CORPORATE LAWS & PRACTICES

Time allowed – 3 hours

Total marks – 100
[N.B. – The figures in the margin indicate full marks. Questions must be answered in English. Examiner will take account
of the quality of language and of the way in which the answers are presented. Different parts, if any, of the same
question must be answered in one place in order of sequence.]
Marks
1. (a) Mr. Shamsul Alam is a retired government officer. Mr. Alam held 50,000 nos. of shares in ABC
(Pvt.) Limited in the year 2018. ABC (Pvt.) Limited declared 50% cash dividend and 10% stock
for the year ended June 30, 2017. Record date for entitlement of the dividend was December 15,
2017. Mr. Alam has been critically ill and was suffering from heart disease a long period.
Suddenly he died on January 15, 2018 due to heart attack. Late Shamsul Alam has left his wife,
one son and one daughter; both of them are adult. The deceased family came to ABC’s office and
claim Mr. Alam’s shares and dividends.
Requirement:
In this case what are the procedures that have to be followed under the provisions of The
Companies Act 1994? 8
(b) Mr. A purchased 3,000 nos. of shares XYZ Company Limited. Later on the certificate was lodged
to the Company for registration of transfer of 1,000 shares (out of 3,000) in the name of Mr. B.
The company certified the transfer but instead of destroying the original certificate, returned it to
the transferor who borrowed money giving it as collateral.
Requirement:
Is the Company liable to the lender? 3

2. (a) Board of Directors of a company proposed cash dividend @ Tk. 5.00 per ordinary share of Tk.
10.00 each. In the Annual General Meeting some shareholders suggested to declare cash dividend
@ Tk. 6.00 per ordinary share while some other shareholders suggested that the cash dividend
recommended by the Board @ Tk. 5.00 per share be converted into stock dividend.
Requirement:
Explain how the Chairman of the meeting should deal with the suggestions of the shareholders. 4
(b) Presently, Alfa Company Limited (“the Company”) has three directors namely A, B and C. Previously,
the Company had five directors out of whom two directors namely D & E (close friends of C) died in
an accident. No other directors were appointed. According to Articles of Association of the Company
quorum for directors’ meeting is three. C resigned from the board due to the fact that his views and
recommendations are not considered by A & B. A & B intends to appoint M who is a shareholder of
the Company in the place of C. But C does not want to appoint M as a director of the Company.
Requirement:
You are required to answer: 4
i) When the resignation of C will be complete?
ii) What procedures should A & B follow to appoint M as a director of the Company?
3. The AGM of PQR Company Limited was called at the factory premises situated at about 25 km away
from its registered office. On the day of the meeting the conveners i.e. the Chairman, the Directors
& the Company Secretary could not be present in the meeting place due to reasons not within their
control. The shareholders who assembled at the factory premises found that the conveners of the
meeting were absent & the meeting place was under lock & key. The shareholders present convened
the meeting in a nearby building. They ascertained that quorum was present, appointed one of them
as the Chairman for that meeting since the Chairman and the Directors were not present within the
waiting time as per articles of association and conducted the meeting as per agenda. Everything was
done according to articles to ensure a valid meeting. They took all resolutions as per agenda of the
meeting except that they approved a higher rate of dividend than the rate recommended by the Board.
Requirement:
Answer the following with reference to the relevant provisions of Companies Act 1994.
a) Is the AGM conducted by the shareholders valid? 4
b) Are the resolutions taken in the AGM binding on the Company? 4
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 c) If the Chairman claims that he has postponed the meeting on the basis of a Board decision made
on way to the meeting place where they were bound to halt, what will be legal status of his claim,
if he wants to hold the AGM on another date? 5

