Q.2

(a)

Students successfully attempted this straightforward oft-repeated topic of procedure for members’ voluntary winding-up.

(b)

The powers of liquidator to compromise in members and creditors voluntary winding-up were asked and very few had the knowledge of conditions applicable on exercising such powers. Some students tried to relate said powers with the declaration of solvency, which was not relevant as there was no question of sufficient or insufficient fund in the given case. Very few could mention the fact that such power is subject to the control of court and any dissatisfied creditor may apply to the court in respect of the proposed compromise.

Q.3

In this question, the case contained some information regarding an existing group of companies engaged in financial services covered under NBFC Rules, and sponsors were looking for procedure for merging all these entities. A large number of students ignored the given facts and presumed that the existing NBFCs are working without license and capital adequacy. Resultantly, instead of describing procedure for merger as given in Section 282 of the Companies Ordinance, 1984, they wrote procedure for formation of another NBFC including details of licensing and capital requirement. This shows a serious and continued problem of answering question without taking notice of the facts.

Q.4

All the three parts of the question were easy and straightforward. Large number of students got good marks.

Q.5

(a)

Very few students had the knowledge of provisions of law relating to power of court to rectify members’ register. Some students replied that duplicate certificate may be issued to original member even when physical share certificates were in the hands of buyer duly transferred in his name. Only about 20% of the students were aware of the fact that shares purchased in good faith from stock market and transferred based on valid transfer deed shall belong to such buyer unless otherwise established by a Civil Court.

(b)

Very few candidates could draft appropriate notice of the annual general meeting of a company. In some cases it looked like an invitation to attend a social gathering. The agenda was also poorly written and included items that are not part of the general body business like interim dividend, appointment of CFO, capital expenditure and increase in paid up capital. A large number were unaware of the fact that bonus shares could not be issued by utilizing all available reserves.

Q.6

(a)

Although a good number of candidates knew the approving authorities of annual accounts, interim dividend, further issue of fund and appointment of auditor in case of modaraba, but very few could explain the rationale behind the same. In some cases confusion was noticed about the structure of modaraba, modaraba company and role of registrar modaraba and of modaraba certificate holders.

(b)

Very few had to-the-point understanding of the opportunities available to branches of foreign companies raising working capital and loan for capital expenditure.

Q.7

Reasonable number of candidates were able to list out priority ranked payments in case of winding up of a company. Some mixed up the topic with the priority payments given in accounting books under partnership dissolution.

Q.8

Signatories of accounts of banking and insurance companies required under the relevant laws were an easy area but very few could reply it correctly. Apparently, the students have resorted to selective study.

Q.9

This question proved to be a good scoring one, as extension in the date of holding annual general meeting is an easy part of the subject related to meetings of shareholders.

Q.10

Rehabilitation of a sick company is an area, which is not asked frequently but quite a number of candidates were able to answer the contents of rehabilitation plan correctly which may include reduction/restructuring of capital, debt rescheduling, varying the rights of shareholders, changes in directors, chief executive and major shareholders, amendment in Memorandum and Articles etc.