board of Directors of the TThe Company be and are herby authorized to do all such acts, matters and things whatsoever including settling any question, doubt or difficulty that may arise with regard to or in relation to the issue or allotment of the bonus shares and to accept on behalf of the company any conditions, modifications relating to the issue of bonus shares prescribed by the Reserve Bank of lndia or any cther authority and which the Board in its discretion thinks fit and propei'.
Answer to Question No. l(iii) SPECIMEN

SHARES
OF BOARD RESOLUTION APPROVING SALE OF
FORFEITED
'RESOLVED THAT ........ equity shares of Rs......... each bearing Distinctive Nos......... to ........., both inclusive, previously registered in the name of Shri.............. and forfeited on............... as per declaration duly signed by Company Secretary
placed on the table, be and are hereby sold to Shri................ for Rs.............per share and that, upon payment of that sum, a equity share certificate of equity shares
with Rs....:. Shri............ accordingly."

credited
Answer to Question No. 1(iv)
paid-up per share
be
issued
to the said
SPECIMEN OF BOARD RESOLUTION FOR SHIFTING THE REGISTERED OFFICE
"RESOLVED THAT subject to the provisions of section 17, 146(2) of Companies Act, 1956 and other provisions as applicable, if any, and subject to approval of members of the Company by Special Resolution and subject to cohfirmation of the Company Law Board/Central Government, the consent of Board of directors of the Company be and is hereby accorded for shifting of registered office of the company ........ .............:..
FUTHER RESOLVED
to THAT the Clause No. ll of the Memorandum
from
the the the the the
of
Association of the Company be and is hereby substituted by the following:
ll. The Registered Office of the Company shall be situated in the State of
I
FURTHER RESOLVED THAT the notice of the Extraordinary General Meeting alongwith the Explanatory Statement as placed before the Board duly initialed by the Chairman for the purpose of identification be and is hereby approved and the directors of the Company be and are hereby authorized to issue the notice to the members and are alqo.further authorized to do any act or deed or to appoint any other person to give effect to this mattef.
I j
i
i i
FURTHER RESOLVED THAT
sign the petition, application, atfidavits and such other documents as may bej
necessary in relation to the said petition.
Directors of the Company be and are hereby jointly and
Mr.
and Mr. / or severally
authqrized toi
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FURTHER RESOLVED THAT Mr. ... .....,, Practising Company Secretary, be and is hereby authorized to appear and represent the Company before the Company Law Board/Central Government in the matter of the petition to be filed with
Company Law Board/Central Government for its .confirmation to the proposed alteration of the situation Clause of the Memorandum of Association and also authorized to make such statements, furnish such information and do such things as may be necessary in relation to the said petition.
FURTHER RESOLVED THAT pursuant to the provisions of Regulation 18(3) of the Company Law Board Regulation, 1991 and other applicable provisions of the Companies Act, 1956, Mr. ... ., Company Secretary in Whole Time Practice, be and is hereby authorised to enter appearance before the Company Law
shifting
Board and to represent the Company with respect to every matter connected with the the Registered Office the Company to
of
of
from
FURTHER RESOLVED THAT Mr.
represent and act'on behalf of the Company and deeds etc., if necessary, for the aforesaid purpose."
...
.., is further authorised to to sign all documents, papers,
Question No.2
(a)
Choose the appropriate answer from the given options

following:
in
respect
of
the
The Central Government has the power to order a speciat audit of accounts of a company in the circumsfances mentioned in Sub-section (1) of section (ii) A member of the lnstitute of Company Secretaries of lndia may
(i)
prefix_to
his name
(iii) A manager appointed by the Board of Directors of a Company may be
(iv)
removed by Secfion 58A (ii) permits a depositor to make a in respect of hr.s deposifs (v) of the Companies Act, 1956 defines debentures. (vi) holding a vatid certificate of registration is required to be (1 mark each) appointed to manage fhe rssue.
the_.
Secfion A
(b) Re-write the following

a p prop
sentences after filling
in the blanks spaces
with
ri ate word (s)fiig u re(s) :
(i)
(ii)
Application to the Central Government for exemption from attaching the accounts of subsidiary Companies shall be in e-form
Under e-filing sysfem of MCA, Companies are required to file Compliance Certificate on4ine with the Registrar of Companies
within_days.'
(iii) Application moneys received by companies for allotment of any securities and due for refunds are transferred to (iv) Secretarial standard (SS-3) relates to. (v) Seclion 124 of the Companies Act, 1956 sfafes that "charge" includes
-l I
t'
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An
is a notified document in electronic format for filing with

(1 mark each)
MCA authorities through the
(c)
Enumerate the charges reglsfrab le under the Companies Act, 1956.

(4 marks)
Answer to euestion No.
2(a)
(i) 233A (ii) cs (iii) Board

(iv) An application [Note: ln the question, after section 58A, (ii) has
been
(vl
(vi)
mistakenly inserted. Error is regretted.l 2 (12) Merchant banker
Answerto Question No. 2(b)
(i) 23AAB (ii) Thirty (iii) lnvestor Education and Protection (iv) Dividend
(v) A mortgage (vi) E-form
Fund
Sub-section (4) of Section 125 of the Companies Act, 1956 lays down thatthe following nine types of charges are registrable under this section:
1.
a charge for the purpose of securing any issue of debentures;
2. a floating charge on the

including stock in trade;
undertaking
or any property of the
company
3. a charge on uncalled share capital; 4. a charge on calls made but not paid; 5. a char:ge on any immovable property,
therein;
wherever situated, or any interest
6. a charge on a ship or any share in a ship; 7. acharge on any book debt ofthe company; 8. a charge on goodwill, on a patent or a licence
9.
under
a patent, on a trade
mark or on a copyright or a licence under a copyright; and a charge, not being a pledge; on any movable property of the company.
The scope of Section 125 depends on many factors, e.g., whether the rights acquired by a charge-holder in the assets or properties of the company constitutes a charge and if it does constitute a charge, is it one of the charges enumerated in the
section and,whether the right in the assets of the company was created by the
company.
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Question No.3
(a)
Give satient features of the fotlowing forms (i) Form 23 (ii) Form 18 (iii) Form 32
(3 marks each)
(b)
What are the particulars which are required to be filed with the Registrar of (7 marks) Companies?

(i) E-Form 23
Registration of resolution(s) and agreement(s) This form is required to be filed pursuant to section 192 of the Companies Act, 1956. The important particulars required to be filled in the form are: identity number (ClN) of company. - Corporatethe company, address of the registered office of the company & Name of - e-mail lD of the company. Date of dispatch of notice for passing of resolutions(s)/postal ballot
-The
resolution(s). Date of passing of resolutions / postal ballol resolution (s). Number of resolution(s) for which the form is being filed.
Details of the resolution i.e. section of the Companies Act, 1956 under which passed, purpose of passing the resolution and subject matter of
the resolution.
ln case of alteration in object clause, whether there is any change in the industrial activity of the company. lf the answer is yes, please provide the main division of new industrial activity of the company. ln case of voluntary winding up under section 484, provide the details regarding Mode of winding up, Date of commencement of winding up & Number of liquidato(s).
Details of the agreement i.e. date of the agreement, section of the

Companies Act, 1956 under which agreement made, purpose of entering into the agreement & subject matter of the agreement. Service request numbe(SRN) of Form21 (in case of alteration in object
clause)
-The
following attachments are required to be filed with form: Copy(s) of resolution(s) along with copy of explanatory statement under section 173 Altered memorandum of association Altered articles of association Copy of agreement Optional attachment(s) - if any. form should be digitally signed by director or Managing Director or manager
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or liquidator or secretary of the company.
-The accountant (in whole-time '

practice).
form is pre certified by Chartered accountant (in whole-time practice) or Cost practice) or Company secretary (in whole-time
(ii) E-Form 18
of situation of registered office This form is required to be filed pursuant to section 146 of the Companies Act, 1956.
The important particulars required to be filled in the form are: Form 1A reference number (Service request number (SRN) of (Form 14) or corporate identity number (ClN) of company, Nameof the company & address of the registerid office of the company. Name of office of existing Registrar of Companies (ROC).
- Notice of situation or change
: -
Purpose of the forrn. Name of office of proposed ROC or new ROC.
The full address of the police station under whose jurisdiction the
registered office of the company is situated.
Date of order of company law board (CLS) or any other competent

