Md.

Yasin Miah FCA

Companies Act 1994
Section 17
Mandatory regulations of Schedule I

Regulation 56 – Meeting at different places and adjournment

The Chairman may, with the consent of any meeting at which a quorum is present, and shall, if
so directed by the meeting, adjourn the meeting from time to time and from place to place, but no
business shall be transacted at adjourned meeting other than the business left unfinished at the
meeting from which the adjournment took place. When a meeting is adjourned for ten days or
more, notice of the adjourned meeting shall be given as in the case of an adjournment or of the
business to be transacted at an adjourned meeting.

Question:
The adjourned meeting is about to resolve three more agenda only being 9 were resolved out of
12. Chairman has a very important agenda which he desires to bring in the next adjourned
meeting. Discuss in line with Companies Act 1994. 3 N-D,17

Answer:
As per regulation 56 of Schedule-I of Companies Act 1994, the Chairman may, with the consent
of any meeting at which a quorum is present, and shall, if so directed by the meeting, adjourn the
meeting from time to time and from place to place, but no business shall be transacted at
adjourned meeting other than the business left unfinished at the meeting from which the
adjournment took place. When a meeting is adjourned for ten days or more, notice of the
adjourned meeting shall be given as in the case of original meeting. Here, no new agenda could
be brought in and no notice is required.

Regulation 66 – signature of proxies

The instrument appointing a proxy shall be in writing under the hand of the appointer or of his
attorney duly authorized in writing, or, if the appointer is a body corporate either under the
common seal or under the hand of an officer or attorney so authorized.

Regulation 71- Directors qualification shares

The qualification of a director shall be the holding of at least one share in the company, and it
shall be his duty to company with the provisions of section 97 of the Companies Act, 1994.

Regulation 78- disqualification of directors

The office of a director shall be vacated if the director:
(a) Fails to obtain within the time specified in sub section (1) of section 97 of the Companies
Act, 1994 or at any time thereafter ceases to hold, the share qualification necessary for
his appointment; or
(b) Is found to be unsound mind by the competent Court; or
 (c) Is adjudged insolvent; or
(d) Fails to pay calls made on him in respect of shares held by him within 6 months from the
date of such calls being made; or
(e) Without the sanction of the company in general meeting accepts or hold any office of
profit under the company other than that of the managing director or manager or legal or
technical advisor or banker; u/s 104 or
(f) Absents himself from 3 consecutive meetings of the directors without leave of absence
from the Board of Directors; or
(g) Accepts a loan from the company; u/s 103 or
(h) Is concerned or participates in the profits of any contract with the company; u/s 105
or
(i) Is punished with imprisonment for a term exceeding 6 months:

Provided that no director shall vacate his office only by reason of his being member of any other
company which has entered into contracts with or done a work for such other company of which
he is a director, but a director shall not vote in respect of any such contract or work and if does so
vote his vote shall not be counted u/s 131.

Regulation 79- Rotation of directors

At the first ordinary meeting of the company, the whole of the directors shall retire from office
and at the ordinary meeting in every subsequent year, one-third of the directors for the time
being or if their number is not three or a multiple of three, then the number nearest to one-third
shall retire from office.

Regulation 80-Which of the directors to retire

The directors to retire in every year shall be those who have been longest in office since their
last election, but as between person as who became directors on the same day those to retire
shall, unless they otherwise agreed among themselves be determined by lottery.

Regulation 81- eligibility for re-election.

A retiring director shall be eligible for re-election.

Regulation 82- General meeting to elect directors

The company at the general meeting at which a director retires in manner aforesaid may fill in
the vacated office by electing a person thereto.

Regulation 95-Defect in appointment not to invalidate acts of directors

All acts done by any meeting of the directors or of a committee of directors, or by any person
acting as a director, shall, notwithstanding that it be afterwards discovered that there was some
defect in the appointment of any such directors or persons acting as aforesaid or that they or any
of them were disqualified, be as valid as if every such person had been duly appointed and was
qualified to be a director.

