DIRECTORS

&
GROUP MEMBERS:
NUR
THE
BOARD
AND
HAFIDZAH
BINTICOMMITTEE
OMAR
2010555715
DIRECTORS
NUR HAFIZA BINTI MOHAMED KAMIL
2011104995
RUZANNA
BINTI
RAZUAN
2008371483
SITI FARIZA BINTI ABU TALIB
2011180573
NOOR AIIN BINTI HUSAINI
2007119047
NOR AZWANI BINTI ABDUL RASHID
2007268358
LECTURERS NAME:
MISS JULIANA BINTI MD JUSOH

APRIL 2008
PART A Question 3
Section 133 of the Companies Act 1965, prohibits a limited
company from giving loans to a director. What are the exceptions
to the rule?
Exception
Fund incurred for the purpose of the company or to perform his
duties
Given to directors who engaged in the full-time employment
acquiring home
Given to directors who engaged in the full-time employment
have a scheme to give loan to employee

Exception to person deemed connected

If the company business is lending the money finance co.
Where the loan is made or the guarantee or relation to the loan
provided to subsidiary or holding
The person engaged in full-time employment co. scheme

OCTOBER 2008
PART A Question 2
A company may appoint an associate director while a companys
director may appoint an alternate director to act on his behalf.
Distinguish between an associate director and an alternate director.
Alternate director

Associate director

Is person appointed by a member of the board

Purpose: to act & speak during periods of
absence/incapacity of the director
A director cannot appoint an alternate to act
UNLESS the Articles so authorized
Must give his consent to act the FORM 48A
before his appointment
Not required to hold qualification shares
Alternate director shall automatically be
vacated if substantive director vacates office
Alternate director entitle to receive:
a) notice of board meeting
b) to attend & vote
c) to exercise all powers of the substantive
director in his place

Not directors within the meaning of the

Act
Do not have the right to attend or vote
at any Board Meetings except by invitation
of directors
The title given normally for senior
executives, received salaries for the
purposes of:
i) To provide training for top mgmt with
the view to a Board appointment in future
ii) To improve their status within the
company and to deal with customers or
suppliers

PART B Question 1
a.

Determine the order in which the directors would retire at the companys
first, second and third AGM. (Support your answer with reason)

Answer : Answer Part B - Q1 oct 2008.doc

b.

Describe the procedure for the appointment of the

Managing Director

The appoint of MD is provided in Articles by BOD

If no provision in the articles, no appointment of MD can
be made
The directors will decide on the terms and condition (in
articles) of the appointment and the MD will sign a
contract of service
MD shall not be subject to retirement by rotation and the
appointment shall be terminated if ceases to be a director
The company can terminate his services though his term
has not yet expired

c.

What are the main tasks of independent non-executive

directors in the context of good corporate governance
practices?

To protect & act in the best interest of his employer as

shareholders in the company.

To help identify the right strategy that will improve

shareholders value

To balance up board structure and to give independent

view and judgment in making decision.

As a watchdog and monitors board process

To act as a Chairman of Committee meetings

To evaluate and monitor the decision making process

APRIL 2009
Part A Question 2.
Table A of the Fourth Schedule Companies Act 1965, stipulates
retirement of directors by rotation. Briefly explain how the
retirement by rotation of directors can be implemented by a
company.
Article 63 of Table A provides that for the first AGM all directors shall
retire from office except managing director.
Subsequent AGM - 1\3 of total director should retired.
Director must retire once in every Three years.
The longest director should be retired if tie determine by lot.
Article 66 of Table A provides that if the retiring director is eligible for reelection and offers himself for re-election, he will be deemed re-elected.
A director appointed to fill casual vacancy or as additional director shall
hold office until the next following AGM not subject to retirement by
rotation.
Executive director is not subject to retirement by rotation.

Question 7.
How may a director of public company be removed
under S128 of the Companies Act 1965?
Director Removal under S128
Member shall submit special notice to the company not less than 28 days before a meeting at
which the resolution is to be moved
The company upon receipt of any resolution coupled with special notice is required to give its
members notice of said resolution.
The company must also send a copy of the special notice to the director concerned.
The director mentioned is entitled to make representations in writing to the company and
request that the member of the company be notified accordingly.
This may either be stated in the notice convening the meeting or a copy of representations
be sent to every member of the company to whom the notice of meeting is sent.
If the resolution is carried out in the meeting the director is removed from the Board.

(b) The consequences if Johnson and

David failed to comply with the
requirement of the Articles of Association.
Your answered should refer to relevant
provisions of the Companies Act 1965.
Section 124 Share Qualification.
Based on Section 124 (1) stipulates that every
director, who is required by the Articles to hold a
specified share qualification, shall obtain his
qualification shares within two month after his
appointment, failing which he has to vacate his
office.

Part B Question 3
The procedure for the appointment of first
directors.

Must lodge Form 48A with CCM within 1 month

from the date of his appointment together with
form 49 and the Register of Directors,
Managers and Secretaries updated accordingly
The first two director shall be named in M&A,
and will hold office until the 1st AGM where
they will retire
Any subsequent appointment usually
appointed by the directors themselves for filing
of casual vacancy or as an additional director;
and will hold office until the next AGM where
they shall be eligible for re-election.

(c) With reference to Section 133 of the

Companies Act 1965, whether Johnson and
Maria could obtain a loan to purchase a home.

Yes, they can. Sec 133 of the Act states that the
co. shall not:
Make a loan to the director of the company
Make a loan to a director of a co. which is
deemed to be related to the co.
Enter into any agreement or provide any
security in connection with a loan made to such
director.
Exception :
Given to directors who engaged in the full-time
employment acquiring home.

