CORPORATE LAWS AND ICMA SECRETARIAL PRACTICES [G4] fi GRADUATION LEVEL ue Pakistan FALL 2017 EXAMINATIONS Friday, the 23rd February 2018 Time Allowed: 02 Hours 50 Minutes Maximum Marks: 90 Roll No. @_Attompt all questions (i) Wete your Roll No. in the space provided above Gi) Answers must be neat, relevant and brie. It's not necessary to maintain the sequence. (iv) Read the instructions printed inside the top cover of answer script CAREFULLY before attempting the paper () In marking the question paper, the examiners take into account clarity of exposition, logic of arguments, effective presentation and language. (v) 00 NOT write your Name, Reg. No. or Roll No,, or any irrelevant information inside the answer scrip. (ui) Question No. 1 ~"Muliple Choice Questions" printed separately, isan integral pat ofthis question paper. (vil) Question Paper must be retumed to invigilator before leaving the examination hall. ED Question No. 2 Proposed Time : 30 Min. | Total Marks : 16 (a) As per Section 153 of the Companies Act, 2017, under what circumstances a person can become director although he/ she is not a member of the company? 04 (b) Mr. Fareed, an industrialist, has 2 million shares in an unlisted company, CBA & Company, and he was also on its Board. He nominated his brother Mr. Furqan as nominee for his Central Depository Company (CDC) account. Mr. Fareed died subsequently. Required: In view of the requirements of transfer to nominee of a deceased member under Section 79 of the Companies Act, 2017, describe whether his brother Mr. Furgan can encash these shares and own whole amount so realized on selling such shares, 04 (c) Mr. Salman has dual citizenship, one for Pakistan and another for United Kingdom (UK). He is Classified as substantial shareholder of Jinnah Textile Mills Limited based in Lahore, He is residing in London and has also shareholding in a foreign company in UK. Required: Describe the duties in this regard of Mr. Salman and Jinnah Textile Mills Limited in the light of the Companies’ Global Register of Beneficial Ownership under Section 452 of the Companies Act, 2017. 08 Question No. 3 Proposed Time : 30 Min. | Total Marks : 16 {a) As per Section 27 of the Companies Act, 2017, specify the clauses of Memorandum of Association of company limited by shares. 06 (b) As per section 154 of the Companies Act, 2017, what are the requirements for minimum number of directors of different type of companies, and can a company become a director? Is. female representation necessary on the Board of a private company, which is classified as large company as per Third Schedule of the Companies Act, 20172 04 (0) At the meeting of Board of Directors of Salman Chemicals Limited (SCL), a listed company, a resolution was unanimously passed by all the directors awarding a construction contract to Star Constructions (Private) Limited in which Mr. Ismail (a director of SCL) holds 60% shares. He has not disclosed his interest in Star to any Board member of SCL. Required: What are the disclosure requirements for Mr. Ismail under Section 205 of the Companies Act, 20177 04 ccusp-rav 2017 10f3 PTO(d) Mr, Khan who is an independent director of OBGD Oil Company Limited, where govemment’s shareholding is 51% and itis not listed on Pakistan Stock Exchange Limited (PSX). In the light of Section 181 of the Companies Act, 2017, ‘protection to independent and non-executive directors’, explain whether or not Mr. Khan will be held liable in respect of any such act or omission’ by the company for which he was not informed through Board process and his consent was also not taken. Question No. 4 Proposed Time : 30 Min. | Total Marks : 15 {a) Under Section 293 of the Companies Act, 2017, state the modes of winding up and also circumstances under which a company may be wound-up voluntarily in the light of Section 347. (b) Haroon Limited (HL) has passed a special resolution in an extraordinary general meeting (EGM), whereby all the preference shares issued by HL are to be converted into ordinary shares. Some preference shareholders are not satisfied with the said conversion and seek your advice with respect to the remedy available to the preference shareholders after the said conversion Required: Under Section 59 of the Companies Act, 2017: () Explain the conditions under which the aggrieved shareholders may approach the Court. (ii) What decision may be taken by the Court and what remedy is available to the aggrieved shareholders in case they are not satisfied with the decision of the Court? (©) In the light of Prudential Regulation for Corporate Govemance, G-4 ‘Credit Rating’ issued by the State Bank of Pakistan (SBP), discuss the following () Whether it is mandatory for all banks/ development financial institutions (OFIs) including