Regulation 97- Directors may propose interim dividends

The directors may from time to time pay to the members such interim dividends as appear to
the directors to be justified by the profits of the company.
Regulation 105- Books of account shall be kept at the registered office and opened for
inspection by directors
The books of account shall be kept at the registered office of the company or at such other place
as the directors shall think fit and shall be opened to inspection by the directors during business
hours.

Regulation 108- Contents of profit and loss account

The profit and loss account shall in addition to the matters referred to the sub-section (2) of
section 185 of the Companies Act, 1994 show, arranged under the most convenient heads, the
amount of gross income, and in the case of a banking company, the amount of any provision
made to the satisfaction of the auditors for bad and doubtful debts distinguishing the several
sources from which it has been derived, and the amount of gross expenditure distinguishing the
expenses of the establishment salaries and other like matters.
Every item of expenditure fairly chargeable against the year’s income shall be brought into
account so that a just balance of profit and loss may be laid before the meeting, and in cases
where any item of expenditure which may in fairness be distributed over several years has been
incurred in any one year, the whole amount of such item shall be stated, with the addition of the
reasons why only a portion of such expenditure is charged against the income of the year.

Regulation 112- Appointment of Auditors

Auditors shall be appointed and their duties regulated in accordance with sections 212 and 213
of the Companies Act, 1994.

113-116 Provisions for sending notice

Regulation 113-A notice may be given by the company to any member either personally or by
sending it by registered post to him to his registered address or if he has no registered address in
Bangladesh to the address if any with in Bangladesh supplied by him to the company for the
giving of notice to him.

Regulation 114- If a member has no registered address in Bangladesh, and has not supplied to
the company an address within Bangladesh for giving of notice to him, a notice addressed to him
and advertised in a newspaper circulating in the neighborhood of the registered office of the
company shall be deemed to be duly given to him on the day on which the advertisement
appears.

Regulation 115- A notice may be given by the company to the joint holders of a share by giving
the notice to the joint holder named first in the register in respect of the share.

Regulation 116- A notice may be given by the company to the persons entitled to a share in
consequence of death or insolvency of a member by sending through the post in a prepaid letter
addressed to them by name or the title of representatives of the deceased or assignee of the
insolvent or by any like description at the address if any in Bangladesh supplied for the purpose
by giving the notice in any manner in which the same might have been given the death or
insolvency had not occurred.
 Schedule 1
Regulation 7 of Schedule 1
If a share certificate is defaced, lost or destroyed it may be renewed on payment of such fee, if
any, not exceeding 5 taka, and on such terms, if any, as to evidence and indemnity as the
directors think fit.

Regulation 8 of Schedule 1
Except to the extent allowed by section 58 no part of the funds of the company shall be
employed in the purchase of or in loans upon the security of, the company’s shares.

Regulation 20 of Schedule 1
(1) The directors may decline to register any transfer of shares not being fully paid up shares,
to a person of whom they do not approve, and may also decline to register any transfer of shares
on which the company has lien.
(2) The directors may suspend the registration of transfer during the 14 days immediately
preceding the ordinary general meeting in each year.
(3) The directors may decline to recognize any instrument of transfer or refuse to register such
transfer, unless-
(a) a fee not exceeding Taka 10 as may be fixed by the company is paid to the company
in respect thereof,
(b) the instrument of transfer is accompanied by the certificate of share to which it
relates,
© such evidence as the directors may reasonably require to show the right of the
transferor to make the transfer has been furnished.

(4) If the directors refuse to register or decline to recognize the transfer of any shares, they shall,
within 2 months after the date on which the transfer was lodged with the company, send to the
transferee and transferor notice of the refusal or decline.

Regulation 21 of Schedule 1
The executors or administrators of a deceased sole holder of a share shall be the only persons
recognized by the company as having any title to the share. In the case of a share registered in
the names of two or more holders, the survivor or survivors or the executors or administrators of
the deceased survivor or survivors shall be the only person recognized by the company as having
any title to the share.

