3.

Meetings and Proceedings (Questions) Page 617

Ch # 3: Meetings and Proceedings

Practice Questions for Assessment - Open Book Perspective

Q# Question

Q1* The board of directors of Majestic Limited (ML) intends to change the company’s
name. They are of the view that such a change would help in rebranding and
rebuilding the image of the company. In this regard, the board has directed the
company secretary to call a general meeting on priority basis in order to obtain
members’ approval.
Considering the urgency of the matter, company secretary has advised the board that
required approval under the law may be taken from the members by getting the
resolution passed through circulation.

Required:
Under the provisions of Companies Act, 2017:

(i) advise whether ML can get the resolution passed by its members through
circulation. (02)

(ii) specify the pre and post-requisites which must be taken care of, in order to ensure
that the resolution passed through circulation by members of ML is valid. Also,
briefly discuss the requirements related to retention of records in respect of such
resolutions. (05)

Q2* Sun Energy Limited (SEL) was incorporated on 1 January 2016. The statutory
meeting of SEL is scheduled to be held on 9 June 2016. The statutory report to be
presented to the shareholders has been signed by the CFO, the CEO and a non-
executive director of the company on 20 May 2016. However, the auditors of the
company have refused to verify the statement of receipt and payments on the
grounds that a payment of Rs. 12 million dated 12 May 2016 has not been included in
it. The CFO contends that the payment had not been included because the contract
against which the cheque was issued has been cancelled with mutual consent and the
party has returned the payment by way of a pay-order dated 20 May 2016.

In the light of the provisions of the Companies Act 2017, you are required to:

(a) Comment on the observations of the auditors and the contention of the CFO. (03)

(b) Identify the non-compliances by SEL in the above circumstances. (05)

3. Meetings and Proceedings (Questions) Page 618

Q3* Annual general meeting of Fusion Enamels Limited was held on 31 May 2016 to
transact the following agenda items:
(i) Approval of the minutes.
(ii) To discuss and approve annual audited accounts.
(iii) To approve the dividend as recommended by the directors in their meeting.
(iv) To appoint auditors for the forthcoming year.

The meeting commenced at 10.30 a.m. However, soon after the minutes were
approved i.e. at 11.15 am, Farhan, the chairman, left the meeting due to misbehaviour
of few shareholders. One of the shareholders, Saleem, took the chair to conduct the
meeting. The dividend as recommended by the directors and the audited financial
statements were approved by the shareholders. Later, the meeting was adjourned to
18 June 2016 without the appointment of auditors.

Farhan wants to pass a resolution regarding approval of loan to an associated

undertaking at the adjourned meeting.
In view of the provisions of the Companies Act 2017, and the regulations in Table A
you are required to comment on the following:
(a) Validity of decisions taken at the meeting when it was chaired by Saleem. (04)
(b) Assuming that the meeting as chaired by Saleem was valid, what conditions would
have to be complied with for holding the adjourned meeting and for passing the
resolution as desired by Farhan. (04)

Q4* The Board of Directors of HAQ Limited (HL), a listed company, has decided to buy-
back its ordinary shares through a tender process.
Draftaspecialresolutionfortheproposedbuy-backofsharesofHL.Youmay assume any
information you may consider necessary. (04)

Q5* Draft a special resolution, regarding voluntary winding up of a listed company for
approval in the general meeting of the company. You may assume any necessary
information. (03)

Q6* An Extraordinary General Meeting of Mastermind Technologies Limited (MTL), a

listed company, was scheduled to be held on October 31, 2009. The directors
adjourned the meeting for the next week as the quorum was not present within
fifteen minutes of the scheduled time.
Based on provisions of Companies Act 2017, you are required to comment on:
(a) The decision of the directors to adjourn the meeting, assuming:
(i) the meeting was called upon the requisition of the members.
(ii) the meeting was called by the directors.(03)
(b) The impact of the adjournment on the validity and rights of proxies which were
deposited with the company before adjournment. (02)
(c) The validity of the resolution passed at the adjourned meeting. (02)
3. Meetings and Proceedings (Questions) Page 619

Q7* Karachi Telecommunication (Private) Limited (KTL) was incorporated on 1st March,
2009 under the Companies Act 2017. Its directors have decided to hold first Annual
General Meeting (AGM) of company on August 10, 2010, for placing the first audited
financial statements for period ended March 31, 2010, for approval.
Comment on decision of the directors, in the light of provisions contained in the
Companies Act 2017.

