The Institute of Corporate Secretaries of Pakistan, January 2013 Page 1 of

2
THE INSTITUTE OF CORPORATE SECRETARIES OF PAKISTAN
CIS EXAMINATION JANUARY 2013
M ODULE C P A P E R : S E C R ETA R IAL P R A CTICE A N D A U DIT G RO U P VI
Time !!"#e$ 3 H"%&' M() M&*': 100
I+',&%-,i"+': Attempt all questions
SECTION . 1 SECRETARIAL PRACTICE /00 M&*'1
M&*'
Q1. The Board of Directors of Universal (Private) Limited (UPL) a private compan!,
intends to o"tain a loan of ten million rupees from #lo"al Limited (#L) a listed
compan!. The loan $ould "e repa!a"le in t$o !ears and $ould carr! interest at the
rate of t$elve per cent per annum. The %&' of #L is also on the Board of Directors
of UPL and is its ma(or shareholder.
Re2%i&e$:
Assumin) !ou are the %ompan! *ecretar! of #L, descri"e the requirements of
%ompanies 'rdinance, 1+,- that should "e complied $ith "! the Board of Directors
of #L in respect of the proposed loan to UPL. /031
Q.. /uhair and /u"air are mem"ers as $ell as the directors on the Board of A"eera
(Private) Limited and each of them hold 001 of the share capital. 'n Au)ust .,
.211 /uhair died in an accident in London $hile he $as on a "usiness visit.
3o$ever his shareholdin)s could not "e transferred to his nominated le)al heirs as all
of them $ere minors. /u"air continued to carr! on the "usiness of the compan!. 4n
5arch .21. the compan! incurred heav! losses and could not meet its de"t
o"li)ations. /aheer a creditor of the compan!, intends to ma6e /u"air personall!
responsi"le for the pa!ment of the amount o$ed to him "! A"eera (Private) Limited.
Re2%i&e$:
7arrate the provisions of the %ompanies 'rdinance, 1+,- $hich are relevant to the
a"ove issue and discuss the a"ove situation in the conte8t of those provisions. /041
Q9. The mana)ement of 3ue :orld (Pvt.) Limited and %r! :orld (Pvt.) Limited intend to
enter into a (oint venture a)reement under $hich the! $ould implement a seaside
holida! resort pro(ect. 3o$ever the %ompan! *ecretar! has informed that the
5emorandum of Association of %r! :orld (Pvt.) Limited does not authori;e the
%ompan! to enter into a (oint venture a)reement.
Bein) the %ompan! *ecretar!, descri"e the procedure that $ould have to "e follo$ed
"! %r! :orld (Pvt.) limited for ma6in) the necessar! amendments in its
5emorandum of Association. (12)
Q-. AAA Plastics Limited is a $holl! o$ned su"sidiar! of a forei)n compan! and has its
re)istered office in <arachi.
a) Please list the "oo6s of account the compan! is required to maintain. /031
") *tate the conditions $hich the directors shall "e required to compl! $ith if the!
$ant to 6eep the "oo6s of account at AAA=s factor! located in Lahore. /021
Q0. a) Descri"e the restrictions that have "een mentioned in the %ompanies 'rdinance 1+,-
$ith respect to the selection of names of companies. /041
") Ta( Limited has received securit! deposits from its customers. Descri"e the provisions
of the %ompanies 'rdinance, 1+,- $hich Ta( Limited is required to compl! $ith in
respect of such deposits. /051
Q>. Alpha, Bravo and %harlie (AB%) commenced its "usiness t$o !ears a)o $ith a paid
up capital consistin) of ,2 million ordinar! shares of ?s. 12 each. 'n 7ov. 19 .21.
the "oard of directors decided to issue ri)ht shares at a discount of ?s. 1.02 per share.