Regulation 22 of Schedule 1
Any person becoming entitled to a share in consequence of the death or insolvency of a member
shall, upon such evidence being produced as may from time to time be required by the directors,
have the right, either to be registered as a member in respect of the share or to make such transfer
of the share as the deceased or insolvent person could have made.

Regulation 23 of Schedule 1
A person becoming entitled to a share by reason of death or insolvency of the holder shall be
entitled to the same dividends and other advantages to which he would be entitled if he were the
registered holder of the share, expect that he shall not, before being registered as a member in
respect of the share, be entitled in respect of it exercise any right conferred by membership in
relation to meeting of the company.

Question:
Mr. Shamsul Alam is a Govt. officer held 50000 shares of ABC (Pvt.) limited in the year 2018.
The company declared 50% cash dividend and 10% stock dividend for the year ended June30,
2017. Record date for entitlement of the dividend was December 15, 2017.He died on January
15, 2018 after suffering a long period. Late shamsul Alam has left his wife, one son and one
daughter; all are adult. The deceased family came to ABC’s office and claim Mr. Alam’s shares
and dividends.

In this case what are the procedures that have to be followed under the provisions of the
Company Act 1994? 8

Answer:
According to Regulation 21 of Schedule 1 of Company Act 1994 the executors or administrators
of a deceased sole holder of a share shall be the only persons recognized by the company as
having any title to the share. In the case of a share registered in the names of two or more
holders, the survivor or survivors or the executors or administrators of the deceased survivor or
survivors shall be the only person recognized by the company as having any title to the share.

According to Regulation 22 of Schedule 1 of Company Act 1994 any person becoming entitled
to a share in consequence of the death or insolvency of a member shall, upon such evidence
being produced as may from time to time be required by the directors, have the right, either to be
registered as a member in respect of the share or to make such transfer of the share as the
deceased or insolvent person could have made.

According to Regulation 23 of Schedule 1 of Company Act 1994 a person becoming entitled to a

share by reason of death or insolvency of the holder shall be entitled to the same dividends and
other advantages to which he would be entitled if he were the registered holder of the share,
expect that he shall not, before being registered as a member in respect of the share, be entitled in
respect of it exercise any right conferred by membership in relation to meeting of the company.

Regulation 51 of Schedule 1
All business shall be called special business that are transacted at an extraordinary meeting but
the sanctioning a dividend the consideration of the accounts balance sheet and the ordinary report
of the directors, and auditors, the election of directors and other officers in the place of those
retiring by rotation, and the fixing of the remuneration of the auditors shall not be called special
business.

Question:
A Publicly traded Company is in the process of holding the 17th AGM to be held on 15th July
2017. Chairman of the company has just been appointed and this is the 2nd AGM in his entire
life and 1st AGM as Chairman. Naturally he is excited to make the AGM a success and he
himself drafted the following agenda of the meeting and asked the Company Secretary to prepare
the final Notice including Agenda which is required to be approved by the Board and to serve as
Notice to the Shareholders before 14 days of the meeting:
AGENDA
1. To declare dividend for the year 2016 as recommended by the Board of Directors;
2. To approve the purchase proposal of 100 decimal land at Motijheel Commercial Area at a
price of Taka 1000 million;
3. To receive, consider and adopt the Directors‟ Report and Audited Financial Statements of the
Company for the year ended December 31, 2016 together with the reports of the Auditors
thereon;
4. To approve the proposal to change the Company’s Registered Office address from Gulshan to
Motijheel;
5. Appointment & Re-appointment of Directors;
6. To appoint Auditors for the year 2017 and fix their remuneration; and
7. To approve the proposal to change the name of the Company. 4 M-J,17

