Required:

Advise as to the factual position in light of the Companies Act 2017. Marks 04

Question 03. (A)

Naseer Leasing limited is a duly licensed NBFC. The NBFC is engaged in providing the leasing finance
facilities to its customers. The extracts from the balance sheet of the company show the following:
Description Amount in Comments
millions
Paid-up share capital 1,000 Shares were issued against the
100 million ordinary shares of Rs. 10/- each premium which has been offset
as per the requirements of the
Companies Act 2017
Accumulated Profits 800
Loans treated as subordinated loans 500
Revaluation surplus 200 Revaluation of the assets was
carried out two years ago.
50 million, 10% convertible Certificates of Deposits 500
(Assume the minimum equity requirement for the company at 1 billion Rupees.)
A. NLL had already provided vehicle leasing financing to Akbar Associates private limited to the tune
of 295 million rupees. Akbar Associates have now requested for another leasing facility to
support the purchase of machinery by Akbar Associates, the total amount of financing required is
Rs. 50 million.
B. The company has a subsidiary namely Hasrat Limited (HL). HL has already obtained financing from
the company amounting to 300 Million. The company is planning to grant more leasing facility
amounting to Rs 65 Million to HL.
C. NLL is contemplating to purchase 25 million shares at Rs. 10/- per share of Chiragh Limited (CL),
which is an un-listed company. The company used to be subsidiary of NLL in past but sold certain
shares of CL to one of its associated company and NLL now only owns 30% shares in CL.

Advise as to whether or not such financings can be granted by NLL keeping in view the rules and
regulations related to NBFC issued by the Securities & Exchange Commission of Pakistan. Marks 12
Question 03. (B)
Iqbal Limited, IL has to conduct election of directors in the upcoming Annual General Meeting. The
directors have decided that the number of directors for the next term shall be 9 and the chief executive,
who is already working as a chief executive shall be considered for re-appointment. Chief executive, Mr.
Mehmood, is expert in sales and marketing and is in the employment of the company working for last 5
years with the company.
Two independent directors Mr. Ahmad and Mr. Faheem have been identified by the nomination
committee who are consented to act as directors in the company. Independent directors are not from
any finance studies back ground.
NIT is a major shareholder in the company and they have shown their willingness to continue Mr. Saeed
and Mr. Saad (having sales and marketing background) as their nominee on the Board of the company