CS Final :: Company Secretarial Practice : December 2003

Redraft the following notice for an annual general meeting keeping in view the requirements of the law. Also draft the necessary annexure, if required :
“NOTICE is hereby given that the Twenty Fourth Annual General Meeting of the Directors of XYZ Ltd. will be held at the Administrative Office of the Company at 4th floor, Bagirathi Complex, Bright Road, New Delhi, on Sunday, the 29th June, 2003 at 10.30 PM to transact the following business :

ORDINARY BUSINESS

To receive and approve the audited statement of accounts for the year ended 31st March, 2003 and to consider the reports of the Directors and the Auditors thereon.

To pay a dividend.

To appoint Auditors and to fix their remuneration and in this connection, to consider, and, if thought fit, to pass with or without modification, the following resolution as a Special Resolution:

“RESOLVED that, pursuant to the provisions of section 224 of the Companies Act, 1956, M/s ABC and Co. Ltd., the Chartered Accountants, be and they are hereby appointed the Auditors of the company to hold office for the financial year 2003-04 and the Board of Directors be and is hereby authorised to fix their remuneration for the said period.”

Date: 20th June, 2003
Registered Office :
Mathura Bhavan, II Cross
Patel Nagar, Agra

Note: A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself and a proxy need not be a member.”

226

Bright and Prosperous (Pvt.) Ltd. is a family-owned company incorporated with a capital of Rs.1,75,000. The company has a number of indigenous and foreign agencies for manufactured engineering goods and has had a steady growth in turnover and profits over the last ten years. The directors, visualising further growth in the company’s business, have decided to make the company public; however, for the time being, the company will not be listed on any stock exchange

Your services, as company secretary, have been requisitioned to advise the Board on the various steps to be taken along with draft resolutions, to achieve the objective. Make a detailed presentation to the Board.

Write short notes on any four of the following :

(i)	Buy-back of shares
(ii)	Minimum/maximum number of directors in a company
(iii)	Need for secretarial standards
(iv)	Free transferability of shares
(v)	Satisfaction of charge.

The Board of directors of Sunbeam Industries Ltd., of which you are the company secretary, seek your advice on the following matters :

(i)	To commence manufacturing refrigerators and washing machines, which are not germane to the existing activities.
(ii)	To shift the corporate office of the company to New Delhi, the registered office will continue to function in Mumbai.
(iii)	To appoint Shyam as a director in place of Atmaram, a director who passed away recently.
(iv)	To open a new bank account of the company with Everready Bank Ltd., Jolly Place, New Delhi, to facilitate its New Delhi operations.

Advise the Board along with appropriate resolutions.

226

What do you mean by non-statutory books/registers to be maintained by a company ? Why are such books/registers maintained by the companies ?

Classify the following into statutory and non-statutory books/registers and explain briefly the necessity and the contents of each of them :

(i)	Dividend register
(ii)	Register of charges
(iii)	Register of share transfers and transmission
(iv)	Register of contracts with companies and firms in which directors are interested.

A company opened a dual purpose account, so that dividend was paid to the shareholders from that account and the unpaid amount of dividend remained with the bank, which earns nominal interest to the company. Bank also agreed to honour all dividend warrants deposited at the specified branches spread across the country.

Accordingly, the money was transferred to the dual purpose account and dividend warrants were posted within three days from the date of the declaration of the dividends. However, later on, company realised that it would be impossible for it to know whether or not the dividend warrants have been encashed by the shareholders unless they were returned back to the bank or the company.

Therefore, company decided to continue with the dual purpose account till the warrants go stale and only then transfer the unpaid dividend, to a special account with a scheduled bank, as prescribed for payment of dividend. Examine whether there is any contravention to the provisions of law relating to the payment of dividend.

A few directors of a power company registered in India, who are foreign nationals, collected funds from non-resident individuals and companies with a promise to issue shares of that power company. They made false and misleading statements and suppressed facts. They diverted the funds so raised to certain investment companies owned by them abroad. The funds so diverted were utilised by the investment companies for securing allotment of shares in the power company. Can the aforesaid directors be prosecuted for trial in the Indian courts for the commission of offences under sections 60, 63, 68 and 68A of the Companies Act, 1956 ? Support your answer with case law, if any.

5,000 equity shares in a company were standing registered in the joint-names of Smt. Sumati and Sri Krishan. A dispute arose between them. Sri Krishan requested the company to split the holdings half and half and show his name as the first joint-holder in one half of the holdings so split. Discuss whether the company can entertain Sri Krishan’s request ?

X was a shareholder in company M Ltd. X died bequeathing a will under which Z, son of X, was empowered to receive the amount of the shares. The articles of association of M Ltd. vested with the Board of directors absolute discretion in regard to registration of transfer of shares.
In the instant case, the Board refused to register the transmission of shares on the grounds that the will entitled Z to receive amount of the shares only and that he was an undesirable person to the company. Is the refusal to register the transmission by the Board of directors of company correct ? Explain.