Authority.
The following attachments are required to be filed with form Optional attachment(s) - if any
The form should be digitally signed by Managing Director or director or

manager or secretary of the company.
The form is precertified by Chartered accountant (in whole-time practice) or Cost accountant (in whole-time practice) or Company secretary (in wholetime practice).
- Particulars of appointment of Managing Director, directors, manager and secretary and thechanges among them or consent of candidate to act as a Managing Director or director or manager or secretary of a company andlor undertaking to take and pay for qualification shares. is required to be filed pursuant to section 303(2), 2M(2) or - This form266(l Xbxiii) of the Companies Act, 1956. 266(1)(a), The important particulars required to be filled in the form are: Form 1A reference - or corporate identity number (Service request number (SRN) of Form 1A) number (ClN) of company. the - Name of lD ofcompany & address of the registered office of the company & e-mail the company. Number of Managing Director, directo(s) for which the form is being filed - Details of the Managing Director or director of the company - fatheds name, date of birth, designation, residential address etc.i.e. name,
(iii) E-Form 32
The following attachments are required to be filed with form: Evidence of payment of stamp duty where qualification shares is involved
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(This will be mandatory only if the director giving consent agrees to pay for at least one share). Consent(s) of the appointee Managing Director, director(s). Declaration regarding qualiflcation shares
Evidence of cessation
Optional attachment(s) - if anY
The form should be digitally signed by Managing director or director or

manager or secretary of the company.
The form is pre certified by Chartered accountant (in whole-time practice) or Cost accountant (in whole-time practice) or Company secretary (in wholetime practice).

The important particulars required to be filled in e-form 1 are as follows:
Name of the companY. Name of the,state in which the company is to be registered. Name of the office of the Registrar of Companies in which the company is to be registered. Capital structure of the company. Details of number of members, in case of company not having share capital. Main division of the industrial activity of the company. Particulars of Promoters. Particulars of payment of stamp duty
Note: ln the question 3(b), the words, "of e-form after the word 'particular'. Error is regretted. Question No.4
l"
should have been inserted
(a)
Write short notes on:
(i)
(ii) (b)
Resignation and removal

Corporation Act of USA.
Need
of
offices under revised modet busrness
(4 marks each) for Secretariat Standard. State with reasons in brief whether the foltowing statemenfs are correct or
incorrect:
(i)
(ii)
Government Company shatt be appointed appointed by the Comptroller and Auditor General of lndia.
The auditor of
or
re-
Every public company is required to have a minimum of two directors.
Directors and Officers liabitity lnsurance provides civit and Criminal Protection for the Directors and Officers of the Company. (iv) Pivate company may by its Article or otherwise refuse to register the (2 marks each) transfer or transmission of shares.
(iii)
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Answer to Question No. a (a)(i) Resignation and Removal of Officers

(a) An officer may resign at any time by delivering notice to the corporation. A resignation is effective when the notice is deiivered unless the notice specifies a later effective time. lf a resignation is made effective at a later time and the board or the appointing officer acce[ts the future effective time, the board or the appointing officer may fill the pending vacancy before the effective time if the board or the appointing officer provides that the successor does not take office until the effective time. .
(b) An officer may be removed at any time with or without cause by: (i) the board of director,s; (ii) the officer who appointed such officer, unless the bylaws or the board of directors provide otherwise; or (iii) any other officer if authorized by the bylaws or the board of directors.
(c) ln this section, "appointing officef'rneans the qfficer (including any successor
to that officer) who appointed the officer resigning or being removed.
Answer to Question No. a (a)(ii)

NEED FOR SECRETARIAL STANDARDS
Companies today follow diverse secretarial practices. These practices have

evolved over a period of time through varied usages and as a response to differing
business cultures.
As an illustration, the Companies Act, 1956, provides
that
companies must convene their Board Meetings by giving notice to directors in this regard. However, no minimum period for giving such Notice has been laid down and, companies are at liberty to give any or no length of notice for convening a Board Meeting. Further, there is no requirement for sending Agenda for the Meeting. Some companies specify the business to be transacted in the Notice itself, whi.le others send a separate Agenda. ln addition, some companies also send detailed Notes, explaining each item on the Agenda. While some companies send the Agenda in advance of the Meeting, others place the Agenda at the Meeting itself. Even in case of those cornpanies which send the agenda in advance, the period varies. These 'divergent practices need to be harmonised by laying down the best practices in this
regard.
A need was, therefore, felt to integrate, consolidate, harmonise and standardise all the prevalent diverse secretarial practices, so as to ensure that uniform practices are followed by the companies throughout the country. Such uniformity of practices, consistently applied, would result
governance principles.
in the establishment of
sound
corporate
Answer to Question No.4(b). (i) True. Section 6'19(2) of the Companies Act, 1956 provides that the auditors of a Government company shall be appointed or re-appointed by the Comptroller and Auditor General of lndia (CAG). ( ii) Fatse. According to section 252(1) of the Companies Act, 1956, every public company other than a public company which has become such by virtue of section 43A of the Act shall have at least three directors. (iii) False. Directors and Officers liability lnsuranoe normally indemnify in
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(iv)
respect of damages awarded against Directors or officers anQ the company reimbursement of the insured companies in case of a valid contractual obligation on their part to hold a director or officer harmless. Defense costs are also normally covered. Criminal behavior is excluded. ln other words, directors and officers liability insurance provides only civil protection for the directors and officers of the company. Criminal protection is not covered. True. By virtue of Section 3(1xiii) of the Companies Act, 1956, a private company means a company, which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed, and by its articles restricts the right to transfer its shares, if any. So, a private company may by its articles or othenrvise refuse to register the transfer or transmission of shares.
Question No.5
Shareholder living in Kolkata senf a .transfer deed for registration of transfer of shares in a company having /s regisfered office in Chennai. The share certiflcates duly endorsed in his name were not received by him even after the expiry of four months from the date of lodgment. He lodged a criminal complaint before the appropriate court dealing with economic offences at . New Delhi. Can the Court in New Delhi enteftain th,e complaint? (b) The shareholders at an annuat general meeting of a public limited company
(a) A
unanimously resolved for payment of dividend though the Board of Directors did not recommend payment of any dividend. Sfafe fhe legalposition.
(c) A company stafted fo sue the trade mark name of another company in the same family as lfs corporate name and started dealing in the products. Explain with the help of a decided case law, whether this practice can be
allowed.
(d) Whether failure to'obtain prior
permissrbn of the Central Government for removal of statutory auditor is a continuing offence. Explain with the help of a (4 marks each) recent case law.

According to section 113(1) bf tfre Companies Act, 1956, every company, unless prohibited by any provisions of law or of any order of court, tribunal or other authority, shall within two months after the application for the registration of transfer of any such
shares, deliver the certificates of all shares transferred. ln the case of a listed company under the listing agreement this period had been reduced to one month.
Further, in the case of H.V. Jaya Ram v. l0lCl Ltd., the Supreme Court held that cause of action for failure to deliver share certificate arises where the registered office of the company is situated and not in the jurisdiction of the Court located in the place where the complainant resides. Therefore, in the present case, the Court in New Delhi cannot entertain the complaint.

As per section 217 of lheCompanies Act, 1956, directors are required to mention in their report to the shareholders the amount, if any, which they recommend should
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be paid by way of dividend. Further, unless the articles provide otherwise, declaration of dividends though a prerogative of shareholders is allowed only if the directors so
recommend.

