3.

Meetings and Proceedings (Solutions) Page 741

Ch # 3: Meetings and Proceedings

Q# Solution

Q1* Sec 149 and 151 of Companies Act 2017

(i) Under the Companies Act, 2017 members of a private company or a public
unlisted company (having not more than 50 members), may pass a resolution
(ordinary or special) through circulation. Considering this provision of law, ML
can obtain the members’ approval through circulation if it is not a listed company
and its members are equal to or less than 50.
(ii) Resolution shall be circulated, together with the necessary papers, if any, to all
the members. It shall be signed by all the members for the time being entitled to
receive notice of a meeting. Further, resolution shall be noted at subsequent
meeting of the members and made part of the minutes of such meeting.

The records must be kept at the registered office of the company from the date of
the resolution and shall be preserved for at least 20 years in physical form and
permanently in electronic form.

Q2* Sec 163 of Companies Act 2017

(a) Comments on the observation of auditors and contention of the CFO

According to Companies Act 2017, an abstract of the receipts of the company and
of the payments made up to a date within 15 days of the date of the statutory
report is to be included in statutory report. Since the statutory report is signed by
the chief executive on 20 May 2016 and the amount was paid on 12 May 2016,
therefore, the payment of Rs. 12 million should have been included in the receipts
and payments. Hence, the auditor is correct.

CFO’s contention is not correct as the requirement is to include all payments up to

15 days of the date of signing irrespective of its subsequent status.

(b) The following non-compliances have been noted from the stated situation:
(i) The directors are required to send the statutory report to every member at
least twenty-one days before the date on which the statutory meeting is held.
In this situation, statutory meeting was to be held on 9 June 2016 and the
statutory report of SEL had been certified by CEO on 20 May 2016 which
confirms that there would be a delay in circulation of the report among the
members as the 21 days requirement could not have been fulfilled.
(ii) The statutory report is required to be certified by not less than three
directors, one of whom shall be the chief executive of the company, but in the
given situation, the statutory report had been signed by the CEO, a non-
executive director and the CFO which is a non-compliance under the
provisions of the Companies Act 2017 unless the CFO was also a director of
the company.
3. Meetings and Proceedings (Solutions) Page 742

Q3* Sec 134,146 and Table A Clause 30 of Companies Act 2017

(a) In accordance with the provisions of the Companies Act 2017 the chairman of the
board of directors shall preside as chairman of the meeting and if he is unwilling to
act as the chairman, any one of the directors present may be elected to be
chairman, and if none of the directors is present or is unwilling to act as chairman
the members present shall choose one of their member to be the chairman.
Therefore, the meeting under Saleem’s chairmanship would only be considered
valid if no other directors showed his willingness to act as the chairman.
(b) If AGM is adjourned for 15 days or more, notice of the adjourned meeting shall be
given, as in the case of an original meeting, otherwise, it shall not be necessary for
the company to give any notice of an adjournment or of the business to be
transacted at an adjourned meeting. Therefore, if adjourned meeting is held on 18
June 2016, FEL would have to give notice of the adjourned meeting as in the case
of original meeting.
Further, no business shall be transacted at any adjourned meeting other than the
business left unfinished at the meeting from which the adjournment took place.
Therefore, FEL may appoint auditors of the company but resolution regarding
approval of the loan to associated undertaking cannot be discussed and approved.

Q4* Drafting of Special Resolution

(a) Special resolution passed in the extraordinary general meeting of the shareholders
Haq Limited.
“RESOLVED THAT the company be and is hereby authorized, under and pursuant to
the provisions of Section 88 of the Companies Act 2017 and the Companies (Buy-Back
of Shares) Regulations, 2019, to buy back / purchase, in accordance with the
provisions of the said Section and Rules, upto maximum of 20,000,000 its own issued
ordinary shares of the nominal value of Rs. 10/- each at a purchase price of Rs. 20/-
per share within a period of sixty days from the date on which this resolution is
passed.”
“FUTHER RESOLVED THAT the ordinary shares purchased pursuant to the above
resolution will be cancelled and issued share capital will be reduced by an amount
equal to the aggregate nominal value of the cancelled shares.”
FUTHER RESOVLED THAT the purchased aforesaid by the Company of its own issued
ordinary share shall be made through a tender offer and by notices to the Members of
the Company individually.
“FUTHER RESOLVED THAT the Chief Executive Officer/Company Secretary be and
is/are hereby authorized to take all necessary steps in respect of the above buy-back.”