Assume !ou are the %ompan! *ecretar!, narrate the provisions contained in the
%ompanies 'rdinance, 1+,- $hich AB% $ould need to compl! $ith for issuance of
ri)ht shares at discount. /101
Q@. a) &8plain the term AParticipantB as defined under %entral Depositor! Act 1++@. /031
") The *ecurities of Times Pac6a)es Limited (TPL) are re)istered in the name of %entral
Depositor! %ompan! (%D%). List the steps $hich the %D% $ill have to ta6e $here a
"onus issue is declared "! TPLC /001
Q,. The prospectus of D% Te8tiles Limited included a statement $hich $as misleadin) in
its form and content. 'n the faith of the prospectus and "elievin) it to "e true, Asif
su"scri"ed for shares and sustained losses. %an Asif file a suit for compensation of the
loss incurred "! himC 4f so $ho ma! "e sued for such a lossC /001
Q+. There are alle)ations in the press and serious char)es have "een levelled a)ainst
*h!na Petroleum Limited a"out misuse of pu"lic funds "! the mana)ement. ?u"a"
director of the compan! $ants to inspect the "oo6s of account in order to ascertain
$hether the alle)ations are true. As ?u"a" does not have adequate 6no$led)e of
accountin), she intends to e8amine the "oo6s of account in the presence of his friend
5ariam $ho is a chartered accountant.
Eou are the %ompan! *ecretar! of the %ompan! and required to advise the compan!
in respect of the a"ove matter under the provisions of the %ompanies 'rdinance,
1+,-. /051
SECTION . 2 SECRETARIAL AUDIT /30 M&*'1
Q12. Eour %ompan! seems to issue prospectus for su"scriptions of its shares shortl!. *ince
!ou don=t have an! past e8perience in )ettin) the needed approvals from the
authorities !ou thou)ht it more reasona"le to compile the chec6list no$ than face the
music after$ards.
Re2%i&e$:
%ompile the chec6list of documents for approval of issuance of Prospectus. 5ention
atleast an! ten points. /151
Q11. Differentiate "et$een a pu"lic compan! and a private compan!. 5ention an! ten
points. /151
The Institute of Corporate Secretaries of Pakistan Page 3 of
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THE INSTITUTE OF CORPORATE SECRETARIES OF PAKISTAN
C)I)S EXAMINATION JULY 2012
MODULE C PAPER: SECRETARIAL PRACTICE AND AUDIT GROUP VI
Time !!"#e$ 3 H"%&' M() M&*': 100
I+',&%-,i"+': Attempt all questions
SECTION 6 1 SECRETARIAL PRACTICES / 00 M&*' 1
Q1. a) List the t!pes of %ompanies that could "e formed under %ompanies
5ar6s
'rdinance 1+,-C -
") Briefl! descri"e the mode of formin) a %ompan! under %ompanies
'rdinance 1+,-C ,
Q.. a) Under $hat circumstances a %ompan! ma! alter the o"(ect clauses of its
5emorandum of AssociationC @
") :hat t!pe of resolution $ould "e needed to )ive effect for a"ove
alterationC And $hat $ould "e the timelines for filin) that resolution $ith
the *&%P if an!C 9
Q9. a) :hat po$ers are assi)ned to the directors "! the %ompanies 'rdinance
1+,-C 5ention an! ten of those. 1>
") Under $hat circumstances if at all, an! individual directors can e8ercise
a"ove po$ersC 0
Q-. 5r. Famil Director at 5an)oes Ltd has financial interest in upcomin) e8port
deal $ith traders in 4ran, $here he "ro6ered the deal $ith importers as
commission a)ent. *ince the compan! needs to ma6e strate)ic decision of
enterin) the re)ional mar6et startin) $ith 4ran the %hairman of the Board of
Director called on an emer)ent meetin). :hat are the duties of 5r. Famil as far
as he is interested in the contractual arran)ements to "e entered into $ith the
importersC *ince 5r. Famil has vast e8perience in dealin) $ith re)ional mar6et
pla!ers %hairman has as6ed the %ompan! *ecretar! to ensure 5r. Famil is
ta6en on Board for this si)nificant decision. @
Q0. :hat are the necessar! contents of Director=s report of Pu"lic %ompan! under
the %ompanies 'rdinance 1+,-C .2
SECTION . 2 SECRETARIAL AUDIT / 30 M&*' 1
5ar6s
Q>. Assume that !ou are a %ompan! *ecretar! of a pu"lic limited listed compan! and
the %hief &8ecutive of !our %ompan! as6ed !ou to prepare a re)ulator!
compliance chec6list $ith respect to holdin) .
nd
A#5 and related matters. 10
Prepare a chec6 list accordin)l!.
Q@. Assumin) !ou are a %ompan! *ecretar! of a ne$l! incorporated compan!.
4nformed the %hairman of the Board a"out the procedure to "e follo$ed "! the
%ompan! for appointin) the su"sequent statutor! auditorsC @
Q,. :hat are the *ecretarial functions and le)al o"li)ations of the %ompan!