foreign banks to have themselves credit rated by a credit rating agency? (ii) Under what time period, all banks! DFis are required to get updated the credit rating? Also discuss how and when credit rating is disclosed to public. Question No. 5 Proposed Time : 30 Min. | Total Marks : 15 {a) Narrate the provisions related to notice of general meeting as specified in the Companies E-Voting Regulations, 2016. (b) Yamin Sugar Mills Limited is a listed company at Pakistan Stock Exchange Limited (PSX). Its sponsors have 97% holding in its shares and 3% shares are held by minority shareholders, Face value of each share is Rs. 10 whereas, market value as on December 15, 2017 is Rs. 70 er share. Required: ‘The Board of Directors wants to apply for voluntary de-listing, in this connection, you are appointed as a consultant to advice the following in the light of Listing of Companies and Securities Regulations contained in the Rule book of PSX: (i) Rules for offering minimum price to all minority security holders. (i) Whether approval in general meeting of the company is necessary or not for voluntary delisting and, if yes, how much percentage of the security holders must be present in person or by proxy at such general meeting? (©) Under the Public Offering (Regulated Securities Activities Licensing) Regulations, 2017, ‘Banker to an Issue’ is a scheduled bank licensed by the Commission. Discuss any four functions to be performed by such bank. cuse-Fet 2017 20f3 Marks 02 03 02 03 03 04 04 05 02 04Question No. 6 Proposed Time : 25 Min. | Total Marks : 15 (a) Under what circumstances, the registrar can appoint an administrator to take over and manage the modaraba in place of the modaraba company under the Modaraba Companies & Modaraba (Floatation & Control) Ordinance, 1980. {b) Danish Textile Mills Limited is listed on Pakistan Stock Exchange Limited (PSX). Its subsidiary Hadia Spinning Limited has recently issued @ prospectus for public issue of shares. However, before the subscription date, the company's directors have been arrested by the National Accountability Bureau (NAB) for a major scam, ‘The Company Secretary of Danish Textile Mills Limited believes that the disclosure of the above information would affect the market price and public interest. Required: Your advice is sought for the information required for disclosure of price sensitive information to protect the investor under Section 96 of the Securities Act, 2015, {c) Under the Companies Act, 2017, who may not be appointed as a legal adviser of company? Question No. 7 Proposed Time : 25 Min. | Total Marks : 13 (a) Assume that the 64" annual general meeting (AGM) of Jamal Textiles Limited is scheduled to be held on Saturday, March 31, 2018 at 09:00 a.m. at the registered office of the company situated at Jamal House, Shahrah-e-Faisal, Karachi. Mr. Raza recently joined Jamal Textiles Limited as an Assistant Company Secretary. Mr. Zahid, the Company Secretary provided him a note dictated by the Chairman of the Board and asked him to draft a notice of 64" AGM on the basis of such note, The note contains the following decisions taken in the Board meeting for consideration and approval in the forthcoming AGM: (Annual audited accounts of the company for the year ended December 31, 2017 along with auditors’ and directors’ report will be presented for approval. (ii) The Board of Directors has recommended a declaration of 40% cash dividends in their Board meeting, which will be presented before the members for consideration and approval (ii) The directors of the company have proposed the name of ABC & Co. to be appointed as auditor of the company for the year ending December 31, 2018. The Board further decided that the remuneration of the auditors will be Rs. 600,000 per annum. (iv) The Board will also take approval of the members for investment of Rs. 50 milion in share capital of Jamal Foods (Pvt) Limited, an associated undertaking under Section *199 of the Companies Act, 2017. *Note: Section 199 of the Companies Act, 2017 pertains to ‘investment in Associated Companies and Undertakings’ Required: Draft a notice for the annual general meeting (AGM) as per the Companies Act, 2017 along with resolution Hint: Examines are not required to provide statement under Section 134(3) of the Companies Act, 2017 and notes, (b) E-Services is a 24/7 available portal developed by the Securities and Exchange Commission of Pakistan (SECP) to facilitate the users in reservation of name, incorporation of companies, fling of specified forms and related documents. In this regard, answer the following (i) Who can register as a user of the E-Services? (ii) How to apply for user registration and what is the user registration fee? THE END ccusp-rav 2017 30f3 Marks 04 08 03 08 03 02