Lecture - 8

Statutory Meeting of company (sec 157)

MEETINGS AND PROCEEDINGS

157. Statutory meeting of company. –

(1) Every company limited by shares and every company limited by guarantee and
having a share capital shall, within- a period of not less than three months, nor more than six
months, from the date at which the company is entitled to commence business, hold a general
meeting of the members of the company, which shall be called "the statutory meeting".

(2) The directors shall, at least twenty-one days before the date on which the meeting is
held, forward a report, in this Ordinance referred as "the statutory report", to every member.

(3) The statutory report shall be certified by not less than three directors, one of whom
shall be the chief executive of the company, and shall state-
(a) the total number of shares allotted, distinguishing shares allotted otherwise
than in cash, and stating the consideration for which they have been allotted;
(b) the total amount of cash received by the company in respect of all the shares
allotted;
(c) an abstract of the receipts of the company and of the payments, made thereout
up to a date within seven days of the date of the report, exhibiting under
distinctive headings the receipts of the company from shares and debentures
and other sources, the payments made thereout, and particulars concerning
the balance remaining in hand, and an account or estimate of the preliminary
expenses of the company showing separately any commission or discount
paid or to be paid on the issue or sale of shares or debentures;
(d) the names, addresses and occupations of the directors, chief executive,
secretary, auditors and legal advisers of the company and the changes, if any,
which have occurred since the date of the incorporation;
(e) the particulars of any contract the modification of which'is to be submitted to
the meeting for its approval, together with the particulars of the modification
or proposed modification;
(f) the extent to which underwriting contracts^ if any, have been carried out and
the extent to which such contracts have not been carried out, together with the
reasons for their not having been carried out; and
(g) the particulars of any commission or brokerage paid or to be paid in
connection with the issue or sale of shares to any director, chief executive,
secretary or officer or to a private company of which he is a director.

(4) The statutory report shall also contain a brief account of the state of the company's
affairs since its incorporation and the business plan, including any change or proposed
change affecting the interest of shareholders and business prospects of the company.

(5) The statutory report shall, so far as it relates to the shares allotted by the company,
the cash received in respect of such shares and to the receipts and payments of the company,
be accompanied by a certificate of the auditors of the company as to the correctness of such
allotment, receipt of cash, receipts and payments.

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(6) The directors shall cause at least five copies of the statutory report, certified as
aforesaid, to be delivered to the registrar for registration forthwith after sending the report to
the members of the company.

(7) The directors shall cause a list showing the names, occupations, nationality and
addresses of the members of the company, and the number of shares held by them
respectively, to be produced at the commencement of the meeting and to "remain, open and
accessible to any member of the company during the continuance of the meeting.

(8) The members of the company present at the meeting shall be at liberty to discuss any
matter relating to the formation of the company or arising out of the statutory report, whether
previous notice has been given or not, but no resolution of which notice has not been given in
accordance with the articles may be passed.

(9) The meeting may adjourn from time to time, and at any adjourned meeting any
resolution of which notice has been given in accordance with the articles, either before or
after the original meeting, may be passed, and an adjourned meeting shall have the same
powers as an original meeting.

(10) If a petition is presented to" the Court in manner provided by Part XI for winding up
the company on the ground of default in filing the statutory report or in holding the statutory
meeting, the Court may, instead of directing that the company be wound up, give directions
for the statutory report to be filed or a meeting to be held, or make such other order as may be
just.

(11) In the event of any default in complying with the provisions of any of the preceding
sub-sections, the company and every officer of the company who knowingly and willfully
authorises or permits such default shall be liable.-

(a) if the default relates to a listed company, to a fine not less than ten thousand
rupees and not exceeding twenty thousand rupees and in the case of a
continuing default to a further fine not exceeding two thousand rupees for
every 4ay after the first during which the default continues; and
(b) if the default relates to any other company, to a fine not exceeding five
thousand rupees and in the case of a continuing default to a further fine not
exceeding two hundred rupees for every day after the first during which the
default continues.
(12) This section shall not apply to a private company but -if any such private company is
converted into a company of either of the classes mentioned in sub-section (1), this section
shall become applicable thereto and a reference in that sub-section to the date of
commencement of business shall be construed as a reference to the date of such conversion.