*ecretar!C ,
(a) :hat is meant "! 5emorandum of AssociationC. .2
(") &8plain clearl! the contents of 5emorandum of Association.
(c) :hat is the importance of the said documentC
. (a) :hat is a prospectusC &8plain its contents. 10
9 :hat are the provisions of the %ompanies 'rdinance $ith re)ard to the 6eepin) of a
?e)ister of directorGs holdin)s the ri)ht of inspection of this re)isterC
- Eour Board of directors are a"out to meet for consideration of annual accounts.
Prepare a report to the "oard detailin) the factors $hich should "e "orne in mind for
recommendin) dividends and transfer of and transfer of profits to reserves..
0 :hat are the main statutor! requirements as re)ards the maintenance of accounts of
10
pu"lic companies under the %ompanies 'rdinance 1+,-C Discuss
> 4ndicate the course of action a %ompan! has to ta6e in the follo$in) circumstancesH
(a)
(")
(c)
At a )eneral meetin) no auditors are appointed or reIappointed. 0
The auditor appointed "! the )eneral meetin) dies "efore the term. 0
The auditor appointed "! the )eneral meetin) resi)ns due to in capacit! "efore the 0
term.
1 (a) *et out the procedure for formin) a private compan! and 20
(") specif! the matters $hich !ou $ould li6e to "e dealt $ith at the first "oard meetin).
. %ertain companies to have secretaries - e8plain.
:rite do$n the qualification and functions of the compan! secretar!.
20
9 :hat is meant "! under$ritin) of securitiesC
#ive the procedure of under$ritin) of securities. &valuate the importance of
under$ritin).
10
- Draft follo$in) resolution of BoardH 10
(a) Adoption of official seal
(") Allotment of shares
(c) Approval of under$ritin) a)reement
Part- B Marks 30
0
:hat matters are to "e considered "efore 4ssue of ri)ht shares "! a listed compan!C 10
>
5aintenance of statutor! "oo6s under the ordinance.
10
Q.No. Secretaria l Practice Ilarks
1. (a) A directors of a compan tendered !is resi"nation. #an t!e Board ref$se t!e resi"nation% (&) As a .2
compan secretar !o' 'o$ld o$ complete t!e proced$re to fill $p t!e cas$al (acanc follo'in" t!e resi"nation of a
director% (c) )!en 'o$ld t!e term of office of t!e director appointed a"ainst cas$al (acanc complete* if t!e Incomin"
director is appointed on No(em&er .0 .212 '!ile t!e o$t"oin" director 'as
elected on Ma .0 .22,.
.. +A S$"ar Mills ,imited* an $nlisted p$&lic compan* !as se(en directors '!o are an- mem&ers of t!e 1.
compan. .ne of t!e directors* Mr. Noor$ddin* plans to sell !is s!ares in t!e
compan.
/o$ are re0$ired to e1plain '!et!er t!e follo'in" are correct2
3e 'ill cease to "e t!e director of t!e compan on t!e date !e seiis all t!e
s!ares4
5!e compan ma appoint anot!er person In !is place for t!e n 1t t!ree
ears4
5!e compan ma contin$e to.r$n t!e &$siness 'it! si1 directors till t!e rie1t ann$al "eneral
meetin".
9. 6!an (P(t) ,imited !as ei"!t s!are!olders eac! of '!om is a director of t!e compan. 5!eir s!are!oldin" is 1.
as $nder2
#+ A 7 8 !old .01 s!ares eac!.
o #, 0, 9 7 : !old 121 s!ares
eac!.
o ; 7 3 !old 01 s!ares eac!.
A* B* #, < and 9 are not satisfied 'it! t!e performance of t!e #9. of t!e compan and 'ant to remo(e
!im &efore the e1pir of !is term of office. A &oard meetin" 'as called for t!is p$rpose. It 'as attended
& t!e a""rie(ed directors onl, '!o passed a resol$tion for remo(al of t!e #9..
In t!e li"!t of t!e rele(ant pro(isions of t!e #ompanies .rdinance* 1+,- o$ are re0$ired
to2 (i) 91plain '!et!er t!e #9. can &e remo(ed in t!e manner as descri&ed a&o(e%
(ii) Propose an ot!er 'a to remo(e t!e #9. if:* ; 7 3 do not 'ant to remo(e !im.