Answer:
Only ordinary business is transacted in the Annual General Meeting. According to the regulation
51of Schedule I of Companies Act 1994, sanctioning a dividend, the consideration of the
Accounts, balance sheet and the ordinary report of the directors and auditors, the election of
directors and other officers in the place of those retiring by rotation, and the fixing of
remuneration of the auditors shall not be called special business. Here 3 (three) agenda i.e.
Agenda no: 2, 4 and 7 in the draft notice are unrelated to AGM. Agenda 2 is the agenda of a
Board meeting. Agenda 4 & 7 are related to an Extra Ordinary General Meeting where a special
resolution is required to be passed and action is to be u/s 11 of subsection 6 and u/s 12 of
subsection 2 of Company act 1994. Therefore, the Agenda of the AGM will be finalized as
under:

AGENDA
1. To receive, consider and adopt the Directors’ Report and Audited Financial Statements of the
Company for the year ended December 31, 2016 together with the reports of the Auditors’
thereon;
2. To declare dividend for the year 2016 as recommended by the Board of Directors;
3. Appointment & Re-appointment of Directors; and
4. To appoint Auditors for the year 2017 and fix their remuneration.

Regulation 52 of Schedule-I
No, business shall be transacted at any general meeting unless quorum of members is present at
the time when the meeting proceeds to transact business and save as herein otherwise provided 2
members in the case of a private company and 5 members in the case of any other company
personally present shall be a quorum.

Regulation 53 of Schedule 1
If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if
called upon the requisition of members, shall be dissolved; in any other case, it shall stand adjourned to
the same day in the next week at the same time and place, and if at the adjourned meeting a quorum is not
present within half an hour from the time appointed for the meeting the members present shall be a
quorum.

Regulation 55 of Schedule 1
If at any meeting the Chairman is not present within 30 minutes after the time appointed for holding the
meeting, the members present shall choose someone of the member to be the Chairman.

Regulation 69 of Schedule-I
The number of the directors and the names of the first directors shall be determined in writing by
a majority of the subscribers to the memorandum of association.

Regulation 79 of Schedule-I
At the first ordinary meeting of the company, the whole of the directors shall retire from office
and at the ordinary meeting in every subsequent year, one-third of the directors for the time
being or, if their number is not three or a multiple of three, then the number nearest to one-third
shall retire from office.

Regulation 83 of Schedule-I
If at any meeting at which an election of directors ought to take place, the offices of the vacating
directors are not filled in, the meeting shall stand adjourned till the same day in the next week
and shall be held at the same time and place and, if at the adjourned meeting the offices of the
vacating directors are not filled in, the vacating directors or such of them as have not had their
offices filled in shall be deemed to have been re-elected at the adjourned meeting.

Question:
APB Ltd. is a newly established public limited company where 12 directors where determined by
the subscribers to the Articles of Association of the Company as 1st Directors as per regulation
69 of Schedule-I of Company Act 1994. Mr. Rahman was elected as the Chairman of the
Company in the 1st Board of Directors meeting. The 1st Annual General Meeting of the
company is scheduled to be held on 25th July 2017 at 10.00 am at Army Golf Club Dhaka. Due
to complaints and dissatisfactions some of the powerful and influential shareholders (total
shareholders 25) against 6 directors in the Board, it was agreed among the Directors that those 6
directors will retire from the board although regulation 79 of Schedule-I requires to retire one
third of the directors i.e. only 4 directors in each AGM. Accordingly, 6 directors resigned in the
AGM to avoid conflicts among the shareholders but the shareholders failed to appoint any
director in their place due to some unavoidable circumstances. Chairman adjourned the meeting
for 2 months and finally shareholders also failed to appoint directors.
Required:
You are required to critically analyze the following situations regarding retirement and
appointment of Directors in the 1st Annual General Meeting of a new private limited company:
i) Retiring of 6 Directors from the Board 4
ii) The adjournment of AGM and failure to appoint or re-appoint directors to fill the vacancy 3
iii) Consequences of non-appointment of Directors 3 M-J,17