'[(13) The provisions of this section shall not apply to a public company which converts itself
from a private company after one year of incorporation.]

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CONTENTS OF STATUTORY REPORTS

 Name of Company
 Presented
 Nominal share capital
 Date of notice of holding statutory meeting
 Date of the meeting
 Place where meeting is to be held
 Director's report to the members
 Shares allotted and cash received.
 Abstract of receipts and payments
 Preliminary expenses as estimated
 Preliminary expenses actually incurred on
 Law charges
 Printing expenses of Memorandum and Articles.
 Stamp and Registration fees
 Advertisement.
 Commission on issue or sale of shares/redeemable capital/debentures.
 Discount on issue or sale of shares/redeemable capital/debentures.
 Other initial expenses (to be specified).
 Name, addresses and occupations of the Directors, Chief Executive Secretary, Auditors and Legal
Advisers of the Company and the changes, if any, which have occurred since the date of the
incorporation; 4).Name, addresses and occupations of the Directors, Chief Executive Secretary,
Auditors and Legal Advisers of the Company and the changes, if any, which have occurred since
the date of. the incorporation.
 Particulars of any contract the modification of which is to be submitted to the meeting for its
approval together with the particulars of the modification or proposed modification.
 The extent to which underwriting contract if any, has been carried out, if contract not carried out
fully, extent to which it has not been carried out and reasons therefore.
 The particulars of any commission or brokerage paid or to be paid in connection with the issue or
sale of shares to any director, chief executive, secretary or officer or to a private company of
which he is director.
 Brief account of the Company's affairs since its incorporation and the business plan, including
any change affecting the interest of shareholders and business prospects of the company.
 Application: A public company is required to hold a statutory meeting once in its life.
 Time of Holding by New Company: The statutory meeting is held within period of not less than 3
months and not more than 6 months from the date of commencement of business by the public
company.
 Time of Holding by Converted Company: A public company which is converted from private
company is required to hold statutory meeting within period of not less than 3 months and not
more than 6 months from the date of conversion.
 Convening Authority: The- Statutory Meeting is convened by shareholders only and cannot be
requisitioned. In case of non-holding of a Statutory Meeting, the registrar may give direction
under section 170 of the Companies Ordinance to hold over-due Statutory' Meeting.
 Board Meeting: The Board of Directors considers and approves Statutory Report and decides to
convene the Statutory Meeting.
 Agenda: The statutory meeting has one point agenda i.e. to discuss and approve the Statutory
Report.
 Purpose: The main purpose of the statutory meeting is the approval of allotment of shares, receipt
and payment of moneys, expenditures especially the capital expenditures and contracts
particularly about underwriting agreements and commission paid. The company also apprises the
shareholders about the future plan of the company.

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 Discussion: The chairman moves a motion to discuss the Statutory Report and allows the
members to discuss any matter relating to the formation of the company arising out of Statutory
Report.
 Voting: On conclusion of discussion, the chairman moves the motion to vote for approval of the
Statutory Report and declares result.
 Other Business: Other business can be discussed in the Statutory Meeting. However, such
matter are required to be specified in the notice and statement of material facts in terms of section
160(l)(b) is required to be stated.
 Adjournment: The chairman may, with the consent of the members, adjourn the Statutory
Meeting to such time and place as may be decided in that meeting.
 Minutes: The minutes of the Statutory Meeting are recorded in the Minute Book of the general
meeting and signed.
 Private companies converted into public companies: Private companies which are converted into
public companies are also required to hold a statutory meeting within 3-6 months from date of
conversion. But this provision will not be applicable if a private company converts into public
company after one year of incorporation.
 Consequence of Non-holding of AGM: Consequences of non-holding of Statutory Meeting are:-

(i) Penal action under section 157(11).