=. )rite s!ort notes on >Bar on appointment of mana"in" a"ents* sole p$rc!ase* sale a"ent etc>. 1>
0. )!at do o$ $nderstand & t!e doctrine of >$ltra (ires? in relation to a compan% )!at are t!e implications 12
of an $ltra (ires act done & a
compan%
@. (a) Mr. A1.!ar* t!e sole proprietor of AA!ar 7 #o. #!artered Acco$ntants* 'as appointed as t!e a$ditor of B/C @
,imited* an $nlisted p$&lic compan* for t!e financial ear endin" +$ne 92 .22+. Mr. AA!ar married Miss.
lsmat* a director of B/C ,imited* on :e&r$ar .9 .22+. 5!e compan secretar of B/C ,imited 'ants to
kno' '!et!er t!e marria"e 'o$ld !a(e an impact on t!e stat$s of Mr. AA!ar as t!e a$ditor of t!e compan.
-.
<isc$ss t!e sit$ation 'it! reference to t!e rele(ant pro(isions of t!e #ompanies .rdinance* 1+,-.
(&) <isc$ss t!e pro(isions of t!e #ompanies .rdinance* 1+,- related to t!e attendance of e a$ditors in t!e D
"eneral meetin" of t!e compan. -
@. .n Marc! 1E* .22, 6arom 5e1tile ,imited recei(ed a notice from a s!are!older of t!e compan nominatin" 10
anot!r3> firm of #!artered Acco$ntants as a$ditors in place f t!e e1istin" a$ditors at t!e ann$al "eneral
meetia" to &e !eld on Marc! 91 .22>. 91plain t!e conditions re0$ired to &e f$lfilled & a mem&er of t!e
compan '!ile makin" s$c! nomination $nder t!e #ompanies .rdinance* 1+,-. Also descri&e t!e
companFs responsi&ilities on recei(in" s$c! notice* to'ards ot!er mem&ers and t!e e1istin" a$ditors of t!e
compan.
1 Set o$t t!e different steps in t!e formation of a p$&lic compan 'it! limited lia&ilit* for G0
promotion to commencement of &$siness* indicatin" t!e doc$ments to &e filed 'it! t!e
He"istrar &efore and after t!e incorporation of a compan.
G (a) 3o' does a person &ecome a mem&er of a +oint Stock #ompan% I
(&) 3o' can a person cease to &e t!e mem&er of compan% ,
3 3o' are t!e a$ditors of a compan appointed%
<isc$ss t!eir d$ties in connection 'it! t!e Ann$al A$dit of a #ompan.
1E
= (a) )!at is a >Hesol$tion & #irc$lation> and !o' is it passed% <escri&e its ad(anta"es.
(&) <raft t!e follo'in"2-
(i) Hesol$tion declarin" interim di(idend
(ii) Hesol$tion appointin" a$ditors
(iii) Hesol$tion on allotment of s!ares
(i() Hesol$tion on appointment of alternate director
12
G.E
G.E
G.E
G.
E
0 (a)
(&)
)!at are t!e restrictions on transfer of s!are of a p$&lic limited compan% @
A mem&er !oldin" E00 s!ares to sell* G00 s!ares to Mr. B and 100 s!ares to Mr. /.
8
91plain t!e proced$re & '!ic! !e can transfer !is s!ares to Mr. B and Mr. /.
@ As secretar of a ne'l formed p$&lic limited compan dra' proced$re of 'ork !andlin" 1E
applications for and makin" allotment of s!ares ass$min" t!at t!e prospect$s !as &een
iss$ed.
.
1
.
9 (a)
. (")
-
Define a %ompan! *ecretar!. 3o$ is he appointedC Dra$ a resolution for the appointment
of a %ompan! *ecretar!.
:hat do !ou understand "! 5emorandum of AssociationC :hat procedure $ould !ou as a
*ecretar! of a %ompan!, adopt to amend the o"(ect %lauseJ of the 5emorandumC
3o$ are the first and the su"sequent directors of a %ompan! appointedC :hat
qualifications are required for appointment as a directorC
3o$ the first and su"sequent chief e8ecutive appointedC
:ho could not "e appointed as chief e8ecutiveC
5ention "riefl! the le)al provisions in the case of a pu"lic limited compan! relatin) to the
follo$in)H
(a) Total num"er of directors
(") Assi)nment of office "! a director
(c) Dillin) of %asual vacancies
(d) ?emoval of directors from office
(e) Appointment of Alternate director
5ar6s
15
15
15
E
0
9
9
9
9
9
0 5r. A a shareholder of a compan! has requested for issuance of duplicate share
certificate. :hat information !ou $ill require to issue a duplicate share certificate to 15
5r. AJ.