Q8* Arif& Co., Chartered Accountants were to be re-appointed as auditors at the Annual
General Meeting of Rose Limited, an unlisted company. The meeting was held on
October31,2007 but stood adjourned without discussing the appointment of auditors.
Explain the legal position of the auditors in such a situation. (02)

Q9* See-green Limited, a public limited company, had convened a general meeting at 9:00
a.m. on March 25, 2008 to consider and if deemed fit, pass a special resoulution
approving the disposal of a part of the company’s undertaking. The meeting
commenced at 9:16 a.m. as the quorum was not present at the scheduled time and
was attended by 100 members (including 10 members represented through proxies)
holding 1,000,000 shares in aggregate. After a heated debate, voting was held through
show of hands and the chairman declared resolution successful as 78 votes were
casted in favour of the resolution.

On March 31, 2008, the shareholders who gave a dissenting vote in the meeting,
lodged a protest with the company claiming that the resolution was invalid on
account of the following reasons:
(i) Mr. A who voted for the resolution was represented through a proxy which was
deposited at 5:01 p.m. i.e. after office hours on March 22, 2008. Moreover, since
March 23rdwas a public holiday, the condition of depositing proxy atleast 48
hours before meeting, could not be met.
(ii) Mr. B a shareholder with a holding of 50,000 shares was represented by two
proxies i.e. Mr. C (30,000 shares) & Mr. D (20,000 shares). Both proxies
werecounted for the purpose of voting.
(iii) JK (Pvt) Limited holding 20,000 shares of the company , were represented by Mr
Sameer, who is neither the director nor the employee of company. He also voted
in favour of resolution.
(iv) The shareholders who lodged the protest hold 300,000 shares and therefore the
resolution was approved by shareholders holding 70% voting rights only.
(v) Since the meeting could not be held on time, it became invalid and should be
called again.
Discuss the validity of the resolution under the Companies Act 2017, in viewof the
complaint lodged by the dissenting shareholders. (10)
3. Meetings and Proceedings (Questions) Page 620

Q10 (a) The annual general meeting (AGM) of Kamyab Limited is due to be held on12
September 2017 at 10:00 am at company’s registered office.
Being the company secretary, comment on the following situations under the
provisions of the Companies Act, 2017:
(i) Shafiq lodged a proxy form on 10 September 2017 at 5:00 pm. (01)
(ii) Anwar appointed Amjad as his proxy by depositing the proxy form on 8
September 2017. On the next day, Anwar came to know that Amjad has gone
abroad, so he deposited a proxy form in favour of Waqas. (01)
(iii) Sajid appointed Javed as his proxy. Javed’s name is not in the members’ register.
(1.5)
(iv) One of the members, Asaan Limited has inquired about who may attend the AGM
on its behalf and what would be the right(s) of such attendee. (2.5)

(c) Farhan Limited, a listed company, has received a request from a shareholder who
holds 9% shares of the company, to inspect the register containing the minutes of
proceedings of general meetings.
Discuss the rights of the shareholder to inspect the above register. (03)

Q11 (a) Karamad (Pvt) Limited was incorporated on 1 July 2014. Subsequently it was
converted into a public unlisted company on 1 March 2015. Under provisions of
Companies Act 2017:
(i) describe whether the company is required to hold its statutory meeting; if yes,
identify the time frame within which such a meeting must be convened. (03)
(ii) what would have been your decision, had the company been converted into a
listed company on 1 July 2015? (01)
(iii) identify those contents of the statutory report which are required to be certified
by the company’s auditor. Also specify the purpose of the auditor’s certificate.
(02)
(iv) state the requirements of law regarding the certification and filing of statutory
report. (02)
(b) Under the provisions of the Companies Act 2017 state who may call an annual
general meeting of the company. (02)

Q12 Ashraf is the company secretary of ABC Limited and is preparing for the Annual
General Meeting of the company. The following matters are under his consideration:
(i) Three joint holders of 100,000 shares have asked about the procedures of casting
votes by them and how their votes will be counted if each of them wishes to vote
for a different candidate.
(ii) DEF Limited which holds 50,000 shares has appointed one of its ex-employees as
its proxy. The proxy form is signed by the Company Secretary of DEF Limited.
(iii)Theproxyformsubmittedbyoneoftheshareholdersislodgedonedaybeforethemeetin
gUnder the provisions of the Companies Act, 2017discuss how Ashraf would deal
with the above situations.(06)
3. Meetings and Proceedings (Questions) Page 621