(ii) Direction of registrar for holding over-due AGM under section 170.
(iii) In case of non-holding of Statutory Meeting or non-delivery of Statutory Report,
proceedings of winding up can be initiated under section 305

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 Lecture - 8

Annual General Meeting (sec. 158)

158. Annual general meeting. –

(1) Every company shall hold, in addition to any other meeting, a general meeting, as its
annual general meeting, within eighteen months from the date of its incorporation and thereafter
once at least in every calendar year within a period of 2[three] months following the close of its
financial year and not more than fifteen months after the holding of its last preceding annual
general meeting:
Provided that, in the case of a listed company, the Commission, and, in any other case, the
registrar, may for any special reason extend the time within which any annual general meeting,
not being the first such meeting, shall be held by a period not exceeding '[thirty] days.

(2) An annual general meeting shall, in the case of a listed company, be held in the town in
which the registered office of the company is situate:

Provided that the Commission, for any special reason, may, on the application of such company,
allow the company to hold a particular meeting at any other place.

(3) The notice of an annual general meeting shall be sent to the shareholders at least twenty-
one days before the date fixed for the meeting and, in the case of a listed company, such notice,
in addition to its being dispatched in the normal course, shall also be published at least in one
issue each of a daily newspaper in English language and a daily newspaper in Urdu language
having circulation in the Province in which the stock exchange on which the company is
listed is situate.

(4) If default is made in complying with any provision of this section, the company and
every officer of the company who is knowingly and willfully a party to the default shall be
liable,-
(a) if the default relates to. a listed company, to a fine not less than '[twenty]
thousand rupees and-not exceeding 2[fifty] thousand rupees and to a further
fine not exceeding two thousand rupees for every day after the first during
which the default continues; and
(b) if the default relates to any other company, to a fine not exceeding 3[ten]
thousand rupees and to a further fine not- exceeding 4[five] hundred rupees
for every day after the first during which the default continues.

MINUTES OF PROCEEDINGS OF ANNUAL GENERAL MEETING

MINUTE BOOK
Minute of meeting of Board of Directors / Annual General Meeting / Extra-ordinary
General Meeting held on ———————————— at —————— AM / PM at
——————
Attendance (separate attendance register can be used) sent in Person:
Folio No. Name Signature

Present through Proxy:

Folio Name of Proxy Proxy Holder Folio No Signature
No

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Representatives of member companies / other bodies:

Folio No. Name of Company/ Name and designation Signature

Organization of Representative

Proceedings Resolution
1. The meeting started with recitation from the Holly Quran Resolved that:-
2. Mr. Ali, the chairman of the BOD, chaired the meeting and
declared the meeting in order. 1. the minutes of last meeting held _____ be approved.
3. The secretary presented the minutes of the last meeting for 2. the annual accounts i.e balance sheet as on 30" June and profit
approval. and loss accounts for year ended 30 June ___ together with
4. Mr. Abid (Folio No 312) proposed for approval of the reports of auditors and directors be approved.
minutes and Mr. Asghar (Folio No. 424) seconded the
proposal. There being no objection from the house, the
minutes stood approved.
The chairman presented second point on agenda relating to
Consideration and approval of annual accounts i.e. balance sheet
as on 30 June tended 30th June ____and profit and loss
accounts for together with reports of directors and auditors. He
suggested that the accounts and reports be taken as read.

6. Mr. Bakar (Folio No. 511) pointed out that ______________. 3. M/s Farooq and Co, Chartered Accountants be appointed as
7. Mr. Babar the finance director replied to the observation auditors of the company for year ended 30th June _________ at
stating that ______________________. the remuneration of Rs. 50,000 per annum without of pocket
8. Mr. Chaudhry (Folio No. 63) proposed for approved of the expenses'.
annual accounts together with the reports of auditors and
directors to which Mr. Ditta (Folio No. 386) seconded. There
being no observation, the accounts and reports were approved
manimously.

9. The Chairman took the next matter on the agenda, proposing

appointment of M/s Farooq and Co, Chartered Accountants as
auditors of the company for next year at the remuneration of Rs.
50,000 per annum with out of pocket expenses.

10. Mr. Yawar (Folio No. 433) seconded the proposal which
was challenged by four members.
11. The Chairman decided to put the motion for appointment of
auditors before the members for their voting through show of
hands. Out of 44 members present in person, 34 supported the
resolution whereas 6 opposed and 4 abstaned from the voting.
12. The chairman declared that resolution for appointment of
M/s Farooq and Co, Chartered Accountants as auditors of the
company for next year at the remuneration of Rs. 50,000 per
annum with 'out of pocket expenses' carried with majority vote.
13. There being no other matter on the agenda, the meeting
concluded with vote of thanks to the chair.