4. (a) ABC Limited is a public limited company and planning to go for IPO (initial Public Offer) where
Mr. Ahmed FCA is holding the positions of Chief Financial Officer, Head of Internal Audit and
Company Secretary. Mr. Ahmed has been serving this company for the last 25 years and mostly
trusted and he is a reliable person in the company.
Requirement:
Comment on the position of Mr. Ahmed FCA regarding holding of 3 positions in ABC Limited
according to the Corporate Governance Guidelines 2018 of the Bangladesh Securities and
Exchange Commission. 3
(b) OMN Ltd. is a publicly traded company listed with DSE & CSE and you are acting as its Company
Secretary. The Company has just closed its accounting year 30th June, 2018 and your time is counting
down until holding of 12th AGM along with 5th EGM. The 11th AGM of the Company was held on
30.10.2017. You have to follow up and coordinate many works with Accounts, Publications and other
Departments of your Company from drafting of financial statements to holding AGM & EGM. Each
and every one is running after time constraints specially you and tremendous pressure is going on to
complete the year until payment of dividend and submission of statutory returns. Chairman of the
Board of Directors of the Company desires to hold the AGM & EGM on 30.10.2018 to reduce the
meeting cost and time. It is mentioned here that 5th EGM is required to pass a special resolution to
change a provision in the Articles of Association of the Company. To complete the entire things, CEO
has called a departmental coordination meeting where you submitted the ‘Chronological Job Flow
Chart’ mentioned below showing deadlines with the object to complete the various tasks in time for
smooth holding of AGM & EGM:
Job ID Chronological Job Flow Chart Date
No.
01. Preparation of Provisional Financial Statements for the year ended 30th 16.07.2018
June 2018.
02. Issuance of letter to the Auditors to resume audit work. 17.07.2018
03. Preparation of ‘Directors Report’ for approval in the meeting of the Board 18.07.2018
of Directors which is statutory requirements to be included in the Annual
Report 2018.
04. Issuance of letter to the Appointing firm for providing Certificate on 20.07.2018
Compliance of Corporate Governance Guidelines.
05. Drafting of Annual Report 2018 which is required to be sent to the 01.08.2018
printing press.
06. Bilateral discussion with the Management and Senior Audit Partners on 24.08.2018
the 1st draft audited financial statements.
07. Obtain audited draft financial statements from the audit firm, which is 27.08.2018
required to be submitted before the Board of Directors for authorization.
08. Information to the BSEC, DSE & CSE about holding of 57th meeting of 05.09.2018
the Board of Directors on 13.09.2018 where Financial Statements for the
year ended on 30th June, 2018 to be approved.
09. All types of Memo (AGM related) are to be placed to the Board meeting. 11.09.2018
10. Holding of 57th meeting of the Board for adoption of audited Accounts, 13.09.2018
Balance Sheet, Profit & Loss Account etc. by the Board of Directors
(ii) Fixation of Date, Time, Venue of AGM
(iii) Recommendation of dividend
11. Dissemination of Price Sensitive Information to BSEC, DSE, CSE & CDBL 13.09.2018
12. Price Sensitive Information to be sent in the online newspapers 13.09.2018
13. Price Sensitive Information to be published in the two widely circulated 14.09.2018
national dailies (one in Bangla and the other one in English).
14. Issuance of Notice for holding of 58th meeting of the BoD where 28.09.2018
‘Directors’ Report’ is to be approved for inclusion in the Annual Report
2017 as per Corporate Governance Guidelines issued by BSEC.

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 15. Obtaining the Certificate of Corporate Governance Guidelines for 02.10.2018
inclusion in the Annual Report 2018.
16. Holding of Audit Committee Meeting for approval of Audit Committee 03.10.2018
Report 2018 which shall be included in the Annual Report 2018
17. Holding of 58th meeting of the BoD for approval of Audit Committee Report 03.10.2018
2018 and (i) Directors’ Report for the year 2018, (ii) Report on Internal
Control System for the year 2018 and (iii) Report on Going Concern and
authentication by the Chairman or any three Directors to authenticate the
same on behalf of the Board of Directors of the Company.
18. Printing order for Annual Report 2018 04.10.2018
19. Fixation of record date 05.10.2018
20. Receiving CDBL Data and calculation for dividend entitlements for the 08.10.2018
respective shareholders
21. Issuance of Notice for holding of 5th EGM 08.10.2018
22. Taking delivery of Annual Report 2018 for circulations 11.10.2018
23. Sending Audited Financial Statements to BSEC, DSE & CSE 27.09.2018
24. Sending 30 copies of Annual Report to the Regulatory Authorities 12.10.2018
(BSEC, DSE, CSE)
25. Issuance of Notice, Annual Report, Proxy Forms etc. to the Shareholders 15.10.2018
for holding of 12th AGM
26. Date of holding of 12th AGM 30.10.2018
27. Date of holding of 5th EGM 30.10.2018
28. Video Recording (un-edited) to be sent to BSEC, DSE & CSE in 02.11.2018
Compact Disc format.
29. Auditors are to be informed of their appointment and their remuneration 05.11.2018
for the next AGM.
30. 01. Opening 2 (two) BO Accounts in the name of ‘Suspense A/c’ for 05.11.2018
keeping the shares without BO ID, Invalid BO & other reasons and
another Account in the name of ‘Fractional Dividend’ for keeping,
Fractional Shares (if Stock Dividend is declared)
02. Opening of Bank Account in the name of Cash Dividend for the year
30th June, 2018 (if Cash Dividend is declared)
31. Holding of 59th meeting of the BoD for approval of Return of Allotment 06.11.2018
(Form-XV)
32. Minutes of AGM & EGM with attendance of the Shareholders is to be 14.11.2018
submitted to BSEC, DSE & CSE
33. Preparation for Printing of Dividend Warrants for the shareholders whose 08.11.2018
bank accounts do not have on-line facilities (i.e. EFTN facilities)
34. Distribution of Stock Dividend in consultation with CDBL. 09.11.2018
35. Submission of Form-XII with the RJSC 14.11.2018
36. Submission of Annual Return and Statements to the RJSC (Form-XII, 12.11.2018
Form-IX, Schedule-X, Balance Sheet, Form-23B)
37. Submission of Special Resolution to the RJSC (Form-VIII) 12.11.2018
38. Submission of Return of Allotment (Form-XV) 12.11.2018
39. Disbursement of Cash Dividend through EFTN. 15.11.2018
40. Delivery of Dividend Warrant to the Address of the Respective Shareholders 16.11.2018
41. Dividend Disbursement report to the Commission and Exchange(s) 15.12.2018
On the above chronological job flow chart, some dates are statutory / regulatory (i.e. jobs are
involved with mandatory time limitation as per laws and regulations, for example: 14 days’
notice is required to hold AGM etc.) and some are based on reality which ultimately lead you to
comply with the statutory dates for smooth holding of AGM & EGM.
Requirement:
You are required to simply pick up the Jobs as per ID number from the above table that are statutory
regulatory in nature and state the time boundary set for the jobs as per Companies Act 1994 and other
directives / notifications of BSEC, DSE, CSE etc. as per the following table: 15
Job ID No. Statutory / Regulatory time boundary / time frame
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5. Discuss the activities and responsibilities of the Financial Reporting Council that are required to be
discharged through four serviceable divisions as per section 22 to 26 of Financial Reporting Act 2015. 10

