Question 1 (a)

V-Farm Pte Ltd (V-Farm) is a hydroponic farm that produces large quantities of hydroponic vegetables. It entered into a contract with Delish Supermarket where V-Farm would supply all its products exclusively to Delish Supermarket. The directors of Delish Supermarket subsequently discovered that U-Farm Pte Ltd (UFarm), a wholly-owned subsidiary of V-Farm, is selling vegetables to competitors at cheaper prices. It appears that the subsidiary was incorporated to enable VFarm to avoid the effects of the contract with Delish Supermarket. Delish Supermarket's directors come to you for advice. Relate to the directors if they have a right to sue V-Farm for breach of contract.

(b) Nova Ltd launched its initial public offering (IPO) for its shares in 2020, accompanied by a prospectus. A few months after the investors purchased the shares, they discovered certain information in the prospectus was incorrect. The investors made their purchase based on the profit figure and financial highlights reported in the 2019 audited financial statements purportedly prepared by a top accounting firm. It turned out that the financial statements were not prepared by the top accounting firm and the directors of Nova Ltd errantly inflated its profits. In the prospectus, the company claimed that it generated a combined $10 billion in revenues and owned some 30 entities. It turned out that they did not generate this amount of revenue and many of these entities do not exist. The investors voice that they would not have purchased the shares had they known about these misstatements. State what is a prospectus and illustrate the potential liabilities that the directors of Nova Ltd may face as a result of the misstatements in the prospectus.

Question 2

GetFit Pte Ltd (GetFit) is a leading retailer of gym equipment in Singapore. The company purchases premium gym equipment that are made in the United States of America (USA) and supplies these equipment to gyms operating in Singapore. The board of directors consists of three directors, Ali, Benji and Charlie. Ali is the managing director and chief executive officer. Benji is an executive director and the company's chief financial officer. Charlie is a non-executive director and is not involved in the day to day operational decisions of the company. Ali has a business background and recently completed his MBA from a local university. Benji is not an accountant and has no formal university qualifications but has a good reputation in the industry having performed in similar roles for the last 20 years. Charlie is an Olympic gymnast and runs his own personal training business for wealthy clients. These wealthy clients would usually purchase gym equipment from GetFit for their use at home.

In July 2019, Charlie was competing at an international gymnastic competition held in Thailand. While travelling, he used hotel gyms to train. He noticed that most of the hotel gyms were not in very good condition. He decided to incorporate a company, Charlie's GetFit Pte Ltd (Charlie's GetFit) and set up meetings with several hotel managements in Thailand to supply them with Chinese manufactured gym equipment. These hotels signed contracts with Charlie's GetFit Pte Ltd. Charlie did not disclose this to Ali and Benji, since GetFit does not export to Thailand. In December 2019, an audit of GetFit's financial accounts revealed that the depreciation expense for several assets had been grossly overstated, thus making the net profit significantly less than it should be. These statements were prepared by the company's accountant, under the supervision of Benji who presented the statements to the board of directors. The other directors did not properly read the statements because they trusted Benji's expertise. As a result of this reduced net profit, the company was unsuccessful in applying for a loan from a bank for a possible takeover of another rival company. Explain if the directors have breached any directors' duties as a result of their actions, and if so, list down the consequences of the breaches. Please approach the question by discussing the two events stated above separately, i.e., discuss the events in

(a) July 2019 and

(b) December 2019.

Question 3

Ricardo is an Italian chef who works in a renounced Italian restaurant in Singapore. He observes that Singaporean youths have increasingly adopted a western palate and especially like to eat Italian pasta. He is collaborating with a few Singaporean friends to start a business to provide "ready-to-eat" pasta sold in food vending machines. After much research and development, he perfected the art and science of cooking pasta using fresh ingredients, and subsequently freezing them in a box, ready to be installed into food vending machines for instant "heat and serve". The investors have pooled together funds to obtain vending machines and have contracted to install these machines in various schools, polytechnics and universities. The pasta is packaged in environmentally friendly boxes, with a logo with the words "Pasta in Box" in white font, encapsulated in a black chef hat with a plate of line-drawn pasta, as displayed in Figure 1. Ricardo and his friends wish to trademark this logo under Class 30 of Trade Mark classifications for "rice, pasta, and noodles". However, this has been opposed by a company who currently holds a trademark in the same class for a logo with the words "Ramen In Box" in black font, captured in a white chef hat, with a bowl of line-drawn noodles and a pair of chopsticks, displayed in Figure 2.

"Ramen In Box" is owned by a local company that supplies frozen Japanese ramen noodles packed in boxes which can be reheated to serve instantly. These products are sold in the frozen food sections in supermarkets and convenience stores.