Overall, the performance in the paper was satisfactory. Some of the mistakes commonly made by the students are discussed in the question-wise comments hereunder:

Q.1

(a)

It was an easy question and most students attempted it well. The appeal against non-registration of memorandum is made to SECP. Instead, some examinees mentioned that the same is to be referred to the High Court.

(b)

This question was well attempted by majority of the students. Similar to the situation in 1(a), many students stated that an association not for profit is required to obtain license from the court instead of SECP.

(c)

It was a simple question and majority of the students gained good marks. However, few students wrote the whole procedure for registration of a private limited company, which was not the requirement of the question.

Q.2

(a)

Although it was a simple question, many students failed to comprehend it  and wrote pages whereas the answer required a few lines. The required provisions are given in Section 160 of the Companies Ordinance 1984.

(b)

This question was  very poorly attempted by most of the students. Obviously, the company exercises voting rights and gets represented on board of directors by appointing its nominee. Many examinees did not give any answers whereas many others were of the opinion that Tennis Ltd. could not get represented on BOD as it was an artificial person.

(c)

Companies which become public by converting themselves after one year of incorporation as a private limited company are not required to hold a statutory meeting and in such cases, the date of conversion is considered as the date of commencement of business. Most of the students could not answer this question correctly.

(d)

It was one of the easiest question and was well attempted by majority of the students.

Q.3

It was an easy question and attempted well by most of the students. The required provisions are mentioned in Section 248-251 of the Companies Ordinance 1984.

The performance of the students was very poor in this simple question. Most of the students were unable to explain that a shareholder becomes entitled to interim dividend on:

• date of commencement of closing of share transfer book; or
• date of approval of dividend by the directors’ if there is no closure of members’ register

Many students did not understand the requirements of the question and described the contents of register of members. Many others were however, able to secure good marks.

Q.4

(a)

This question related to assignment of office by the director of a company. The relevant provisions are contained in Section 192 of the Companies Ordinance 1984. Although many students gave correct answers yet many others did not understand the relevant provisions and stated that the director can not assign his office as his absence was for a period of more than three months.

(b)

It was a simple question and most of the students secured full marks.

Q.5

(a)

This question was poorly answered by many students. Most students seemed unaware of the conditions regarding payment of underwriting commission, and instead, choosed to define an underwriting contract and could not secure any marks.

(b)

The performance of the students in this question was average. Almost all the students could mention few of the requirements as contained in Section 86 correctly. Hardly few could secure full marks.

Q.6

(a)

Most of the students were able to mention the types of companies that require cost audit and the requirement that the auditor should be a Chartered Accountant or Cost and Management Accountant. However, most of them failed to point out that cost auditors have the same powers, duties and liabilities as the statutory auditors.

(b)

It was an easy question based on Section 253 of the Companies Ordinance 1984 and was well attempted by majority of the students.

Q.7

(a)

The students were generally able to quote the relevant provisions as contained in Section 146 of the Companies Ordinance 1984 and secured good marks.

(b)

The students were required to quote the necessary provisions as contained in the Companies Ordinance 1984, where a share holder wishes to appoint nominees to be entitled to the shares owned by him in case of his death. The performance of the students in this question was below satisfactory. A large number of students generally explained the term “nomination” instead of describing the requirements to be fulfilled, for the appointment of nominee to be valid.

Q.8

(a)  & (b)

Very few students answered these parts of the question satisfactorily. In most cases they didn’t seemed to have studied the relevant provisions as contained in Section 67 and 68 of the Companies Ordinance 1984. Many others gave irrelevant answers.