Answer:
i) As per regulation 69 of Schedule-I of Company Act 1994, the number of the directors and the
name of the first directors shall be determined in writing by a majority of the subscribers to the
memorandum of Association of the Company and thereafter as per regulation 79 of Schedule-I of
Company Act 1994, at the first ordinary meeting of the company, the whole of the directors shall
retire from office and in every subsequent year, one-third of the directors for the time being or, if
their number is not three or a multiple of three, then the number nearest to one-third shall retire
from office. Since the company is new and board of directors was formed according to Articles
of Association, the entire Director shall retire in the 1st AGM to be held on 25th July 2017 and
all are eligible to be re-appointed as Director. So, retiring of 6 directors is a violation of
regulation 79.
ii) According to regulation 83, if at any meeting at which an election of directors ought to take
place, the offices of the vacating directors are not filled in, the meeting shall stand adjourned till
the same day in the next week and shall be held at the same time and place. So adjournment of
AGM in this regard for 2 months is violation of regulation-83.
iii) According to regulation 83, if at any meeting at which an election of directors ought to take
place, the offices of the vacating directors are not filled in, the meeting shall stand adjourned till
the same day in the next week and shall be held at the same time and place and, if at the
adjourned meeting the offices of the vacating directors are not filled in, the vacating directors or
such of them as have not had their offices filled in shall be deemed to have been re-elected at the
adjourned meeting.

Regulation 85 of Schedule-I
Any casual vacancy occurring in the Board of Directors may be filled in by the directors but the
person so chosen shall be subject to retirement at the same time as if he had become a director on
the day on which the director in whose place he is appointed was last elected a director. A
director so chosen shall be known as an alternative director.

Regulation 86 of Schedule-I
The directors shall have power at any time and after the expiry of a specified period to appoint a
person as an additional director who shall retire from office at the next following ordinary
general meeting but shall be eligible for election by the company at that meeting as an
additional director.
Regulation 87 of Schedule-I
The company may, by extraordinary resolution, remove any director before the expiration of his
period of office, and may by, an ordinary resolution, appoint another person in his stead; the
person so appointed shall be subject to retirement at the same time as if he had become a director
on the day on which the director in whose place he is appointed was last elected a director.

Regulation 88 of Schedule-I
The directors may meet together for the disposal of business and adjourn and otherwise regulate
their meetings as they think fit. Questions arising at any meeting shall be decided by a majority
of votes. In case of an equality of votes, the Chairman shall have a second or casting vote. A
director may, and secretary on the requisition of a director shall at any time, summon a meeting
of directors.

Regulation 89 of Schedule-I
The quorum necessary for the transaction of the business of the directors may be fixed by the
directors and unless so fixed shall, when the number of directors exceeds 03(three), be 03(three).

Question:
A private company has four directors, namely ‘L’ (Managing Director), his wife ‘M’ (Chairperson), his
brother ‘N’ (overseas director) & his (L’s) daughter ‘O’ (director who is studying abroad). Overseas
director usually resides in Canada & the company has given him the assignment to promote overseas
business. The articles provide that three directors will form a quorum for the board meeting. What
should be done to validly convene the board meeting with quorum? 4
XYZ Insurance Company Limited is listed with the Stock Exchanges of Bangladesh. The Company
follows financial year as defined in section 2(i) of The Companies Act, 1994. The 6 th AGM of the
Company was held on July 20, 2017. What will be the deadline for holding the 7 th AGM of XYZ
Insurance Company Limited assuming that the company: 4
i. does not have any business or interest outside Bangladesh?
ii. has business or interest outside Bangladesh?
Max Company Limited circulated the notice of the Extraordinary General Meeting dated April 17,
2018 mentioning that the EGM will be held on May 3, 2018 for passing some special resolutions.
The agenda and proposed resolutions were circulated along with the notice. Out of 55 shareholders
of the company 12 shareholders holding 95.5% shares of the company consented in writing to hold
the EGM with shorter notice. On the date of the meeting 35 shareholders having 4% of the voting
right in the company raised the issue that the meeting was not convened complying with the
provisions of the Companies Act, 1994. 4
The Annual General Meeting of Alfa Company Limited (a public limited company) was held on
May 31, 2018 complying with the relevant rules and regulations. Out of 25 shareholders 14
shareholders were present in the AGM. The meeting was conducted as per agenda. When the
agenda on retirement and re-election of directors was placed for discussion 4 shareholders (holding
9.85% of the issued capital) proposed to elect one them namely Muzahid Chowdhury as a director
of the company. The Chairman refused the proposal. Then those shareholders demanded poll for
electing Mr. Muzahid Chowdhury as a director of the company. The Chairman did not take the
demand for poll into his cognizance. The aggrieved shareholders challenged the proceedings of the
meeting. 4

