This Paper has 25 answerable questions with 0 answered.
| Roll No…………… | |
| Time allowed : 3 hours | Maximum marks : 100 |
| Total number of questions : 8 | Total number of printed pages : 3 |
Note: Answer SIX questions including Question No. 1 which is compulsory. | |
| Marks | |
| 1. | (a) | Explain the terms ‘amalgamation’, ‘merger’, ‘demerger’ and ‘reverse merger’ as are understood under the Companies Act, 1956. Bring out the relevance of each term as a tool of restructuring. | 10 | (0) | ||||||||||||||||||
| (b) | Infocraft Ltd., a listed company, has the following balance sheet as at 31st March, 2004:
The Board of directors of the company proposes to buy–back the company’s shares from its shareholders at a price of Rs.50 per share. You are required to prepare a note for consideration of the Board of directors indicating— | 10 | (0) | |||||||||||||||||||
| 2. | (a) | Comment on the following proposals citing case laws, wherever applicable : | 4each | |||||||||||||||||||
| (i) | A company proposes to compulsorily acquire shares held by small shareholders under a scheme of arrangement. | (0) | ||||||||||||||||||||
| (ii) | Allotment made pursuant to an application made by a shareholder to a rights issue upto the percentage specified in regulation 11 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, who has in the rights offer letter made disclosure that he intends to acquire additional shares beyond his rights entitlement if the issue is under–subscribed. | (0) | ||||||||||||||||||||
| (b) | Discuss the role of courts in approving a scheme of reconstruction or restructuring under sections 391–394 of the Companies Act, 1956 based on decided cases from the standpoint of shareholders and employees. | 8 | (0) | |||||||||||||||||||
| 3. | (a) | Rosy Ltd. is contemplating the purchase of Lily Ltd. Rosy Ltd. has 3,00,000 shares having a market price of Rs.30 per share while Lily Ltd. has 2,00,000 shares selling at Rs.20 per share. The EPS of Rosy Ltd. and Lily Ltd. are Rs.4 and Rs.2.25 respectively. Management of both the companies are discussing proposal for exchange of 0.5 shares of Rosy Ltd. for 1 share of Lily Ltd. You are required to (i) calculate the EPS after merger; and (ii) show the impact on EPS for the shareholders of both the companies. | 6 | (0) | ||||||||||||||||||
| (b) | “The concept of ‘core competency’ is central to the resource–based perspective on corporate strategy.” Comment. | 5 | (0) | |||||||||||||||||||
| (c) | What is ‘strategic planning’ ? Discuss its essential features. How does strategic planning help in strengthening business environment in a company ? | 5 | (0) | |||||||||||||||||||
| 4. | (a) | Enumerate and discuss the events requiring making an open offer under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Also discuss the exemptions available from the requirement of making an open offer under the aforesaid regulations. | 8 | (0) | ||||||||||||||||||
| (b) | Discuss whether the court can refuse a merger proposal in case a monopoly results from the merger. | 4 | (0) | |||||||||||||||||||
| (c) | State whether the tenancy rights can be transferred in a merger. | 4 | (0) | |||||||||||||||||||
| 5. | (a) | Ajay Ltd. has accumulated losses of Rs.80 crore. It has two distinct businesses which account for 90% and 10% of its turnover. Another group company Vijay Ltd. is a tax paying company and desires to make use of the accumulated losses of Ajay Ltd. Advise the best course of action for the group. | 6 | (0) | ||||||||||||||||||
| (b) | A listed company desires to issue preferential warrants to the promoters conferring a right to apply for equity shares one year back from the date of allotment thereof. Prepare a self–contained note for use of the managing director of the company indicating the procedure for issue thereof. | 5 | (0) | |||||||||||||||||||
| (c) | What is the role of Central Government in an amalgamation under sections 391–394 of the Companies Act, 1956 ? | 5 | (0) | |||||||||||||||||||
| 6. | (a) | Draft a petition to the company court for sanctioning the scheme of compromise or arrangement. | 8 | (0) | ||||||||||||||||||
| (b) | What is the difference in treatment of capital gains on demerger in respect of a capital asset — | 2each | ||||||||||||||||||||
| (i) | when the resulting company is an Indian company ? | (0) | ||||||||||||||||||||
| (ii) | when the resulting company is a foreign company ? | (0) | ||||||||||||||||||||
| (c) | How can the post merger efficiency be measured ? Enumerate the main parameters involved in it. | 4 | (0) | |||||||||||||||||||
| 7. | (a) | “Funding of the mergers and acquisitions is a crucial exercise requiring utmost care.” Elaborate this statement and discuss various modes that may be used for funding of the mergers and acquisitions. | 10 | (0) | ||||||||||||||||||
| (b) | List out the communications to be made with various authorities in a buy–back process. Draft one such communication. | 6 | (0) | |||||||||||||||||||
| 8. | (a) | Write short notes on any three of the following : | 3each | |||||||||||||||||||
| (i) | Rehabilitation and revival fund | (0) | ||||||||||||||||||||
| (ii) | Valuation of an unlisted company | (0) | ||||||||||||||||||||
| (iii) | Trading and functional alliances | (0) | ||||||||||||||||||||
| (iv) | Financial restructuring. | (0) | ||||||||||||||||||||
| (b) | What are the safeguards incorporated in the takeover process so as to ensure that shareholders get their payment under the offer/receive back their share certificates ? | 7 | (0) | |||||||||||||||||||