Q5* Drafting of Special Resolution

To consider and pass the following special resolution with or without modification:
Resolved that approval of the members of the Company be and is hereby accorded to
recommend winding up of the company, through voluntary winding up, as may be
deemed expedient, immediately.
Resolved further that the Chief Executive Officer and Company Secretary be and are
hereby authorized to take any/all action (s) as may be required for the execution
/implementation of the above resolution on behalf of the Company.
3. Meetings and Proceedings (Solutions) Page 743

Q6* Sec 135,137,146 of Companies Act 2017

(a) The directors of the company should have waited for half an hour. The directors of
the company may adjourn the general meeting of the company if within half an
hour from the time appointed for the meeting the quorum is not present and shall
(i) Direct to dissolve meeting, if meeting is called upon requisition of the
member.
(ii) Adjourn the meeting to the same day in the next week at the same time and
place, if meeting is called by the directors.

(b) The proxies deposited before adjournment of the meeting shall stand valid for the
adjourned meeting A proxy shall be entitled to attend and vote instead of member
appointing him and have such rights in respect of speaking and voting at the
adjourned meeting as are available to a member'
(c) Any resolution passed in the adjourned meeting will be as effective as the original
one, provided the notice given in specified manner

Q7* Sec 132 of Companies Act 2017

The decision of the directors of KTL contravenes various provisions of the Companies
Act 2017 as discussed below:
(a) The accounts are being prepared for a 13 month period. For preparation of
accounts for a period exceeding twelve months, prior permission of the
Registrar shall be required'
(b) The accounts are made up to a date earlier than the date of the meeting by more
than four months (or hold its first AGM on or before July 31, 2010). As per the
Companies Act 2017 the accounts shall be made up to a date not earlier than the
date of the meeting by more than four months.

Q8* Sec 146 of Companies Act 2017

The appointment of auditor is made at every annual general meeting of the company
to hold office from the conclusion of that meeting until the conclusion of the next AGM.
Since the AGM was adjourned without discussing the re-appointment of Arif & Co.,
they will continue to hold office till the conclusion of the adjourned AGM.

Q9* Sec 135,137,138,141,142,143 of Companies Act 2017

The various situations given in the question are discussed hereunder:
(i) Proxy is not valid as it was not deposited 72 hours (48 hours plus public
holiday) before the meeting.
(ii) As per the Act a member shall not be entitled to appoint more than one proxy to
attend any one meeting. If any member appoints more than one proxy for any
one meeting and more than one instrument of proxy are deposited with the
company, all such instruments of proxy shall be rendered invalid. Accordingly,
votes casted by Mr. C and D as proxies would be invalid.
(iii) As per the Act, a company which is a member of another company may, by
resolution of the directors, authorize any of its officials or any other person to
act as its representative at any meeting of that other company. Therefore Mr.
Sameer's vote is valid.
3. Meetings and Proceedings (Solutions) Page 744

(iv) As per the Act, at any general meeting, a resolution put to the vote of the
meeting shall be decided on show of hands, unless a poll is demanded. The
concerned shareholders should have demanded a poll before or on the
declaration of the result of the voting by show of hands and not after the
meeting is concluded. Therefore the shareholder's protest is not valid.
(v) As per the Act, if within half an hour from the time appointed for the meeting, a
quorum is not present, the meeting, may either be dissolved or adjourned. since
the quorum was present with in 30 minutes, the meeting is valid.

Conclusion:
In view of the above the resolution would be deemed to have been duly passed
even after if the proxies lodged by the members who were represented by Mr. B
and C are considered invalid as 75% valid votes were casted.

Q10 Sec 137,138 of Companies Act 2017

(a) (i) The proxy is not valid as the same has to lodged at least 48 hours before
meeting time (that was 10:00 am of 10th September)
(ii) Due to filing another proxy form, both the proxies would be invalid as per the
requirements of Companies Act 2017
(iii) If Kamyab Limited has mentioned in its Articles that non member can be proxy
then there is no problem in appointing Javed as proxy
(iv)
 A person appointed to vote and speak on behalf of a member is known as proxy
 Proxy must be a member unless AOA permits.
 Proxy is entitled to all the acts which the original shareholder is entitled to do
himself in meeting including:
- to speak and vote at the meeting;
- to demand a poll;
- to abstain from voting, if poll is demanded.

