PREPARED FOR: PM ALICIA TAN PREPARED BY: NUR HUSNA RASHID

PART A  QUESTION 1 (C) With regard to meetings, what is a quorum? Discuss the quorum for a meeting of an audit committee as provided by Bursa Malaysia Listing Requirement(4marks)

ANSWER  QUORUM ~ the minimum number of persons (who are entitled to attend the meeting) required to be present to constitute a meeting to validly transact the business of meeting. If there is no quorum, there is no meeting. Thus, any business transacted and resolution passed is invalid.  Quorum of Audit committee (Bursa Malaysia Listing Requirement) Para BMLR ~ in order to form a quorum in respect of a meeting of an audit committee, the majority of members present must be independent directors. ~ This means that the quorum of audit committee depends on the number of member present and there is only a quorum if there is majority independent directors present. ~ for example, for an audit committee consisting of three members of which two are independent directors, the quorum should be two members who are independent directors.

 Question 1(i) with regards to company meetings, explain what is class meeting and briefly explain the reason why is a class meeting held? (4marks)

Answer  Class meeting ~ class meeting are meeting of the holders of class of shares of the company such as preference shares. ~ Article 4 of Table A provides that the quorum for a class meeting shall be 2 persons at least holding or representing by proxy, one-third of the issued shares of the class.  Why is class meeting held ~ the class meeting are held in the situation concerning variations of class rights and privileges attached to a class of shares or a compromise or arrangement under section 176 of CA It may be necessary to call a meeting of the holders of certain class of shares.

PART B  QUESTION 3 ~ You are the company secretary of Permata Sdn Bhd which had its board of directors meeting today. The board of directors meeting was requisitioned by Encik Rahman, the Finance Director of the company to discuss the proposed reorganization of the company and to review the company’s financial performance for the payment of final dividend. The following took place during the meeting: ~Advise the chairman of the meeting in relation to the scenarios based on the provisions of the Article of Association.

 Question 3(a) ~ Datuk Razak, the chairman of the company was 15 minutes late for the meeting and members of the board decided to appoint Encik Rahman to chair the meeting. Encik Bakar, an executive director who had just recently been appointed to the board, questions the validity of the appointment of Encik Rahman to chair the meeting. He also questions the validity of the meeting, as it was requisitioned by Encik Rahman not Datuk Razak, the chairman of the company.

Answer  Article 85 ~ the directors may elect a chairman of their meetings and determine the period for which he is to hold office. If no such chairman is elected, or if at any time the chairman is not present within ten minutes after the time appointed for holding the meeting, the director present may choose one of themselves to be chairman of the meeting. ~ Encik Bakar is questions the validity of Encik Rahman to chair the meeting. As stated in the article 85 above, if chairman not present within 10 minutes, the present members may choose one of themselves to be chairman. Datuk Razak, the chairman of the company was 15 minutes late, therefore, the appointment of Encik Rahman to chair the meeting is valid.

 Article 79 ~ the directors may meet, adjourn and otherwise regulate their meeting as they think fit and that a director may at any time requisition for a directors' meeting and the secretary shall summon a meeting on such requisition. Normally, the chairman would requisition for board meetings. ~ En Bakar also questions the validity of meeting as it was requisitioned by En Rahman not Datuk Bakar. Based on the article above, the director may at any time requisition for directors’ meeting. Therefore, the meeting is valid even though it was not requisitioned by Datuk Bakar.

 QUESTION 3(B) ~ Based on the company’s financial performance during the year, Encik Rahman proposes that the company pays a final dividend of 5%. However, some of the members of the board felt that because of the good financial performance of the company, the company should pay a final dividend of 8% to shareholders. The matter was put to a vote resulting in an equality of votes. The chairman is now unsure as to how he should resolve the matter.

Answer  Article 80 ~ provides that questions arising at any meeting of directors are decided by a single majority of votes and a determination by a majority of a directors is for all purposes deemed a determination of the board. The chairman has a second or casting vote in the case of equality of votes, other directors have only one vote each. ~ Based on the situation in the question, the chairman can use his second or casting vote to resolve the situation where there is an equality of votes such stated in the question.

QUESTION 3 (D) ~ After a lengthy discussion on the matter relating to the proposed reorganization of the company, Encik Hasan the managing director suggests that the board appoints a committee headed by the Finance Director to further study the implications of the proposed reorganization. Encik Hasan also suggests that the board delegates the power to committee to decide on the proposed reorganization and to inform of its decision. The chairman is unsure whether the article of the company allow the board to delegate such powers to the committee.

Answer  Articles 86 ~ The board may delegate any of their power to committees consisting of such members of their body as they think fit. The committee so formed can only exercise the power so delegated and must conform to any regulation that may be imposed on it by directors. ~ Based on the article above, the board can delegate such power to the committee to further study the proposed reorganization and to decide on the proposed reorganization. However, the power only restricted to the matter of the proposed reorganization.

 QUESTION 5 ~ Createc Sdn. Bhd started as modest producer of drawing boards for engineers and architects. Over the years, the company has expended and the company is now producing worktops for computers. To further expand the company, the board directors of Cretec Sdn.Bhd has decided to increase the authorized share capital of the company from RM 1,000,000 ordinary shares of Rm1 each to RM 5,000,000 ordinary shares of RM1 each by creating an additional 4,000,000 ordinary shares of RM1 each. These shares will have the same rights and privileges as the current ordinary shares.

Since Createc Sdn. Bhd has only 5 shareholders, the board of directors decided to seek members’ approval via members circular resolution as provided by Section 152A instead of convening an Extraordinary General Meeting. The company’s article of Association requires that the company pass an ordinary resolution to increase its share capital. a) Draft the members' circular resolution(9 marks) b) Describe the corporate actions that must be taken by you, the company secretary of Createc Sdn. Bhd, after passing of resolution to increase authorized share capital (5 marks)

Answer  Question 5(b) ~ After passing resolution to increase authorised share capital, the company secretary shall lodge to Register of companies the following document within 14 days after passing resolution: - Form 11 (Notice of resolution) - Form 28 (Notice of increase registered capital) -fees for increase authorised share capital ~ then, the copy of form 11 shall be insert into every copy of memorandum