Company Law assignment. Can someone please thoroughly explain and break down the answer.

UESTION ONE: Paula and Steve are directors of Career International Agency (CIA) Ltd. They decide to enter into an agreement to buy new premises from Property Management Services (PMS) Ltd. CIA pay a substantial deposit to PMS and it is agreed that the company will pay the balance of $400,000 in 6 months. Martin, who is employed as the nancial ofcer for CIA prepared the nancial report on which Paula and Steve based their decision to go ahead with the purchase. However, Martin had been rather careless in his work and it appears that the gures as to predicted future prot had been severely overstated. Neither Paula nor Steve are accountants. It appears that this was the rst time that Martin had made such an error, but Paula and Steve had knowledge that the company's income had been reduced in the previous 12 months, the company had few forward contracts and they suspected the company had been losing money for some time. It had to extend its overdraft with the bank to pay the deposit and other debts and had been late in making some payments to creditors. It also owes money to the IRD. In an attempt to increase the prole of the company, Paula and Steve also decided to enter into a contract with an advertising company for the preparation of TV Ad. They booked advertising with a local TV station to have this Ad played on TV for the next 6 months. Paula and Steve are also directors of the advertising company. Six months later the company is unable to pay the balance of the purchase price to PMS and is put into liquidation by the IRD. The accounts to the advertising company are unpaid and some money is also owing to the TV station. The liquidator believes that the directors have breached their duties to the company. Required: Advise the directors of any duties they may have breached and the likely consequences of such breaches (if any). Refer to relevant sections of the Companies Act 2001 in your