Dated: Signatures of Signatures of

Company Secretary Chairman

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159. Calling of extraordinary general meeting. –

(1) All general meetings of a company, other than the annual general meeting referred to
in section 158 and the statutory meeting mentioned in section 157 shall be called
extraordinary general meetings.

(2) The directors may at any time call an extraordinary general meeting of the company
to consider any matter which requires the approval of the company in a general meeting, and
shall; on the requisition of members representing not less than one-tenth of the voting powers
on the date of the deposit of the requisition, forthwith proceed to call an extraordinary general
meeting.
(3) The requisition shall state the objects of the meeting, be signed by the requisitionists
and deposited at the registered office of the company, and may consist of several documents
in like form, each signed by one or more requisitionists.

(4) If the directors do not proceed within twenty-one days from the date of the requisition
being so deposited to cause a meeting to be called, the requisitionists, or a majority of them
in value, may themselves call the meeting, but in either case any meeting so called shall be
held within three months from the date of the deposit of the requisition.

(5) Any meeting called under sub-section (4) by the requisitionists shall be called in the
same manner, as nearly as possible, as that in which meetings are to be called by directors.

(6) Any reasonable expense incurred by the requisitionists by reason of the failure of the
directors duly to convene a meeting shall be repaid to the requisitionists by the company, and
any sum so repaid shall be retained by the company out of any sum due or to become due
from the company by way of fees or other remuneration for their services to such of the
directors as were in default.

(7) 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 manner provided for in sub-section (3) of section 158:
Provided that, in the case of an emergency affecting the business of the company, the
registrar may, on the application of the directors, authorise such meeting to be held at such
shorter notice as he may specify. . .

(8) Every officer of the company who knowingly or willfully fails to comply with any of
the provisions of this section shall be liable,-

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(a) if the default relates to a listed company, to .a fine not less than ten thousand
rupees and not exceeding twenty thousand rupees and in the case of a
continuing default to a further fine which may extend to two thousand rupees
for every day after the first during which the default continues; and

(b) if the default relates to any other company, to a fine which may extend to two
thousand rupees and in the case of a continuing default to a further fine which
- may extend to two hundred rupees for every day after the first during which
the default continues.

EXTRAORDINARY GENERAL MEETING

 Extraordinary General Meeting. A general meeting, other than the annual general meeting and
the statutory meeting is called extraordinary general meetings.
 Convening of Extraordinary General Meeting. The directors can at any time call an
extraordinary general meeting to consider any matter which requires the approval of the
shareholders in a general meeting.
 Requisitioning the Extraordinary General Meeting.,
Members representing atleast 10% voting powers can requisition an extraordinary general
meeting.

o The directors are required to proceed to call an extraordinary general meeting forthwith
on the requisition.
o Agenda: Agenda of requisitioned meeting is provided by the requisitionists.
o Notice, agenda and other documents, signed by the requisitionists are deposited at the
registered office of the company.
o Defect in the requisition: In case there is defect in the requisition, the company is
required to send suitable reply to the requisitionists, pointing out the defects, forthwith.
o Calling of Meeting by the Requisitions: The requisitionists can call the meeting if_ the
directors do not proceed to call the EGM within 21 days from the date of the requisition.
But such meeting 'must be held within three months from the date of the deposit of the
requisition.
o Manner of Calling the EGM: EGM called by the requisitionists is called in the same
manner as if it is called by directors.
o Reimbursement of Expenditure: Any reasonable expense incurred by the requisitionists
is repaid to the requisitionists by the company.
 Board Meeting: Directors considers the items on agenda of the EGM and approves, in case
convened by them. Draft notice is also approved and secretary is authorised to issue the notice.
Date, time and place of EGM are also decided.
 Notice: A 21 days notice alongwith copies of proposed special resolution with statement of
material facts are furnished to the members, directors and auditor of the company.
 In case of listed companies, notice is published in one English and one Urdu newspaper having
circulation in the province in which stock exchange on which the company is listed, exists.
 Calling of Extra Ordinary Meeting at Shorter Notice. The registrar may permit to call an extra
ordinary general meeting at shorter notice than 21 days on an application by the company.
 The application stating the reasons for calling the meeting at shorter notice is furnished to the
registrar in duplicate alongwith affidavit and Bank branch of HBL) of Rs. 500 being application
fee.
o A copy of the application is furnished to the Company Registration Office.
o According to provisions of Section 2 (36) of Companies Ordinance, 1984, an
extraordinary-general meeting called at shorter notice is required to be attended by all
the members. Hence, the registrar ensures while granting permission to hold
extraordinary general meeting at shorter notice, that it should be attended by all the
members.

