Time : 2HRS Attempt all questions from Section 1 Attempt any three questions from Section 2 Figures to the

right indicate maximum marks allotted to that question.

Marks : 60

SECTION 1
Q -1) (A) Explain the following terms Primary Market b) ESOPS (B) Out the following answer any two a) What are the benefits of Listing? b) Sparrow Ltd. has a project (having life of five years) in wings which would cost Rs.50lakhs. Compute the profitability index of the project when the cost of capital is 12%. The cash flows expected to generate from the project for the five years are Rs.20,00,000, Rs..16,00,000, Rs.18,00,000, Rs.12,00,000 and Rs.14,00,000. The project cost would be depreciated on straight line basis having no scrap value. c)Calculate EVA from the following data for the year ended 31st March 2003 Average Debt ( Crs) 50 Average equity ( Crs) 2766 Cost of debt (Post Tax) 7.72% Cost of equity 16.54% Profit after tax, before exceptional item 15.41 Interest 5 Q-2) Hari Om Ltd. is setting up a new project for manufacturing two products : Product A 30 lacs Kgs and Product B 50 lacs Kgs The cost of the project after capitalising interest and preoperative expenses are as under: ( In lacs) Land and Site Development 52 Building 68 Plant and Machinery 580 Other Fixed Assets 24 Preliminary Expenses 6 Total 730 Means of Finance ( In lacs) Equity Share Capital 250 Term Loan @ (17.5%) 480 Total 730 Assumptions: a) Capacity utilization of both the products is 50%, 60%, for first and second year and is 70% for third year onward. b) Raw Material requirement for product A is 60 per Kg and for product B 160 per Kg. c) Total Cost of power is 60 lacs in first year with an increase of 10% thereafter every year. d) Repairs and maintenance 100 lacs per year. e) Administration Expenses of 80 lacs in first year with an increase of 10% thereafter every year. f) Salaries and Wages are estimated at 200 lacs in first year with an increase of 20% (5) c) Hypothecation d) MVA e) SEBI

thereafter every year. g) Selling Expenses are estimated at 10% of sales. h) Selling price for each product is estimated at 80 and 240 for Product A and B respectively i) Depreciation is to be charged @ 5% on Building, @ 10% on Plant and Machinery and @ 15% on other assets. j) Term Loan are repayable over 5 years in equal installments commencing from second year. k) All expenses are to remain constant for this purpose of appraisal except interest on Term Loan from third year onward. From the above prepare a cost and profitability statement for 5 years and repayment of Term Loan schedule for all the years.

SECTION 2
Q-3) Cock Ltd. furnishes the following data regarding its six segments for the year ended 31st March, 2010: ( In Lakhs) Segments => P Q R S T U Total Segment Assets 300 620 80 60 80 60 1200 Segment Results 50 (190) 10 10 (10) 30 (100) Segment Revenue 40 80 30 20 20 10 200 Identify the reportable segments and advise the management of Cock Ltd. keeping in view the provisions of Accounting Standard 17 on Segment Reporting as issued by the ICAI. Q-4) a) Peacock Ltd. furnishes the following data for the year ended 31st March, 2010: - depreciation provided as per accounting records amounted to 10,00,000/- whereas the depreciation provided as per tax records, under the block of assets concept amounted to Rs. 17,50,000/-- unamortized preliminary expenditure as per tax records amounted to 1,40,000/The income tax rate applicable is 40% and there is adequate evidence of future profit sufficiency. How much deferred tax asset / liability should be recognized as transition adjustment, as per Accounting Standard 22 as issued by the Institute of Chartered Accountants of India. b) Ostrich Ltd. a company incorporated under the Indian Companies Act, 1956 exported goods worth US$ 80,000 to Crow Inc of New York on 15th December, 2009. On that date the exchange rate for US$ 1 was 46.50. The payment for the above export (after adjusting 25% down-payment) was made as under: Date Amount (US $) Exchange Rate for US $ 1 25-02-2010 25,000 Rs.47.50 21-03-2010 20,000 Rs.42.00 15-04-2010 15,000 Rs.48.50 The accounting year of the company ends on 31st March each year. The exchange rate as on 31st March, 2010 for US $ 1 was 45 You are required to compute the foreign exchange loss or gain, as per Accounting Standard 11, for each of the above transactions and in total for the year ended 31st March 2010 & 31st March 2011 by preparing Foreign Exchange Account.

Q-5) On 1st January 2007 Parrot Ltd. purchased from Penguin Ltd. machinery under hire purchase system, 5,00,000 being paid on delivery and the balance in five installments of 7,50,000 each payable half-yearly on 30th June and 31st December. The vendor charges interest @ 10% per annum. The cash price of the machinery was 37,50,000. You are required to show how this transaction should be recorded in the books of Parrot Ltd., by preparing Machinery Account and Penguin Ltd. Account, if depreciation rate is 10% per annum on the written down value of the machinery. The accounts are to be prepared for the first two years only. Q-6) Write Short Note on any Two : a) Functions of SEBI b) Methods of Underwriting c) Benefits of Mutual Funds