It was held in the case of Atlas Cycles (Haryana) Ltd. v. Atlas Products Pvt. Ltd. [146 (2008) DLT 274(DB), where the facts of the present case were similar that the company should be restrained from using the trade mark of another company in the same family
Answer to Question No. 5(d) ln the case of Fortunes Stones Ltd. v. Registrar of Companies [(2008) 84 SCL 479 (DEL)], where the facts of the present case were similar, the perusal of the complaint showed that the offence was for the contravention of section 224(7) of the Companies Act, 1956 which required a company to obtain the previous approval of the Central Government for removal of the auditor at general meeting. The
subsequent obtaining of the permission of the Central Government cannot rectify the contravention of section 224 (7) which mandate a prior approval. By the very nature of the statutory requirement, the contravention can constitute only a one time offence and not a continuing one. The contention that the contravention in the instant case was a continuing one was to, accordingly, reiected
Question No.6
(a)
(b)
Distinguish between: (i) lnterim dividend and Finatdividend. (ii) Forfeiture and Surrender of shares. Write short nofes on; Reduction of Share Capital. (ii) Management Discussion and Analysis Report.
(4 marks each)
(4 marks each)
Answer to Question No. 6 (aXa)
Distinction between interim dividend and final dividend

Final Dividend Final dividend is recommended by the Board of directors in its report to the shareholders, as per the requirements of Section 217 of the Comfanies Act, 1956 which is attached to the balance sheet for the relevant financial year. lt is declared by the shareholders at the annual general meeting. Usually, articles of association of companies provide that the shareholders cannot increase the rate or amount of dividend than the one recommended by the Board. The shareholders may, however, declare the payment of dividend on equity shares at recommended by the directors in their report.
a rate lower than the one
It is the discretion of the Board of directors to recommend or not to recommend the declaration of final dividend, which has to be exercised in good faith in the interest of the company. The shareholders have no power to declare final dividend in the absence of a recommendation of the Board of directors in this regard.
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lnterim Dividend
Section 2(144) of the Companies Act, 1956 defines'Dividend' to include interim dividend. The Companies (Amendment) Act, 2000 has amended Section 205 to make provisions for interim dividend. The Board of directors may declare interim dividend. The interim dividend is paid between two annual general meetings of the
company. Prior to the coming into force of the Companies (Amendment) Act, 2000, the Act did not contain specific provisions for payment of interim dividend. However, if the articles of association of company authorized payment of interim dividend as per regulation 86 of the Table A of Schedule l, then the Board of directors of such company could declare an interim dividend where its profits warranted such payment. A mere resolution for declaration of an interim dividend did not create any liability and could be rescinded at any time before actual payment. This was so even if the cash
to cover the proposed dividend had been placed into a separate account. The
distinction between interim and final dividend was that, unlike interim dividend, a final dividend once declared by the company in general meeting was a debt and created an enforceable obligation. [Punjab National Bank v. Union of lndia (1986) 59 Comp Cases 35 (Del.)l With the enactment of the Companies (AmendmenQ Act, 2000, this position has changed. lnterim dividend stands on the same footing as that of the final dividend. Both interim and final dividend when declared become debt and are payable within
30 days of declaration.
Answer to Question No. 6 (aXii)

FORFEITURE OF SHARES
To forfeit means to lose the right to, be deprived of; to lose or become liable to lose, as in consequence of fault or breach of promise or contract. lt is a penalty for a breach of contract or neglect; a fine that is imposed for not complying with the
stipulated condition, obligation or duty. For example, in the case of shares of a company, if a call money payable on a partly-paid share is'not paid by a shareholder, the company can forfeit the shares for the obligation of paying the call money not being fulfilled by the shareholder A forfeited share is a partly paid share in a company that the shareholder has to forfeit because he has failed to pay a subsequent part or final payment; a share to which the right is lost by the shareholder who has defaulted in paying call money. The Companies Act, 1956 does not contain any provision in respect of forfeiture of shares in a company. However, articles of assoOiation of almost allthe companies
contain detailed provisions regulating forfeiture of shares. These provisions are based on the regulations 29 to 35 in Table A of Schedule I to the Companies Act, 1956 or recast based on the regulations.
SURRENDER OF SHARES
Surrender means to hand over; relinquish possession of, especially on compulsion or demand. The Companies Act does not contain any provision on surrender of shares. Table A in the First Schedule also does not give power to a
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company to accept surrender of its shares; it contains no regulation on this subject.
There is difference between surrender and forfeiture of shares. There is no

reference in the Act to surrender of shares; but these have been admitted by the courts, upon the principle that they have practically the same effect as forfeiture, the main difference being that the forfeiture is a proceeding against an unwilling party and the surrender a proceeding taken with the assent of the shareholder who is unable to retrain and pay future calls on the shares. Further, surrender is voluntary while the forfeiture is due to breach of contract.
Answer to Question No. 6 (bXi) Reduction of Share Capital

Reduction of capital means reduction of issued, subscribed and paid-up capital of the company. Section 100 of the Companies Act, 1956 provides for the reduction of share capital, if the arti0les of the company so authorise. lf there is no such clause in the articles, these must be altered by a special resolution giving the company the power to reduce capital.
A company limited by shares or a company limited by guarantee and having a

share capital may, if authorised by its articles, by special resolution, and subject to its
confirmation by the Court on petition, reduce its share capital

particular:
in any way and in
(a)
(b) (c)
(d) (e) by writing off or cancelling the capital which has been lost or is
by reducing or extinguishing the liability of members in respect of uncalled or unpaid capital e.9., where the shares are of Rs. 100 each with Rs. 75 paid-up reduce them to Rs. 75 fully paid-up shares and thus relieve the shareholders from liability on the uncalled capital of Rs. 25 per share; by paying off or returning paid-up capital not wanted for the purposes of the company, e.9., where the shares are fully paid-up, reduce them to Rs. 75 each and pay back, Rs. 25 per share; by paying off the paid-up capital on the condition that it may be called up again so that the liability is not extinguished; by following a combination of any of the preceding methods;
under
represented by the available assets e.g. a share of Rs. 100 fully paid-up is represented by Rs. 75 worth of assets. ln such a situation reality can be reintroduced by writing otf Rs. 25 per share. This is the most common method of reduction of capital. The assets side of the balance sheet may include useless assets which are cancelled. On the other hand in the liability side share capital is reduced.
Answerto Questidn No.6 (bXii)

MANAGEMENT DTSCUSSTON AND ANALYSTS REPORT (MDAR)
The MDAR should either form a part of the Board's Report or be given as an
addition thereto in the annual report to the shareholders. The MDAR should include a discussion on the following matters within the limits set by the company's competitive position:
lndustry structure and developments
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Opportunities and threats Segment-wise or product-wise performance

ouitoot< Risks and areas of concern tnternal control systems and their adequacy Discussion on financial performance with respect to operational performance Material,developments in human resburces/industrial relations front, including number of people employed.
MDAR should be considered and approved by the Board in a meeting of the Board and not through resolution passed by circulation. lt is desirable that MDAR is signed in the same manner as in thecase of the.Board's Report.
TEST PAPER 5I2O1O (coMPULSORY) (Based on ALL Study Lessons)

Time allowed: 3 hours NOTE: Attempt ALL guesflons.
Maximum marks: 100
Question No.1
Draft the following resolutions stating the authority that can pass rt and also the
type of resolution.
(i)
(iii)
Resolufions authoizing fhe issue of duplicate share ceftificates.
(ii) Alteration of articles of the company to include an afticle authorizing the

company to have ifs secunties dematerialized. Rqsolution authorizing a director to discharge certain responsibility on behatf
of the Board.
(iv) Resolution for appointment of Compliance