Sec 152 of Companies Act 2017

(b)
 Minutes books shall be open to inspection by members for at least 2 hours on each
day during the business hours (without charges)
 Members can demand certified copy of minutes of general meeting at any time after
7 days of meeting (prescribed fee)
- Company shall provide him within 7 working days of request.

Q11 Sec 131 of Companies Act 2017

(a)
(i) As per the requirements of the Companies Act 2017:
A private company which is converted into public company within 1 year of
incorporation is required to hold statutory meeting within earlier of
 180 days from date of commencement of business; or
 9 months from the date of its incorporation
Note: Statutory meeting not required if AGM is held before its due date
3. Meetings and Proceedings (Solutions) Page 745

(ii) As per the requirements of the Companies Act 2017:

A private company which is converted into public company within 1 year of
incorporation is required to hold statutory meeting.
Therefore in the above situation it would not be required to hold statutory meeting

(iii) As per the requirements of the Companies Act 2017:

Report should be accompanied by an auditor’s report on
- Allotment of shares
- Cash received against share allotted
- Receipts and Payments account of the company.
(iv) As per the requirements of the Companies Act 2017:
 It Shall be certified by chief executive and at least 1director (for listed company,
also by CFO)
 A copy of report, along with auditor’s report, shall be filed with the registrar
forthwith after sending report to the members.

Sec 132 of Companies Act 2017

(b) Every company except Single Member Company. It is the company secretary who
send notices of the same.

Q12 Sec 55 of Companies Act 2017

(i) As per the requirements of the Companies Act 2017:

Vote of only that member shall be counted who is named first in the register
Therefore only one member can vote

Sec 137 of Companies Act 2017

(ii) As per the requirements of the Companies Act 2017:

 If a company is member of another company, it may authorise any of its officials or
any other person to act as its representative there
 Such representative shall have same powers, which an individual shareholder of
that other company possesses at that meeting.
Therefore there is no restriction in appointment of an ex-employee of the company

(iii) As per the requirements of the Companies Act 2017:

 Proxy form shall be filed at least 48 hours before meeting time
 If a valid proxy instrument (as per table A of Articles) is deposited, company cannot
reject or question its validity
In given scenario the proxy would be invalid and cant exercise the voting power

Q13 Sec 133 of Companies Act 2017

As per the requirements of the Companies Act 2017:
 For unlisted companies, if all members entitled to attend and vote at any EGM so
agree, a meeting may be held at a shorter notice.
3. Meetings and Proceedings (Solutions) Page 746

Q14 Sec 141 to 143 of Companies Act 2017

As per the requirements of the Companies Act 2017:
 Before or on declaring result of voting by show of hands, a poll may be taken by
chairman on his own or may be demanded by persons having at-least 10% voting
power

Therefore Mr Shakeel should demand a poll whenever he wants to use his voting
power. But for this his respective shareholding must be 10% in that company.
Moreover Companies Act 2017 specifies that:
 After polling; chairman or his nominee and a representative of member(s)
demanding poll shall scrutinize results
 Chairman shall declare the result

Q15 Sec 149 and 134 of Companies Act 2017

a) As per the requirements of the Companies Act 2017 (Sec 149); except for the
ordinary businesses, the members of a private company or a public unlisted
company (having not more than fifty members), may pass a resolution (ordinary
or special) by circulation signed by all the members for the time being entitled to
receive notice of a meeting

So in the given situation we are not in a position to use the said section of the
Companies Act 2017 as
 The business under consideration is ordinary business (as per Sec 134);
and
 The company under consideration is a listed company for which this
section is not applicable
Therefore the suggestion of company secretary is not appropriate in given
circumstances

Reg 11 of Postal Ballot Regulations 2018

b) I would be suggesting the company to use the requirements as elaborated in
Regulation 11 of the Companies (Postal Ballot) Regulations, 2018 which are as
follows:

If the number of contestants is more than the number of directors fixed, listed
company shall:
 Send relevant information to members not later than 7 days before general
meeting and the regular procedure for e-voting shall apply (in case of e-voting)
 Publish the ballot paper and relevant information in newspapers and upload the
ballot paper on its website not later than 7 days before general meeting and
regular procedure for voting through ballot paper shall apply (in case of voting
through ballot paper)

Chairman shall immediately after conclusion of voting, count votes casted during the
meeting in person, through proxy, video-link and post and in case of e-voting unblock
result of e-voting and announce result.
3. Meetings and Proceedings (Solutions) Page 747

Q16 Sec 134 to 136 Companies Act 2017

Part A: As per sec 136 of Companies Act, On a petition filed by members having 10%
or more voting rights to court within 30 days of the meeting, the court may declare
such proceedings/ part invalid and direct holding of fresh general meeting.
(1.5marks)

In the given scenario Miss. Shamim Ara has file an application with the commission
which is not the appropriate authority, therefore commission is not in a position to
declare the resolution invalid, she should file her complaint with the High court.
(1.5marks)

Part B:

i): If the quorum is not present within half an hour of the meeting, the meeting shall
be dissolved. (1 Marks )

For listed Companies, the quorum shall be 10 members present personally or

through video link (having at least 25% of voting powers of their account or as
proxies). (1Marks )

Therefore the meeting although started late but will be still valid as quorum of the
meeting was present within half an hour (1 Marks )

ii): Special Resolution:

As per sec 2(66) A resolution which has been passed by a majority of not less than
three fourths of such members entitles to vote as are present in person or by proxy
or vote through postal ballot at general meeting of which not less than 21 days
notice specifying the intention to propose the resolution as a special resolution has
been duly given. (1 marks)

If the members present at the meeting voted in 3/4th majority for the resolution
than the resolution will be considered as passed. As majority of the members i.e 30
members casted voted in favor of the resolution which is more than ¾ majority. (
2 marks)

Q17* Section 149 and 134 of Companies Act, 2017.

The election of directors is an ordinary business and resolution of members by
circulation is not allowed for this agenda item.
The option of resolution of members by circulation is only applicable to private
companies and public unlisted companies and as AL is listed company, this option is
irrelevant.
AL may use e-voting or voting through ballot paper under Companies (Postal Ballot)
Regulations, 2018.
In case of election of directors, if the number of persons who offer themselves to be
elected is more than the number of directors fixed, a listed company shall:
3. Meetings and Proceedings (Solutions) Page 748

(a) in case of e-voting, send relevant information to members, not later than seven
days before the date of general meeting (the regular procedure for e-voting shall
apply); or
(b) in case of voting through ballot paper, publish the ballot paper and relevant
information in newspapers, shall also upload the ballot paper on its website not
later than seven days before the general meeting (the regular procedure for
voting through ballot paper shall apply).

The chairman of the meeting shall immediately after the conclusion of voting for
election of directors, count votes casted during the meeting in person, through proxy,
video-link and post and in case of e-voting unblock result of e-voting and announce
result.

Q18* Regulation 27 of Companies (General Provisions and Forms) Regulations, 2018

and Section 132 (1) and Section 223 (2) of Companies Act, 2017.
Since WL is not a listed company, an application shall be made to registrar for an
extension of time in holding AGM and laying financial statements therein. The registrar
may allow extension in time not exceeding 30 days.

The application is required to be submitted not less than 30 days before the last date
on which such general meeting is required to be held. The AGM is required to be held
within a period of 120 days following the close of its financial year i.e. by 28 October
20X7 and 30 days before that means application should have been submitted by 28
September 20X7.

The above timeframe is not possible as WL itself received information on 2nd October
20X7. In these circumstances, the registrar may entertain application submitted less
than 30 days before 28 October 20X7, for special reasons to be recorded.
The aforesaid application shall state:
(i) the registration number, name and address of WL;
(ii) That the last AGM was held on 18th October 20X6 in which financial statement
for the year ended 30 June 20X6 were laid.
(iii) That the AGM is actually required to be held by 28th October 20X7 and financial
statements for the year ended 30 June 20X7are required to be laid therein.
(iv) The reason (i.e. non-finalisation of audit) due to which AGM cannot be held by
28th October 20X7.

The application shall be accompanied by a certificate of company’s auditor as to

reasons for delay in completion of audit and the minimum time required for the
purpose.