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Certificate in Accounting and Finance Autumn 2015
(a)
Company court:
A company court is the High Court which has jurisdiction under the Companies
Ordinance, 1984. Its jurisdiction is in the place at which the registered office of the
company is situated.
Company bench:
Company bench(s) is/are one or more benches constituted in each High Court by the chief
justice of the High Court.
The Federal Government may empower any civil court to exercise all or any of the
jurisdictions by the Companies Ordinance, 1984.
(b)
Ans.2
(a)
Pledge:
The above contract is in the nature of pledge.
Pledge is the bailment of goods as a security for the payment of a debt or performance of a
promise.
Sobia in this case is the Pawnor and Meher is the Pawnee.
Rights of Meher (Pawnee):
Meher may bring a suit against Sobia for recovery of the debt.
She may sell the necklace on giving a reasonable notice of the sale.
If the proceeds of such sale are less than Rs. 300,000 (i.e. the amount due in respect of the
debt), Sobia is still liable to pay the balance.
Rights of Sobia (Pawnor)
Sobia was unable to pay in time but she may redeem the necklace pledged at any
subsequent time before its actual sale.
But in such a case Sobia must pay, in addition, any expenses which have arisen from
her default.
In case of sale of necklace by Meher, if the proceeds are greater than Rs. 300,000,
Sobia is entitled to receive the excess amount from Meher.
(b)
(i)
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Certificate in Accounting and Finance Autumn 2015
(ii)
(a)
Discharge of a contract:
A contract is said to be discharged when contractual relations between the parties to a
contract are terminated or come to an end.
Discharge by agreement:
A contract can be discharged by mutual agreement in any of the following ways:
(b)
(i)
Novation:
This new contract may be between the same parties with new terms, or
(ii)
Rescission:
Rescission is the cancellation of a contract by mutual agreement.
(iii)
Alteration:
Alteration means a variation made in the language or terms of a contract with
mutual agreement. When this occurs the original contract is discharged and a new
contract is created. The parties in alteration remain same.
(iv)
Remission:
Remission means acceptance of a lesser amount or lesser degree of performance than
what was contracted for in full discharge of the contract. 0
(v)
Waiver:
Waiver is a unilateral act of one person that results in the surrender of a legal right.
Thus, it amounts to releasing a person of certain legal obligation under a contract.
(vi)
Promisees refusal/neglects:
If any promisee neglects or refuses to afford the promisor reasonable facilities for the
performance of his promise, the promisor is excused by such neglect or refusal as to
any non-performance caused thereby.
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Certificate in Accounting and Finance Autumn 2015
Ans.4
(a)
(b)
Ans.5
(a)
Bill of Exchange:
The above negotiable instrument is a bill of exchange.
Essential characteristics of a bill of exchange:
Following are the essential characteristics of a bill of exchange:
(i)
In writing
A bill of exchange is required to be in writing.
(ii)
Order to pay
The drawer orders the drawee to pay money to the payee. Mere request does not
constitute an order.
(iii)
(iv)
Signed by drawer
The instrument must be signed by the maker (drawer) and accepted by the drawee.
(v)
Certain parties
All the parties must be certain i.e. indicated in a bill of exchange with reasonable
certainty.
(vi)
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Certificate in Accounting and Finance Autumn 2015
(b)
(vii)
(viii)
(ix)
It must be delivered:
A bill of exchange is incomplete until it is delivered to the payee
Ans.6
(a)
Loans to directors:
AL cannot, directly or indirectly, grant any loan to its director, Mr. Majnou.
However, with the approval of Commission, AL may make a loan to Mr. Majnou,
provided he is in the whole-time employment of AL. The loan may be granted:
for paying the cost of any conveyance for personal use or household effects; or
For paying any expense on his medical treatment or the medical treatment of any
relative as are ordinarily made or provided by the company to its employees.
(b)
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Certificate in Accounting and Finance Autumn 2015
Ans.7
(a)
Member:
Member means, in relation to a company having share capital, a subscriber to the
memorandum of the company and every person to whom is allotted, or who becomes the
holder of, any share, scrip or other security which gives him a voting right in the company
and whose name is entered in the register of members, and, in relation to a company not
having a share capital, any person who has agreed to become a member of the company
and whose name is so entered;
(b)
where the order of refusal has been passed, or up-held in appeal, by the registrar,
to the Commission.
An order of the Commission as stated above shall be final and shall not be called in
question before any Court or other authority.
Ans.8
(a)
(i)
(ii)
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(b)
Ans.9
(c)
Circumstances under which CEL may not be responsible to pay dividend to certain
shareholders:
CEL may withhold dividend after obtaining prior approval of Commission within 45 days
of declaration of dividend. The Commission may grant the permission after providing an
opportunity to the shareholder, entitled to receive the dividend, of making representation
against the proposed action.
CEL may not be responsible to pay dividend in the following cases, namely(i)
(ii)
(iii)
(iv)
(v)
where the dividend could not be paid by reason of the operation of any law;
where a shareholder has given directions to CEL regarding the payment of the
dividend and those directions cannot be complied with;
where there is a dispute regarding the right to receive the dividend;
where the dividend has been lawfully adjusted by CEL against any sum due to it
from the shareholder; or
where, for any other reason, the failure to pay the dividend or to post the warrant
within the stipulated period was not due to any default on the part of CEL.
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Ans.10
(a)
(b)
(c)
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