Answer to Question No. {(i)
Officer.
(5 marks each)
SPEGIMEN OF BOARD RESOLUTION AUTHORISING DUPLICA]t SHARE CERTIFICATES
THE ISSUE
OF
"RESOLVED THAT a equity share certificate No. for .....,.... fully paid equity shares of Rs........ each of the company bearing distinctive numbers ....... to ....... (both inclusive) after stating on the face thereof the words "Duplicate issued in lieu of share certificate No......................u be issued in the name of Shri ...............in lieu of original share certificate No...... reported to have been lost by him, under the signatures of the Shri .......... Managing Director, Shri .......... Director, and the Shri ................,. Company Secretiary, under the common seal of the company to'be affixed thereto in the.presence of ine directors and the Company Secretary, who shall sign the share certificate."
Answer to Question No. 1(ii)

SPECIMEN OF SPECIAL RESOLUTION FOR ALTERATION OF ARTICLES OF THE COMPANY TO INCLUDE AN ARTICLE AUTHORISING THE COMPANY TO HAVE ITS SECURITIES DEMATERIALISED
"RESOLVED THAT pursuant to Section 31 of the Companies Act, 1956, the articles of association of the company be and are hereby altered by inserting the article No............after the Article No.,.........,so as to include the provisions with respect to the Dematerialisation of Securities; After article No..., the following be inserted as article ...
:
Article ... Dematerialisation of Securities

A. Definitions:
For the purpose of this article:-
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'Beneficial Owner'.means a person or persons whose name is recorded as such with a depository. 'SEBI' means the Securities and Exchange Board of lndia. 'Depository' means a company formed and'registered underthe Companies Act, 1956, and which has been granted a certificate of registration to act as a depository under the Securities and Exchange Board of lndia Act, 1992; and
'security' means such security as may be specified by SEBI from time to time. B. Demderialisation of Secunfi'es
Notwithstanding anything contained in these articles, the company shall be entitled to demateria[ise its securities and to offer securities in a dematerialised form pursuant to the Depoiitories Act, 1996.
C. Options for investors

Every person subscribing to securities otfered by the company shall have the option to receive security certificates or to hold the securities with a depository. Such
a person who is the beneficial owner of the securities can at any time opt out of a depository if permitted by the applicable law in respect of any security in the manner provided by the Depositories Act, and the company shall, in the manner and within the time prescribed, issue to the beneficial owner the required certificates of
securities.
lf a person opts to hold his security with a depository, the company shall intimate such depository the details of allotment of the security andior transfer of securities in his name and on receipt of the information, the depository shall enter in its record the name of the allottee andlor transferee as the beneficial owner of the security.
D. Securities in Depositories to be in Fungible Form
All securities held by a depository shall be dematerialised and be in fungible form. Nothing contained in Sections 153, 153A, 153B, 1878,187C and 372A of the Act shall apply to a depository in respect of the securities held by it on behalf of the
beneficial owners.
E. Distinctive Numbers of Securifies held in a Depository

Nothing contained in the Act or these articles regarding the necessity of having distinctive numbers for securities issued by the company shall apply to securities held with a depository.
F. Rights of Depositories and Beneficial Qwners (i) Notwithstanding anything to the contrary contained in the Act or these articles, a depository shall be deemed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of the
beneficial owner.
(ii) Save as otherwise
provided in (a) above, the depository as the registered owner of the securities shall not have any voting rights or any other rights in respect of the securities held by it.
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(iii)
Every person holding securities of the company and whose name is entered as the beneficial owner in the records of the depository shall be deemed to be a member of the company. The beneficial owner of securities shall be entitled to all the rights and benefits and be subject to all the liabitities in respect of his securities which are held by a depository.
G. Seruice of Documents
Notwithstanding anything to the contrary contained in the Act or these articles, where securities are held in a depository, the records of the beneficial ownership may be served by such depository on the company by means of electronic mode or by delivery of floppies or discs.
H. Transfer of Secunfi'es
Nothing contained in Section 108 of the Act or these articles shall apply to a transfer of securities effected by a transferor and transferee both of whom are entered as beneficial owners in the records of a depository.
l. Allotment of Securities Dealf in a Depository
are dealt in a depository, the company shall intimate the details thereof to the
depository immediately on allotment and/or registration of transfer of such securities.
Notwithstanding anything contained in the Act or these articles, where securities
J. Register and lndex of Beneficial Owners

The register and index of beneficialowners maintained by a depository under the Depositories Act, 1996, shall be deemed to be the register and index of members and security holders for the purposes of these articles." RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized to do atl such acts and deeds like filing of necessary documents with ROC etc so as to give effect to this resolution.
Answerto Question No. 1(iii)

SPECIMEN RESOLUTION AUTHORISING A DIRECTOR CERTAIN RESPONSIBILIW ON BEHAI.F OF THE BOARD
TO
DISCHARGE
'RESOLVED that Shri A, Director, be and is hereby authorised to sign and execute counter guarantees in favour of the State Bank of lndia on behalf of the company whenever the company has to get guarantees issued by the said Bank for the purpose of giving quotations against the tenders floated by the agencies of Central or State Government andtny other company." Answer to Question No. 1(ivf
BOARD RESOLUTION FOR APPOINTMENT OF COMPLIANCE OFFICER "RESOLVED that the company do hereby appoint Mr. ............ Deputy Company Secretary of the company who has ten years experience in Listed Companies, as Compliance Officer of the company who shall be responsible for monitoring the share transfer process (both physical and demat mode) and report to
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the Board in its each meeting and liaise directly with the authorities of the SEBI,
Stock Exchanges, Registrar of Companies etc, the shareholders of the company and investors with respect to implementation of various clauses, rules, regulations and other directives of such authorities and investors services and complaints related matters and in compliance with the provisions of the Companies Act, 1956, Listing Agreement and Rules and Regulations framed thereunder."
Question No.2
(a) Rewrite the following sentences after filling-in the blank spaces
a pp
with
ro p riate wo rd (s/fig ures(s) :
(i)
whether the .............. affixed in the eForm actually belong to signatory
(iil
of the company and/or of a practicing professional. By viftue of section 12 (2) (c) of the Companies Act, 1956, an members.
company is a company not having any limit on the .............. of /s

The power
(ii|
to make
calls can
a resolution passed at a duly
convened
be exercised onty by the . . . . . ... by means of

meeting.
(iv) According to section ......... of the Companies Act, a company is required to file a return of allotmenf of shares and not for ......... of
forteited shares.
.
(b)
(v)
Section 117C of the Act requires every company to create a .......... to which adequate amount shall out of its profits every year.
be
(vi) According to section

State, with reasons incorrect:
297 of the Companies Act, sanction is required for ceftain contracts in which any ........... ts interested. (1 mark each)
1956,
in
br'tef,
whether the fottowing sfafemenfs are correct or

and
(i) After the company is incorporated, it may acquire the assefs

liabilities of any running buslness.
(ii)
Shares offered
bonus shares.
to the existing
shareholders
of a company are called
(iii) Section 1178 was insefted by Companies (Amendment) Act, 20A2. (iv) The totat number of directors and additional directors can exceed the
maximum strength of directors fixed for the Board by the articles of the
company.
(v) Section 224(1) provides that every company must appoint auditor
or auditors at each annual general meeting to hold office from the date of that annual general meeting till the date of the next annual general (2 marks each) meeting.
Answer to Question No. 2(a) (i) Role Check; Digitatsignature (ii) Unlimited; Liability (iii) Board; Board (iv) 75; Reissue
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(v) (vi)
Debenture Redemption Reserve ; credited Board's; Dlrector