Q13 Briefly explain the exceptions to the following provisions as specified under the
Companies Act 2017. Notice of an extraordinary general meeting shall be sent to the
members at least twenty-one days before the date of the meeting, and in the case of a
listed company shall also be published in the prescribed manner. (02 marks)

Q14 Mr. Shakeel has significant shareholdings in various public and private companies. He
is not satisfied with some of the resolutions passed by such companies by show of
hands. You are required to advise him as regards the following:
What conditions would he need to satisfy if Mr. Shakeel wishes to request for a poll?
(05 marks)
Explain whether a company is required to oblige him if he wishes to satisfy himself
about the validity of the results of voting by poll. (02 marks)

Q15 Shabbir Limited, a listed company, is in the process of holding their 23rd Annual
General Meeting for the purpose of different businesses including the election of
directors as per the requirements of the Companies Act 2017. Company secretary
have been informed that due to Summer holidays in major schools in Pak, many
members are not in a position to attend that AGM due to being outstation during
those days.

Company secretary have suggested the company to use the option available under the
Companies Act 2017 to get approve any resolution from members through
circulation. He added that ‘in this way we don’t need to call members personally for
meeting and we can easily pass the resolutions for election of different directors by
simply sending letters to the members and just compiling the responses’
You being the chairman of board of directors is not fully convinced of the solution
suggested by the company secretary as your understanding of the corporate laws
suggest otherwise.

Required:
a) Identify the shortcoming (if any) in the suggestion given by the company
secretary with proper justification
b) Using your expert knowledge of corporate laws, suggest and explain any
alternative mechanism to hold that election under any relevant law or regulation.
(07)
Q16 Noor Textile Limited (NSL), a listed company had convened a general meeting
recently to pass a special resolution for voluntary winding up of the company. The
time of the meeting mentioned in notice of the meeting was 3:00 pm. But due to
covid-19 situation only 35 members out of 350 members holding 40% of the voting
rights of the company were able to attend the meeting, the last member came to the
meeting at 3:16 pm but the directors of the company waited for one hour for other
members and started their meeting at 4:00 pm.
3. Meetings and Proceedings (Questions) Page 622

After a long debate the voting was held through Show of hands and the chairman
declared the resolution as majority of the shareholders (30/35) voted in favor of the
resolution.
You are required to comment on following, in the light of provisions of Companies Act
2017.
a) Miss shamim ara, holding 12% shares of the company submitted an application
to the commission for declaring the resolution invalid because there were a lot
of irregularities and the members were prevented from using their rights
effectively. (03 marks)
b) Following reasons were given by Miss Shamim Ara, declaring the proceedings of
the meeting invalid:
(i) Meeting should be declared invalid, since the meeting could not be held on
given time. (03 marks)
(ii) Special Resolution could not be passed if 3/4th of the majority is not present
at the meeting. (03 marks)

Q17* Adeel Limited (AL), a listed company, intends to hold its 36th annual general meeting
in calendar year 2020 for various agenda items including election of directors. Due to
lockdown and pandemic, many of the members may not be able to attend the AGM.

One of the directors has suggested to send the members letters and to reach out
resolutions after compiling the responses.
Chairman of the board of directors is not fully convinced of above suggestion and has
asked you to evaluate different options available under the law.

Required:
As company secretary of AL, advise the chairman in the light of relevant corporate
laws in particular how election of directors may be held.

Q18* On 2nd October 20X7, the management of Waqt Limited (WL), a public unlisted
company, received information from its auditors XYZ & Co that the engagement
partner and a key audit member involved in the audit of WL have been badly injured
in a car accident. XYZ & Co also informed that audit of WL is not expected to be
finalised before 31st October 20X7 due to the unfortunate and unforeseen event.

WL had planned earlier to conduct its AGM on 24th October 20X7 and to lay its
financial statements for the year ended June 30, 20X7. The directors of WL want to
hold AGM once the financial statements are finalised.
The last AGM was held on 18th October 20X6.

Required:
Advise WL as to appropriate action in these circumstances alongwith relevant
timeframe(s) and contents of application for extension of time in holding the AGM
and laying financial statements before the AGM.