6. (a) You are an Auditor Manager of ABC & Co., Chartered Accountants who have been appointed
as the statutory auditor of a scheduled bank for the year 2018. While conducting the statutory
audit of the bank, you have identified the following situations:
(i) The financial statements have not been correctly prepared in accordance with the usual
accounting methods;
(ii) The auditor is satisfied to the effect that doubt exists whether the bank has sufficient assets
to meet the demands of the creditors;
(iii) Adequate provisions have not been made for advances and other assets, realization of which
are doubtful;
(iv) The capital of the bank has fallen below 70% on account of loss incurred; and
(v) A criminal offence involving fraud and dishonesty has been committed.
You are required to submit the audit report along with the audited financial statements to the
Board of Directors on 28 February 2019, and the management wants the audit report along with
the audited financial statements by 26 February 2019 so that the same can be circulated along
with the Board Memo on 26 February 2019 and placed before the Board of Directors on 28
February 2019. The AGM has been scheduled to be held on 15 April 2019. Assume that today is
19 February 2019.
Requirement:
What actions ABC & Co. is required to take under the Banking Companies Act 1991 in each of
the above situations? 10
(b) The above bank intends to appoint your firm ABC & Co. urgently to conduct a fixed assets
valuation work of the entire bank as on 31 March 2019. You have adequate manpower to
complete the assignment and submit the report by the required delivery date of 25 April 2019.
Requirement:
Should you accept the appointment? Discuss. 3
(c) Can Bangladesh Bank declare an auditor, holding valid certificate of practice from ICAB, unfit
for all audit works? Discuss. 3

7. ABC Financing limited is operating in the financing industry since 1980. By virtue of the financing
business, the company has gained significant know how of different types of wholesale and retail
business. As a diversification plan, the company is considering if it can start a side business of
wholesale goods in addition to the financing business.
Requirement:
Explain the restrictions regarding the business of financial institutions. 4

8. (a) In view of large decline in the value of shares in Bangladesh market, the foreign investors believe
that now is the appropriate time to invest in such markets as they have almost reached their lowest
limits. One such investor namely Mr. Robert is interested in buying securities listed on Dhaka
Stock Exchange.
Requirement:
With reference to relevant provisions of Foreign Exchange Regulations, you are required to
advise Mr. Robert on the following:
(i) Procedure to be followed in order to trade in listed shares in Bangladesh. 6
(ii) Whether Mr. Robert would be entitled to receive dividends on such securities and are there
any restrictions on repatriation of funds outside Bangladesh? 4
(b) What is meant by Assignment and Nomination of Life Insurance Policies? Mention the various
rules regarding assignment of life policies. 10

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