(i) True. After a company is incorporated, it becomes a legal entity separate from the persons who constituted it. Therefore, it may acquire the assets and liabilities of any running business in its own name.
(ii) Fatse. Shares offered to the existing shareholders of a company are called 'rights shares'. Section 81 of the Companies Act, 1956 contains provisions on "further
issue of capital", and enacts the principle of pre-emptive rights of shareholders of a company to subscribe to new shares of the company. (iii) False. Section 1178 was inserted'by the Companies Amendment Act, 2000 w.e.f. 13-12-2000.
(iv) False. According to section 260 of the Companies Act, 1956, the total
number of directors and additional directors shall not exceed the maximum strength of directors fixed for the Board by the articles of the company.
(v) True. According to Section 224(1) of the Companies Act, 1956,
every
company shall, at each annual general meeting (AGM), appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.
Question No.3
(a)
Choose the most appropriate answer from the given options in respect of the following: (i) The minimum paid up capital for private limited company r.s Rs. (a) 1,00,000 (b) 2,00,000 (c) 3,00,000 (d) 4,00,000 (ii) Secfion 31 of the Companies Act, 1956 lays down that subiect to the provisions of the Act and to the conditions contained in its memorandum, a company may, by a ........., alter its articles. (a) ordinary resolution (b) special resolution (c) resolution by special notice (d) board resolution (iii) The power to convert shares into stock and reconvert stock rnfo shares ls conferred on a company by
(a) section 91 (b) section 92 (c) section 93 (d) section 94

(iv)
Section 2(27) excludes a bearer of a share-warrant of the company to be a .........-...
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(b) You are the ,cgmpany secretary of Maritime containers Ltd., a company,
Answerto euestion
general meeting appoints another auditor, of whose nomination [,v member, notice has been given to the members nof tess thai.....-.. "ni before the meeting (a) ten days (b) twelve days (c) fourteen days (d) twenty-one days (vi) Any general meeting helct between two annual generat meetings witt be called (a) an extraordinary general meeting. (b) a board meeting. (c) A statutory meeting. (d) A class meeting. (1 mark each)
(a) member (b) sharehotder (c) director (d) none ofthe above. (v) The first auditor of a company may be
removed,
ii
the company at a
and the Managing Director of your company wants to know the procedure for changing the name of the ampany. prepare a note for him.
tisted
(i) (ii)
No.3(a)
fto marks)
(a) 1,00000
(b) Speciat Resotution (d) Section g4
(iii) (iv) (a) member (v) (c) fourteen days (vi) (a) an extraordinary general meeting.
To The Board of Directors XYZ Limited.
Sub: - Procedure regarding change of name of the company
A company has to take the following procedural steps for its change of name: 1. lssue notice in.writing.to gv.ery director of the company for the time being in provisions
lndia and at his usual address in lndia to every'other director as p"iin" of section 296 of the companies Act, 1956. The noticb must contain time, date and venue for the meeting and detailed agenda of ne business to be transacted thereat
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2.
Hold the Board rneeting to

(i) Consider
and approve the proposed name by passing
resolution.
Considering that the proposed name may not be made available by the concerned Registrar of Companies (ROC), the Board must consider and decide at least five more names in order of their preference. These names are required to be given in the application for availability of name to be made.to the Registrar of Companies in e-form 1A, as prescribed in
the Companies (Central Government's) General Rules and
Forms
(Amendment) Rules, 2006, for his consideration. lf the proposed name is
not available, the five additional names may be considered by the Registrar and whichever of those names is available, the same is reserved for the company. A formal Board resolution is required to be
passed at the meeting.
3.
Company Secretary/Director to make the required application to the Registrar of Companies in e-form 1A for seeking availability of the proposed name and pay the prescribed application fee of Rs.500/-. The application in e-Form 1A, accompanied by a fee of rupees five hundred to the Registrai of Companies should have the following documents as
(ii)
to authorise the
attachment:
1
ln case of change of name of an existing company, a copy of

resolution;
Board
Trademark or authorization to use trade mark, if the name of the company is based on trade mark or application for deed of assignment; 3. lf change is due to a direction received from the Central Government, then a copy of such direction; 4. Optional attachment(s) - if any. The Registrar is required to inform the applicant, about the availability or otherwise of the name applied for, within three days of the receipt of the application vide rule 4A(1). lf the proposed name is available, the same should be adopted, that is to say, the adoption of such name should be effected, within sixty days from the date of intimation by the Registrar vide rule A(2Xa). The applicant may apply for extension for retention of such name for a further period of thirty days on payment of fifty per cent of the fee prescribed for the application at the initial stage, no further extension will be granted after expiry of ninety days from the date the name is allowed in the first instance. The name allowed shall lapse after expiry of sixty or ninety days, as the case may be, from the date it is allowed first. On filing e-form 14, the system will process and generate a Service Request Number (SRN) which shall be used for tracking the status of
name clearance.
4. On receipt of approval of name,

business:
the Company Secretary/Director must, in consultation with the Chairman of the Board meetings, fix time, date and venue for holding another Board meeting for transacting the following
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(i)
To take note of the approval received from the ROC. .extraordinary) of the shareholders of the
(ii) To fix time, date and venue for
holding
a general meeting (annual or company21 of the Act
(a) for passing a special resolution required under Section (b)
for changing the name of the company; and for passing another special resolution under Section 16 of the Act for altering clause I (name clause) in the memorandum of association of the company in accordance with Section 16 of the Act.
(iii) To approve notice of the general meeting and the explanatory statement to be annexed to the notice under Section 173 (2) of the Act for the general meeting and to authorise the Company Secretary/Director to
5. 6.
7.
issue the notice on behalf of the Board. lssue notice of the general meeting to all the members of the company, its directors and the auditors. ln the case of listed companies, send three copies of the notice to each stock exchange where the securities of the company are listed (Refer Clause 31 of the Listing Agreement). A general notice of the general meeting may also be published in newspapers. Hold the general meeting and pass the resolutions as contained in the notice.
9. Send to each stock exchange, six copies of the alterations of

Agreement).
the memorandum (one of them must be certified) soon after the conclusion of the
general meeting, in case shares of the company are listed (Refer Listing
10. Send to each stock exchanges, a copy of the proceedings of the general
meeting in case shares of the company are listed (Clause 33 of the Listing Agreement)
11. File with the ROC e-form 23 with a certified true copy of each special resolution passed at the general meeting along with the explanatory statement under Section 173 and altered iopy of Memorandum of
Association and Articles of Association and prescribed filing fee.
12. Make an application to the concerned Registrar of Companies alongwith the