@
:hat procedure is required for ?e)istration of 5ort)a)esK%har)es etc "! a %ompan!. 15
I
There are certain matters $hich are reserved for the Board of Directors onl! as
provided under the %ompanies 'rdinance 1+,-. <indl! enumerate and discuss.
. The )roup in $hich !ou are $or6in) the promoters are plannin) to incorporate a %ompan!
and has as6ed !ou to su))est a name. :hat provision !ou $ill consider "efore su))estin) 15
the name. Also draft an application to "e sent to %ommission for availa"ilit! of name.
9 Do !ou thin6 that a %ompan! can issue shares at discount if !es la! do$n the procedure
for issue of shares at discount.
15
=
:rite do$n the full procedure for ?e)istration of 5ort)a)eK%har)es step$ise. 15
0 5r. Afta" Ahmed has "een appointed as a director of !our %ompan! for the first time of
$hich !ou are *ecretar!. :hat particulars !ou $ill requires for filin) $ith re)istrar and 12
for !our record.
> :hat are the statutor! and other "oo6s re)isters and returns a %ompan! is required to
15
maintain.
@ :hat informations are to "e chec6ed in the ?e)ister of %ontracts arr#n+ements and
appointments in $hich directors are interested as required under section .1+ of the 15
'rdinance
15
The *ecurities and &8chan)LC %ommission of Pa6istan has prescri"ed the ?ole and 10
Duties of a %ompan! *ecretar!. :rite do$n the same.
.
:hat documents are to "e provided to the %ommission and the %ompan! 10
?e)istration officeC
9 3o$ does the 5emorandum of Association differ from Articles of AssociationC 12
3o$ can the Articles of Association "e chan)edC
- Distin)uish "et$een Transfer and Transmission of shares. Descri"e the secretarial 10
practice re)ardin) the Transfer of shares.
0 :hat are the po$ers of directors as provided under the %ompanies 'rdinance 10
1+,-C
PA?TI B (92 5ar6s)
> M Eou have "een ne$l! appointed as %ompan! *ecretar! of a listed compan!N "efore 10
(oinin) !ou $ere re)uested "! the chairman of the compan! that chec6 $hether the
previous %ompan! *ecretar! has "een maintainin) all the compan! documents $hat
are tne documents a compan! is required to maintain under the %ompanies
'rdinance 1+,-C
@ :hat are the documents to "e delivered to ?e)ister "! forei)n %ompanies at the 10
time esta"lishment of "usiness in Pa6istanC
(L1)
(")
(c)
G (u)
(OF)
(PH)
9 (o)
ti')
(c)
-
Define 5emorandum of Association. .
:rite do$n the provisions of Nthe 5emorondun) of Association ofttN%ompan!
limit cd "! )uarantee $het her the compan! has a share capital. >
\GKrite do$n the full proccduce for alteration in the 5emorandum of
Association 1.
Could a company c.an issue shares at a discount?
#ive the provisionof the %ompanies 'rdinance to .isHPue shares at discount. 0
Eou have "een as6ed to )uide !our directors ho$ the!can issuc shares at
discount $rite do$n the procedure to issue shares at discount. M 12
It is theH le)al olQlouation of ccoMtain companies to have %ompan! *ccoMetao! .
Vlho &e 1 7"'e -":%8"+ie'9 M M 5
\V7, "&!/:%!i;i-):%,i +' "; "&+8+1< Se-&e,&:9
:hat arc the functions of a %ompan! *ecretor!C 19
:har are the circumstances in $hich a compan! ma! "e $ound up "! %ourtC. 10
PAH5- B (2 5ar6s)
0 :hat arc the sGh.ttutor! "oo6s and returns a listed compan! is required to 10
Mi+,i+9
> The %hainnan of the compan! of $hich !ou Marc *ecretar! has as6ed !ou to 10
chec6 ,7e pro8ies su"mitted durin) the )General meetin) that all the requirements for a
pro8! as required under la$ . M have "een complied $it
h M IG