Answer:

According to the Section [Sec. 85 (2) (b)] of Companies Act 1994 for shareholders meeting, the
quorum is two members if the number of shareholders does not exceed six, and if the number of
shareholders exceed six, the quorum is three members in case of private limited company [Sec. 85 (2)
(b)]. The quorum necessary for the transaction of the business of the directors may be fixed by the
directors and unless so fixed shall, when the number of directors exceeds three, be three. (Regulation 89
of Schedule-I).
For shareholders meeting of a public company five members will form a quorum & for private company
two members will form quorum (Regulation 52 of Schedule-I). Given the above provisions, the company
may either alter the articles of association by special resolution to reduce quorum for directors’ meeting to
two directors so that A & his wife can convene board meeting with quorum; Or

As per provision of section 2(i) of The Companies Act, 1994 financial year of an insurance company shall
mean the calendar year. Therefore, financial year of XYZ Insurance Company Limited is January to
December. Hence, the 7th AGM of the Company is to be held within September 30, 2018 i.e. within nine
months from the date of ending of the financial year [section 183(2)(i)].

If the company has business or interest outside Bangladesh the 7 th AGM of the company may be held
within December 31, 2018 [section 183(2)(ii)].

For listed Company

As per provisions of Companies Act, 1994 and BSEC notifications Annual General Meeting of a
company is to be held as under:

 Within 45 working days from the date of the record date.

 Within 06 months from the date of closing of the accounting year. And
 Within 15 months from the date of last AGM.

Answer:
As per provisions of section 85(1) of The Companies Act, 1994 notwithstanding anything contained in
the articles of association of a company 21 days’ notice shall be given for calling a general meeting.
However, general meeting/EGM may be called giving shorter notice if the members holding at least 95%
paid up share capital of the company entitled to attend and vote thereto agree in writing to hold the EGM
with shorter period of notice. In the stated situation since 12 shareholders holding 95.5% paid up share
capital of the company agreed in writing to hold the EGM with shorter notice; there is no legal issue in
holding the meeting with shorter notice.
As per provisions of section 85(1)(c) of The Companies Act, 1994 five members present in person or by
proxy or the chairman of the meeting or any member or members holding not less than one-tenth of the
issued capital which carries voting rights shall be entitled to demand a poll. In the stated situation the
demand for poll by 4 shareholders holding 9.85% of the issued capital of the company is not enforceable.
Hence, all the proceedings of the AGM will be valid and there is no obligation to appoint Mr. Muzahid
Chowdhury as a director of the company.
Regulation 90 of Schedule 1
The continuing directors may act notwithstanding any vacancy in their body, but, if and so long
as their number is reduced below the number fixed by or pursuant to the regulations of the
company as the necessary quorum of directors after may act for the purpose of increasing the
number of directors to that number or of summoning a general meeting of the company, but for
no other purpose.

Question:
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.

Requirements:
You are required to answer:
i) When the resignation of C will be complete? 3
ii) What procedures should A & B follow to appoint M as a director of the Company? 5

Question:
A, B, C, D are four directors of ABC Company Limited, a private limited company, which has
applied to XYZ Bank Limited for a long term loan & in the loan proposal, it was shown that the
company will be converted into a public limited company. The land proposed to be acquired for
the factory belonged to three directors A, B and C value of which was shown as their
contribution towards sponsors ‘portion of the capital in the financial plan. XYZ Bank Limited
approved the loan with certain conditions which included:
The proposed land shall have to be transferred in the name of the company before signing of
the loan agreement.
The Company is to be converted into a public limited company.

i) What type of resolution will be required to approve the transaction; a board resolution or a
shareholders ‘resolution? 3
ii) Can the directors allot shares to A, B, & C for consideration other than cash? 4
Assume that the four directors will continue & the quorum for the board meeting is three in the
company.