prescribed application fee, for obtaining Central Government's approval to the change cf name of the company. New e-form 1B has been prescribed for this purpose. The attachments with e-form 1B are as below: 1. Minutes of the members' meeting; 2. Certified copy of the order for condonation of delay; 3. Optional attachment(s) - if any. On receipt of the Central Government's approval to the change of name, the company should surrender to the ROC, the existing Certificate of
13.
lncorporation with a request for the issue of a Fresh Certificate of lncorporation consequent upon change of name of the company. 14. lssue a general notice in newspapers informing all concerned, about the
,,, i*:::",,l:n:""J*";::ffiH*hor*.s
about the changed name or the
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Company, particularly the Stock Exchanges, National Securities Depository
16
17. 18. 19.
Ltd., Central Depository Services (lndia) Ltd., Central Excise Authorities, Sales{ax Authorities in various States, Customs Authorities, Chief lnspector of Factories, Regional Provident Fund Commissioner, suppliers of raw materials, customers, banks etc. Arrange for a new Common Seal and have the same adopted at a meeting of the Board of directors and keep both the old and the new Common Seals under lock and key. Get stationery printed with the hew name and/or affix rubber stamp of the new name on allthe existing stationery including the blank share certificates. Get the new name of the Company painted on all the signboards wherever they are displayed. Correct all records, registers including the Register of Members, share certificates, every copy of Memorandum and Articles of Association. sd/Company Secretary
Question No.4
(a) (b)
Total strength of the Board of Directors of your company in ten. How many directors are liable to retire by rotation at the next annual general meeting? (5 marks)
Your compapy has total twelve directors as under: 3 Non-retiring 5 Retiring 4
directors directors Additionaldirectors
Staf e the number of directors liable to retire by rotation at the Annual General Meeting and the total number of directors who shall vacate the office at the
AGM.
(5 marks)
(c) The Board of
Directors of a public company met on three times in the previous year, the fourth meeting though called could not be held for want of quorum on two occasions successive/y. Dr.scuss whether any provisions of (6 marks) the Companies Acf have been contravened.
Answer to Question No. 4(a) According to section 255(1) of the Companies Act, 1956, unless the articles provide for the retirement of all directors at every annual general meeting, not less than two-thirds of the total number of directors of a public company, or of a private company which is a subsidiary of a public company, shall be persons whose period of office is liable to determination by retirement of directors by rotatiori. Further, as per section 256 of the Companies Act, 1956, at the first annual general meeting of a public company, or a private company which is a subsidiary of a public company, held next after the date of the general meeting at which the first directors are appointed in accordance with section 255 and at every subsequent annual general meeting, one-third of such of the directors for the time being as are liable to retire by rotation, or if their number is not three or a multiple of three, then, the number nearest to one-third, shall retire from office.
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After interpreting section 255 and 256 of the Act, the numbers of directors liable
to retire by rotation at the next annual general meeting are as follows:Total number of directors 10 3 Non-retiring 7 Retiring So, persons liable to retire at the next 2
diregtors directors
AGM
Answer to Question No. 4(b) According to section 255(1) of the Companies Act, 1956, unless the articles provide for the retirement of all directors at every annual general meeting, not less than twothirds of the total number of directors of a public company, or of a private company which is a subsidiary of a public company, shall be persons whsse period of office is liable to determination by retirement of directors by rotation. While calculating the limit of 2l3rd , Additional Directors will not be taken into account. As per section 260 of the Companies Act, 1956, additional directors shall
hold office only up to the date of the next annual general meeting of the company.
As per section 256 of the Companies Act, 1956, at the first annual general meeting of a public company, or a private company which is a subsidiary of a public company, held next after the date of the general meeting at which the first directors
are appointed in accordance with section 255 and at every subsequent annual
general rneeting, one{hird of such of the directors for the time being as are liable to retire by rotation, or if their number is not three or a multiple of three, then, the number nearest to one-third, shall retire from office.
ln the given case, according to Section 255 of the Act, 2/3rd of 8 directors (as additional directors will not be taken into account) will be 5.33 but the same will be taken as 6.
But in the given situation the retiring directors are only 5 and hence Section 255
is not being complied. Hence, the Company is required to add one more retiring
director to comply with the provisions of Section 255 of theAct.
Otherwise as per Section 256 of the Act, the number of directors liable to retire by rotation at the AGM is two. Further, the total number of directors who shall vacate the office at the AGM is six (four additional directors and two retiring directors).

ln the case of every company, a meeting of its Board of directors shall be held at least once in every three months and at least four such meetings shall be'held in every year. But, section 288(2) provides that where a meeting is called but could not be held for want of quorum, there is no contravention of section 285. Thus, as per the facts in the present case, there has been no contravention of any provisions of the Companies Act, 1956.
Question No.5
(a)
State the practical aspecfs which should be considered while drafting agenda (10 marks) and notes on agenda. (b) The Board of Directors ot ABC Ltd. constituted an audit committee
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comprising 6 members but did not fix the quorum. Can two members of the committee present at a duly convened meeting validly transact fhe buslness?
(6 marks) Answer to Question No. 5(a)

DRAFTING OF AGENDA AND NOTES ON AGENDA_ PRACTTCAL ASPECTS
1. While
preparing the Agenda and notes thereon, good drafting is one of the essential aspects. While part of the Agenda consists of routine items, the drafting of which does not pose any problem, where there are important or non-routine items, the Agenda has to be prepared carefully, employing not
only good drafting skill but also an understanding of

considerations and the business environment. For the purpose:
commercial or
(a) Divide the Agenda into two parts: - the first part containing usual
routine items and the second part containing other items which can further be bifurcated as (i) items for approval; and (ii) items for
(b)
information/noting. For each item of the Agenda give an explanatory note followed by a draft of the Resolution, if any, proposed to be passed. The explanatory note should give sufficient details of the proposal, including the proposed Resolution, if any, with references to the provisions of the Companies Act, the Memorandum and Articles of Association, other relevant doc.uments, decisions of previous Board or general meetings, statutory enactments, case laws, etc. For the purpose, the note should be drafted under the following heads:
(i) Background (or lntroduction); (ii) Proposal; (iii) Provisions of Law; (iv) Decision(s) required; and (v) lnterest, if any, of any Directors. 2. The Secretary should specify a date by which items requiring approval/
noting by the Board should be given to him by the concerned Departments for inclusion in the Agenda and a deadline for furnishing papers in support of each such item.
. 3. The Secretary should refer to the Agenda of previous Meetings, to see
whether any items had been deferred and should include them for discussion at the ensuing Meeting. 4. The Secretary should also refer to the Minutes of the Meeting held during the corresponding period of the previous year to see whether there are any recurring periodic items (e.9. interim/final dividend, quarterly results). .
5. The Secretary should flnalise the Agenda in consultation with
the
6.
7.
Chairman/Managing Director. Notes on policy matters should present clear-cut issues in order to facilitate due deliberations and precise decisions at the Meeting. Circulation of draft Resolutions to.be passed at the Meeting would enable Directors to know in advance as to what they are required to consider and
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save time at the Meeting, facilitate discussion and simplify the preparation of minutes of the Meeting. 8. The names of those persons who will be attending the Meeting as invitees should be given in the notes to the relevant items of the Agenda. e.g-. if there is an item for approval of the Capital Budget, the note thereon should state that Mr. A, Chief Financial Officer, will make a presentation on the Budget.
9.
As a good corporate secretarial practice, the Secretary should keep,
in
addition to a record of matters to be discussed, a separate folder of all such correspondence, notes and documents which need to be dealt with at the Meeting. tn preparing the Agenda, the Secretary should refer to this folder to enswe that all items which require the decision of the Board are included in
the Agenda.
10.
A separate Agenda item number should be given for items which are brought
'
forward for discussion from a previous Meeting rather than placing them under the omnibus Agenda item of "matters afising from previous Meetings" for example : "ltem No. 9. DISINVESTMENT MANDATE To note the appointment of the Company as advisors for the disinvestment process of ABC Limited (Referto ltem No. 18 of the minutes of the Meeting held on.......)." 11. A few extra copies of the Agenda should always be kept available at the
Meeting.
Answer to Question No. 5(b) As per clause 49 (ll) (B) of the listing agreement, the quorum of the meeting of
audit committee shall be either two members or one-third of the members of the audit committee whichever is greater, but there should be a minimum of two independent directors present.
Therefore, assuming that ABC Ltd. is a listed company, two members of the audit committee present at a duly convened meeting can validly transact the business provided both the directors are independent.
Question No.6
(a)
(b)
Describe the procedure for passing of resolutions by postal
Outline the procedure for inter-corporate loans and
baltot. (8 marks) investments. (8 marks)
Answer to Question No;6(a)

Procedure for passing of resolutions by postal ballot For any item of business identified to be transacted through voting by Postal ' Ballot, the first step is to convene a meeting of the Board for the purposes of: (i) approval of Notice of the Resolution along with draft Resolution sought to be passed through voting by Postal Ballot and the explanatory statement
thereof;
1.
(ii)
authorising a Managing or Whole-time Director and the Company Secretary or, where there is no such Managing or Whol+'time Director, any other
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Director and the Company Secretary to supervise and control the entire Postal Ballot process; (iii) approving the appointment of the Scrutinizer and fixing,the duration of his appointment as well as his remuneration, or authorising the Chairman/ Managing Director or a Whole-time Director or any other Director to fix his
remuneration;
(iv) determining the date for reckoning voting rights and ascertaining those
shareholders to whom the Notice and postal ballot form should be sent;
(v) specifying a time timit within which the postal ballot forms should
despatched;
be
(vi) specifying a time limit within which the postal ballot forms, duly completed,
should be returned by shareholders to the Scrutinizer;
(vii) identifying the person who will retain custody of the postal ballot
forms
on the scrutiny to the Chairman (such person could be the

