Ac 208 Examiner's Report
AC 208 – Examiner’s Report (Semester 1 AY 2010 / 11)
Question 1(a)
Most students are able to identify the issue of breach of duty of care, skill and diligence for
Hannah as she signs all documents including statements of accounts blindly and is nonchalant and clueless about the business. For Joe, many students discussed the issue whether he was entitled to rely on Eva under s157C and concluded that he could not because Eva did not fall within the categories of persons listed in s157C. This is correct. The majority also discussed that Joe was negligent because he always relied on Eva and abdicated his responsibility.
Marks were accordingly awarded to these students. Some even argued that Joe breached the duty to retain discretion- this …show more content…
The better students would have correctly pointed the differences under each of these provisions for example, the 10% limit in s 76(9A), the fair value requirement and the type of resolutions required in each of the sections. Some students spent too much time describing in detail each of these provisions, which was not necessary.
Question 3(b)
This question was fairly well answered. That said, many students appeared to have answered the question in a hurry as this was probably the last question they had answered in the examination, so it is likely that with better time management, the question would have been better answered. The question itself was fairly straight forward and there would have been no issue of identifying the issue as there was reference in the question to s 163 and s 7. Some students had incorrectly stated that as this was a guarantee by Steely, s 163 was not applicable. Some students had also tried to argue that Steely and Waverly were related companies or in a subsidiary- holding company relationship, which was also incorrect.
The question required students to actually spend some time analyzing the interest of the directors of Steely in Waverly and ascertain if the 20% level had been met, in which case
Question 1(a)
Most students are able to identify the issue of breach of duty of care, skill and diligence for
Hannah as she signs all documents including statements of accounts blindly and is nonchalant and clueless about the business. For Joe, many students discussed the issue whether he was entitled to rely on Eva under s157C and concluded that he could not because Eva did not fall within the categories of persons listed in s157C. This is correct. The majority also discussed that Joe was negligent because he always relied on Eva and abdicated his responsibility.
Marks were accordingly awarded to these students. Some even argued that Joe breached the duty to retain discretion- this …show more content…
The better students would have correctly pointed the differences under each of these provisions for example, the 10% limit in s 76(9A), the fair value requirement and the type of resolutions required in each of the sections. Some students spent too much time describing in detail each of these provisions, which was not necessary.
Question 3(b)
This question was fairly well answered. That said, many students appeared to have answered the question in a hurry as this was probably the last question they had answered in the examination, so it is likely that with better time management, the question would have been better answered. The question itself was fairly straight forward and there would have been no issue of identifying the issue as there was reference in the question to s 163 and s 7. Some students had incorrectly stated that as this was a guarantee by Steely, s 163 was not applicable. Some students had also tried to argue that Steely and Waverly were related companies or in a subsidiary- holding company relationship, which was also incorrect.
The question required students to actually spend some time analyzing the interest of the directors of Steely in Waverly and ascertain if the 20% level had been met, in which case