Answer:
i) Assuming that C attends the board meeting (in which resignation of C is placed) with A & B
the meeting may pass resolution for acceptance of resignation of C unanimously.
ii) Since A & B intends to appoint M who is a shareholder of the Company in the place of C the
meeting should be closed after passing one resolution i.e. acceptance of resignation of C. As per
regulation 90 Schedule 1 of the Companies Act, 1994 A & B can co-opt M in place of C to
increase the number of directors to form quorum. Accordingly, a separate board meeting will be
convened in which meeting M will be appointed as a director.

The company may exercise the following options:

Before converting into public company, the company may take board resolution to take over the
land by executing a sale deed between the company & A, B, C to whom shares may be allotted
for consideration other than cash & file the return of allotment together with copy of the sale
deed to the Registrar.

Regulation 91 of Schedule-I
The directors shall determine the period for which the Chairman shall hold office.

Regulation 96 of Schedule 1
The company in general meeting may declare dividends, but no dividends shall exceed the
amount recommended by the directors. When a dividend is declared, it shall be paid within 2
months from the date of its declaration.

Provided that the period of 2 months shall not apply in case where –

(a) There is a dispute regarding the right to receive the payment; or

(b) The dividend has been lawfully adjusted by the company against any sum due to it from
the shareholder.

Regulation 98 of Schedule-I
No dividend shall be paid otherwise than out of profits of the year or any other undistributed
profits.

Regulation 100 of Schedule-I

The directors may, before recommending any dividend, set aside out of profits of the company
such sums as they think proper as a reserve or reserves which shall at the discretion of the
directors, be applicable for meeting the contingencies, or for equalizing dividends, or for any
other purpose to which the profits of the company may be properly applied, and pending such
application may, at the like discretion, either be employed in the business of the company or be
invested in such investments as the directors may from time to time think fit.

Regulation 106 of Schedule-I

The directors shall from time to time determine whether and to what extent and what times and
places and under what conditions or regulations the accounts and books of the company or any of
them shall be opened to the inspection of members not being directors, and no member not being
a director shall have any right of inspecting any accounts or books or documents of the company
except as conferred by law or authorized by the directors or by the company in general meeting.

Regulation 107 of Schedule-I

The directors shall as required by sections 183 (Annual Balance Sheet) and 184 (Board Reports)
of the companies Act 1994, cause to be prepared and to be laid before the company in general
meeting such profit and loss accounts or income and expenditure accounts, balance sheet and
reports as are referred to those sections.

Regulation 109 of Schedule-I

A balance sheet shall be made out in every year and laid before the company in general meeting
the balance sheet shall be made up to a date not more than nine months before such meeting. The
balance sheet shall be accompanied by a report of the directors as to the state of the company’s
affairs and the amount, if any, which they propose to carry to a reserve fund.

Regulation 110 of Schedule-I

A copy of the balance sheet and report shall 14 days previous to the meeting be sent to the
persons entitled to receive notice of general meetings the manner in which notice are to be given
hereunder.

Regulation 111 of Schedule-I

The directors shall in all respect comply with the following provisions of the Companies Act
1994;

a) Books to be kept by company and penalty for not keeping them U/S 181
b) Inspection of books of account, etc of companies U/S 182
c) Annual balance sheet U/S 183
d) Boards report U/S 184
e) Form and contents of balance sheet and profit and loss accounts U/S 185
f) Balance sheet of holding company to include certain particulars as to its subsidiaries U/S
186
g) Financial year of holding company and subsidiary U/S 187
h) Rights of holding company’s representatives and members U/S 188
i) Authentication of balance sheet, profit and loss account, etc U/S 189
j) Copy of balance sheet, etc to be filed with registrar U/S 190
k) Rights of members to copies of account and report U/S 191