Secretary);
received from the Scrutinizer after the Scrutinizer has submitted his Report
Company
(viii) determining the date of the announcement

company;
of the result of Postal Ballot by the
(ix) approval of calendar of events
2. The Scrutinizer
the company.
appointed by the Board should not be in the employment of

a
Scrutinizer is willing to act as such and should obtain the cons6nt of the Scrutinizer. The appointment of the Scrutinizer can also be made through a Resolution passed by circulation. Within seven days of his appointment, the Scrutinizer should be intimated,
of such appointment. reimbursed out of pocket expenses incurred by him for the purpose of scrutiny.
3.
The Board should ascertain whether the person to be appointed as
4.
ln addition to the remuneration to be paid to the Scrutinizer, he should be

may appoint one or more assistants to help him in the process
5. The Scrutinizer
of scrutiny.
6. The Managing or Whole-time Director or, if there is no such Managing or Whole- time Director, any other Director together with the Company Secretary entrusted by th_e Board with the responsibility for the entire Postal Ballot process should regularly monitor the action taken for conduct of the process for voting by
PostalBallot.
7. A copy of the Board Resolution authorizing the process for obtaining approval of shareholders through voting by Postal Ballot should be sent to the Registrar of Companies within one week of passing of such Resolution and should be accompanied by a copy of the calendar of events. No filing fee is required to be paid
in this connection
8. Notice in writing of every Resolution required to be passed through voting by Postal Ballot should be given to every Member of the company, holding equity or preference shares, on a date as close to the date of despatch of the Notice as may
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be fixed by the Managing or whole-time Director and the company secretary authorized to supervise the Postal Ballot process. Notice should also be given to the Directors and Auditors of the company, to every stock Exchange on which the securities of the company are listed and, where applicable or so iequired, to other
persons srjch as debenture holders, trustees foi'debenture holders, banks and financial institutions. For such persons, the postal ballot form should be marked "specimen" and should not have any serial number. lf the company accidentally omits to send the Notice or if an eligible Member does not receive the postal ballot form sent to him, this will not invalidate the Resolution passed or the result of the Postal
Ballot.
9. The Notice should specify that it is being issued pursuant to Section 192A (2) of the Act. lt should contain the draft Resolution proposed to be passed through voting by Postal Ballot and should be accompanied by the necessary explanatory statement explaining the reasons therefor and setting out all material facts as would enable a Member to take a considered decision on the matter. The Notice should also specify the day, date, time and venue where the result of the voting by Postal
Ballot will be announced.
10. The Notice should state that only a Member entitled to vote can fill in the postal ballot form and send it to the Scrutinizer, and that any recipient of the Notice who has no voting rights should treat the Notice as an intimation only.
11. The Notice should specify the last date and time on or before which the duly filled in postal ballot form should reach the Scrutinizer, such date being thirty dayi from the last date of despatch of Notice.
12. The'Notice should be accompanied by the postal ballot form with the necessary instructions for filling, signing and returning the same. ln the case of shareholders who are resident and have an address in lndia, a self-addressed business reply envelope in the name of the Scrutinizer should accompany the Notice. The envelope should either be prepaid or specify that postage shall be paid, on receipt, by the addressee (i.e. the company! even where such envelopes are preaddressed to the Scrutinizer).
13. The date of despatch of Nbtice shall be deemed to be the date on which the despatch of all Notices, postal ballot forms and other related papers is completed. This date is hereinafter referred to as the cut-off date.
14. An advertisement intimating the despatch of postal ballot forms should be published in a leading English newspaper and in one vernacular newspaper circulating in the state in which the registered office of the company is situated.
15. The advertisement should indicate the last date on or before which the postal ballot forms should reach the Scrutinizer ahd should state that Members may obtain duplicate postal ballot forms, if so required.
16. lt should be made clear to any shareholder requesting for a duplicate postal ballot form that the time limit of thirty days for receiving the duly filled in postal batlot form would be counted from the cut-off date and not from the date of issue of the duplicate Notice and duplicate postal ballot form.
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17. Voting rights of every Member

cut-off date.
should be verified and reckoned as on the
lllustrattion: lf Notice has been despatched to a shareholder on 1Oth May 2009 but the date when despatch of all Notices has been completed is 1st June 2009 and if the shareholder has sold all his shares on 25th May 2009, he has no right to vote on
the Resolution by Postal Ballot. Similarly, if a person becomes a Member after the date of commencement of despatch of the Notice but before the cutoff date, he would be entitled to obtain a postal ballot form from the company and vote on the Resolution by Postal Ballot. 18. The postal ballot brms should be serially numbered, have distinguishing
marks or bar coding or other security features unique to the company.
19. The company should fill in the details at items 1,2,3 and 4 of the postal ballot form regarding the shareholder's name, address, folio number and number of shares held before sending the postal ballot form. A single postal ballot form may provide for multiple items of business to be transacted. A postal ballot form shall be valid only for the items of business of the Notice to which it relates. 20. The postal ballot form should contain instructions as to the manner in which the form is to be completed and may also specify the instances in which the postal ballot form shall be treated as invalid.
21. The last date for receiving the duly completed postal ballot forms bythe Scrutinizer should also be mentioned in the form along with a statement that forms recetved after this date will be treated as if the reply from the Mernber has rrct been
received.
22.The postal ballot forms, duly filled and signed by the shareholders, should be sent{o the Scrutinizer.
23. Duly filled in postal ballot forms should be received by the Scrutinizer not latel than thirty days from the cut-off date. lf the last date fixed for receipt of postal ballo
forms is subsequently declared
public holiday, the last date fixed should
br
construed as the immediately following working day.
24. The Scrutinizer, personally or through his authorised representative, shoulr

mark a serial number for identification, on the envelopes received by him, affix a dat, stamp on such envelopes for the date of receipt and put such envelopes, unopenec in a sealed box to be kept safely till the envelopes are opened.
25. The Scrutinizer, personally or through his authorised representative in

presence, should:
hi
(i) open the envelopes only after the last date for receipt of postal ballot forms; (ii) initial each postal ballot form to ensure authenticity of the process and
facilitate identification
;
(iii) check the validity of the postal ballot forms; (iv) separately number the valid and invalid postal ballot forms consecutively; (v) determine: (a) the total number of postal ballot forms received;
at
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(b) (c)
the number of invalid postal ballot forms received; the number of valid postal ballot forms received.
26. Before verifying any other particulars, the Scrutinizer, personally or through his appointed representative, should verify the signature of the shareholder in the space provided for that purpose.
27. ln case there are two items of business to be transacted by Resolutions to be passed through Postal Ballot, if a Member has given assenVdissent for one item and
not for the other, the postal ballot form should be treated as valid for the item for which the decision has been conveyed and invalid for the item for which no decision
is indicated.
28. The Scrutinizer should submit his report as soon as possible after the last date of receipt of postal ballot forms to facilitate declaration of the result on the specifled date. The Scrutinizer's Report must be addressed to the Chairman and should contain details of thq complete process of scrutiny. lf a compBny has issued shares with differential'voting rights, the Report should also deal separately with voting by shareholders having differential voting rights. The Report snouH be iigned and dated by the Scrutinizer. 29. The Chairman should, on the basis of the Scrutinizer's Report, declare the result of the voting on the Resolution sought to be passed by Postal Ballot on the date, time and vqnue specified in the Notice. The result should be in the form of a summary of number of votes cast for and against the Resolution, indicating also the votes rejected.
30. The Resolution and a brief report thereon, including the result of the voting on the Resolution declared by the Chairman and a summary of the Scrutinizerls Report, shall be recorded in the Minutes Book containing Minutes of proceedings of general meetings, which should be signed by the Chairman within thirty days from the date of declaration of the result of the Postal BaHot. 31. The resultof the Postal Ballotshould be displayed on the notice board of the company at its registered office and its corporate/head office, if such office is situated elsewhere, and also placed on the website, if any, of the company. The result should also be fur:nished to every stock exchange on which the securities of the company are listed and announced by way of a preis release. The Resolution shall be deemei
to have been passed on the date on which the result,of the Postal Ballot has been
declared. The result of the Postal Ballot, once declared, shall be final, 32. A Resolution passed by Postal Ballot should not be rescinded othenrise than by a Resolution passed subsequently through Postal Ballot.
The postal ballot forms and all other related records should be kept in the safe custody of the Scrutinizer till the Chairman signs the Minutes Book in which the result of the voting by Postal Ballot is recorded. The Scrutinizer shall thereafter return the postal ballot forms, the register and any other related documents or records to the designated person of the company for safe-keeping until the Resolution has been implemented.
33. A Resolution shall be deemed to have been implemented if anything is to be
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done thereon when it is so accomplished, or if any document is to be filed with the Registrar or any other authority, when it is so filed.
34. A copy of the Resolution which has been passed, together with a copy of the Notice under Section 192A (1) of the Act containing the draft Resolution and the statement of material facts annexed thereto should, within thirty days from the passing of the Resolution, be duly certified under the signature of an officer of the company and filed with the Registrar of Companies.