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 Closure of Books: Notice is given for closure of books (i.e. register of members and transfer
books) in terms of section 151. In case of listed company, such notice is published mostly in shape
of note to the notice of EGM.
 Stock Exchange: In case of listed company, intimation of holding of Board of Directors' meeting
and extra-ordinary general meeting with notice containing the agenda is given to the Stock
Exchange in accordance with listing regulation.
 Place of Meeting: Extra-ordinary General Meeting, in case of listed company, is held in the town
where the registered office of the company is situate. However, the Commission may, under special
circumstances, allow a company to hold the general meeting at some other place
 Arrangement for Meeting: Arrangement for general meeting are checked and ensured that chairs,
mike, lighting, tea, recording of proceedings, attendance slips, poll papers etc are ready..
 Inspection: Register of members, proxies etc are made ready for inspection by the members at the time
of general meeting.
o Minutes: Minutes of the proceeding of the EGM are recorded in the Minute Book.
AGENDA

No specific agenda is prescribed in Law.

Required to be specified in the notice by the directors/ requisitionists.
Mostly held for urgent business.

Documents/ Statutory Returns:

1. Minutes of the BOD Meeting/ EGM are record in minute book.

2. IN case of passing of special resolution in the EGM, copy of special resolution on Form 26 is filed with
the registrar concerned within 15 days of the date of EGM.

Conduct of Meeting

1. Members attending the general meeting, sign attendance against their names and folio no.
2. After ensuring quorum (see section 160), chairman starts the proceedings.
3. Notice of meeting is read or taken as read.
4. Minutes of the previous general meeting are read or taken as read and approved.
5. Resolutions relating -to businesses are moved separately, seconded, voted upon and results are
declared.

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NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the _______________ Annual General Meeting of Az Ltd., shall be held on
___________ day, ______________ 2009 at ______AM at Mill Office _________________ to transact the
following business:-

1. To confirm the minutes of the last annual general meeting held on _______________.
2. To receive and adopt the audited annual accounts of the Company for the year ended
_______________ together with the reports of directors and auditors thereon.
3. To appoint auditors of the company for the year ending ________________ and to fix their
remuneration.
4. To elect _____ directors as fixed by the Board under section 178(1) of the Companies
Ordinance, 1984 for a period of three years commencing from _______________. The names
of retiring directors are as under:-

____________________
____________________
____________________
____________________
____________________

5. To transact any other business which may be brought forward with the permission of the
chair.

BY ORDER THE BOARD

AZ KHAN
Company Secretary
Place: __________
Date: ___________

NOTES:

1. The share transfer books of the company shall remain closed from ______________ to
_____________ (both days inclusive).
2. A member entitled to attend and vote at the annual general meeting may appoint another
member as his/her proxy to attend and vote on his/her behalf. Proxies to be effective must be
received by the company not less than 48 hours before the meeting.
3. Any person who seeks to contest the election to the Office of Directors, shall file at the
Registered office of the Company, not later than 14 days before the day of meeting, a notice
of his/her intention to offer himself/herself for election as Director in terms of Section 178(3)
of the Companies Ordinance, 1984.
4. Members are requested to notify immediately changes in their address, if any.

Agenda of the Annual General Meeting:

1. To consider and approve balance, sheet, profit and loss accounts and the reports of the directors
and auditors,
2. To consider and declare dividend,
3. To appoint auditors and fix their remuneration,
4. To elect directors, and
5. To do any other business.

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