PROCEDURE FOR INTER.CORPORATE LOANS/INVESTMENT/GIVING GUARAN.
TEE/PROVIDING SECURITY
A company which proposes to make loan/give guarantee/provide security/make investment in another body corporate must follow the procedure detailed below: 1. lssue notibe for Board meeting in writing to every director for the time being in lndia and to every other director at his usual address in lndia per the provisions of Section 286 of the Companies Act.
as
2. Hold Board meeting to consider the proposal to give loan/guarantee or provide security/make investment and(i) if the aggregate amount of proposed loan/guarantee/security/ investment
is within the limits specified in the first proviso to Sub-section (1) of Section 372A of the Act, then pass the resolution with all the directors present
at the meeting
consenting specifying
the limit for
such
loa n/g uarantee/secu rity/i nvestment.
(ii)
if the aggregate amount of proposed loan/guarantee/security/ investment exceeds the specified limits under Section 372A then fix time, date and venue for holding general meeting to pass the special resolution thereat in that regard.
lf
your company is
listed company then have the Special Resolution
mentioned above passed through postal ballot for giving loans or extending guarantee or providing Security. [Section 192A read with Rule 4(g) of the Companies (Passing of the Resolution by Postal Ballot) Rules, 20011
3. Draft the notice of the

following-
special resolution indicate therein clearly the
(a) (b) (c) (d) (e)
specific limits; particulars of the body corporate in which the investment is proposed to be made or loan or security or guarantee is to be given; the purpode of investment, loan, security or guarantee; specific sources of funding;
other details.
4. Get the aforesaid notice and its relevant Explanatory Statement approved by
- 5,
6.
the Board. lssue notice in writing at least twenty one clear days before the date of the General Meeting proposing the special resolution with suitable explanatory
statement.
ln case of listed companies, send three copies of the notice to each Stock
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7. 8. 9.
exchange, where shares of the company are listed. Hold the General meeting and pass the special resolution. ln case of listed cornpany, forward to the Stock exchanges where the shares of the company are listed, copy of the procedings of the general meeting. File the special resolution in e-form 23 along with the explanatory statement with the concerned Registrar of companies within thirty days of passing the Special Resolution after paying the requisite fee prescribed under Schedule X to the Companies Act, 1956.
Specifically indicate in the Explanatory Statement to the resolution the specific Securities in which the company is proposed to invest the amount. 10. Ensure that approiql of the Public Financial lnstitution(s) has been obtaine.d before implementing the proposal if the company has taken any term loan ' from any one of the financial institutions referred to in Section 44 and that" term loan is subsisting except in the following situation: (i) where the aggregate of the loans and investment so far made, the amounts for which guarantee or security so far provided to for in all other bodies corporate, alongwith the investments, loans, guarantee or security proposed to be made does not exceed the limits of 60% as specified in Sub-section (1); and (ii) there is no default in repayment of loan instialments or payment of interest thereon as per the term and condition of such loan to the Public Financial nstitution. 11. Ensure that company has not defaulted in complying with the provisions of Section 58A of the Companies Act, 1956. 12. Also ensure that loan to any body corporate is not made at the rate of interest lower than the prevailing bank rate of interest being the standard rate made public under Section 49 of the. Reserve Bank of lndia Act, 1934. 13. Follow the guidelines/rules, if any, prescribed by the Central Government for the purposes of Section 372A. 14. The officers authorised for this purpose should comply with all formalities like execution of documents, remittance of money etc. 15. Enter the following particulars in respect of every investment or loan made, guarantee given or security provided by the company in relation to any body corporate in a register kept for such purpose in chronological order: (i) the name of the body corporate; (ii) the amount, terms and purpose of the investment or loan or security or
I
guarantee;
(iii) the date on which the investment or loan has been made; (iv) the date on which the guarantee has been given or security has been
provided in connection with a loan.
16. The above said entries are to be made within seven days of the making of
such investment or loan or the giving of such guarantee or the provision of such security

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PROFESSIONAL PROGRAMME [Module I (Paper l)l

COMPANY SECRETARIAL PRAGTIGE

THE INSTITUTE OF Company Secretaries of lndia

email info@icsi.edu websitewww.icsi.edu

THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

IMoDULE il (PAPER 1)l

COMPANY SECRETARIAL PRACTICE

TEST PAPER 1I2O1O

No. 2 No. 3 No. 4 No. 5 No. 6

TEST PAPER 2I2O1O

No. 2 No. 3 No. 4 No. 5 No. 6

These Test Papers are the property

The lnstitute of Company Secretaries of

essential for reproduction of any portion of the Papers.

TEST PAPER 3I2O1O

Answer to Answer to Answer tb Answer to Answer to Answer to

Question Question Question Question Question Question

TEST PAPER 4I2O1O

TEST PAPER 5I2O1O 25. 26.

COMPANY SECRETARIAL PRACTICE

NOTE: Attempt ALL questions.

Answer to Question No. {(c)

5. The issue is made

after one year from the date on which the company

to register a foreign company in tndia?

What is the procedure for changing obiects of a

Ansrnier to Question No. 2(a) PROGEDURE TO REGISTER A FOREIGN COMPANY IN INDIA

Provided that, where all the partners in

a firm are joint secretaries of

Answer to Question No. 2(b)

under Section 17 of the Act for change

6. send to each stock

six copies of the alterations of

listed company (Refer clause gg or the Listing

a /isfed company. Enumerate fhe sfeps involved in

Dr.scuss fhe sfeps involved m rbsue

Ansirer to Question No. 3(a)

A general meeting of the shareholders (annual or extraordinary) is to be

upon the appointment of the following other agencies (holding

S.A.-PP.CSP merchant banker.

subscription For Non-underwritten Public /ssues

lf the company does not receive the minimum subscription of 90% of

date of closure of the issue, the company would refund the

Answer to Question No. 3(b) Steps involved in lssue of Bonus Shares

The procedure for issue of bonus shares by a listed company is enumerated

Ensure that reserves created by revaluation

of fixed assets are

proposed to be considered should be notified to the Stock Exchange(s)

13. Arrangements for convening the general meeting should then be

updated. This list

of allottees is to be approved by the Board or

the articles (if

necessary) To decide on fixing a record date

Draft a specimen resolution for variation of rights of equity shareholders.

Answer to Question No. 4(a)

Answer to Question No. 4(b)

Answer to Question No. 4(c)

(a) The (b) (c) (d)

Question No.5 (a)Exptainthegeneralstructureofane-formandthee;fitingprocess.

Answer to Question No. 5(a)

Drop Down Box

(a) User clicks the provision (b) (c)