(d) Persons who are deemed to be

connected with director according to the
Companies Act 1965 and whether Sally who
is Davids wife could obtain a personal loan
from the company.
Yes, they can. Sec 133 of the Act states that the
co. shall not:
Make a loan to the director of the company
Make a loan to a director of a co. which is
deemed to be related to the co.
Enter into any agreement or provide any security
in connection with a loan made to such director.
Section 133A of the Act extends the above
provisions to persons deemed connected with
directors. Exceptions to this rule are :
The person engaged in full-time employment
co. scheme

OCTOBER 2009
Part A Question 6
State four (4) exceptions to the general rule
pursuant to the Companies Act 1965 prohibiting
a company from giving loans directors.
Exception:
Fund incurred for the purpose of the company or to
perform his duties
Given to directors who engaged in the full-time
employment acquiring home
Given to directors who engaged in the full-time
employment have a scheme to give loan to
employee.
If the company is exempt private company

Part B Question 1
(a)Why and how should Razlan appoint
another director?
Because he recently lost his wife. A director shall
become vacant in the following circumstances:
Death - If only have 1 director, any shareholder
can request to appoint new director.
He must lodge Form 48A with CCM within 1
month from the date of his appointment together
with form 49 and the Register of Directors,
Managers and Secretaries updated accordingly.

(b) Whether a Board of Directors

resolution can be validly passed
without holding a meeting.
The resolution is not valid passed
without holding a meeting. Meeting as
an assembly of two or more people for
lawful purposes.
Characteristics:
A collective decision on each
resolution at the meeting.

(c) Whether a Board of Directors

meeting can be held when the
directors are at different locations.
Can be held when the directors are at
different locations. Place of meeting
S145A
Hold all the meeting within Malaysia
Hold a meeting within Malaysia at
more than 1 venue Technology
allowed members to participate.

(d) Four (4) circumstances in which one person may

constitute a valid quorum for a meeting. Clearly
explain each of those circumstances.
Quorum minimum no. required to attend meeting
AOA Prescribe the no. & if not according to S147(1)(A)
at least 2 members
Exceptions of General Meeting :
Creditors Meeting 1 person hold the proxies of others
creditors.
Class Meetings if the particular class held by 1 person
only.
Meeting of Wholly Owned Subsidiary only 1 person
represent the holding.
By Statute by court direction.
Purported wrongful act of others shareholders.

APRIL 2010
Part A Question 1.
What are the two (2) document that are required to be filed with the Companies
Commission of Malaysia pursuant to changes in the board directors and what is the
time frame for filing?
FORM 48A
S123(4) ca 1965 every person to lodge with CCM a statutory declaration by way of form 48A
(statutory declaration by a person before appointment as director, or promoter) before
incorporation of corporation
He is not undischarged bankrupt
He has not been convicted of any offence in connection with the promotion, formation or
management of a company s130 (1)(a) involving fraud or dishonesty punishable on
conviction with imprisonment for 3 month or more
He has not been imprisoned for any offence within the period or five year immediately
preceding the date of declaration
He consent to act the director
FORM 49
Further, on appointment as well as upon cessation of the director to hold office, form 49 (return
giving particular in register of director, manager and secretaries and changes of particulars)
must be lodge with the CCM within 1 month upon appointment or cessation from office

Question 3
State four (4) circumstances which would require a director to vacate
his office pursuant to the Companies Act 1965.
The office of a director shall become vacant in the following circumstances :
Under section 125-being adjudicated a bankrupt every person who being an
undischarged bankrupt act as director or indirectly takes part in the
management of company unless he has obtained leave form court to continue
his office shall be guide of an offence
Under section 130-disqualification by court order state that where a person
convicted whether within Malaysia or outside Malaysia of any offence relating to:
Promotion , formation and management of a incorporation
Involve fraud or dishonestly punishable on conviction with imprisonment
for 3 month or more or
Section 132 (as to duty and liability of officer ) , 132a (dealing by officer in
securities ) and 303 (liability where proper account not kept) within a
period of 5 year after his conviction or his release from prison if he is
sentenced to imprisonment, unless leave from court is obtain under
section 130 of the act
Under section 124 -stipulates that every director failed to acquire the specified
share qualification as required by the article by the association within 2 month
after the appointment has to vacate the office
Under section 129 -age for director no person over the age of 70 year shall be
appointed or act as a director of a public company or subsidiary of a public
company. The office shall become vacant at the conclusion of the AGM
commencing next after he attains the age of 70

Part B Question 1.
Advise the board and briefly discuss the statutory provisions of the Companies
Act 1965 that would affect the above situations.
Jasmine
The proposal for the loan is valid because the loan provide to a director is to meet expenditure
incurred or to be incurred by her for the purpose of the company or for purpose of enabling her
to perform his duties as a officer of the company
Section 133 state that the company (other than an exempt private company) shall not:

Make a loan to the director of the company or

Make a loan to the director of a company which is deemed to be related to the company
Enter to any agreement or provide any securities in connection with the loan made to such
director

However there is exception to the rule state that any fund provided to the director to meet
expenditure incurred or to be incurred by him to perform his duties as an officer to the company
is sanctioned

Jamal
The proposal of the loan is invalid because the loan provided to the director is not to meet
expenditure incurred or to be incurred by her for the purpose of the company or perform his
duties as an officer of the company. Furthermore, exception to the rule state that, fund given by
the company to the director who is engaged in full time employment of the company to meet
expenditure incurred or to be incurred by him in purchasing a home. Related to the case, hr is a
non-executive director (not working full time) for the company therefore he is not eligible for
the loan.
Section 133 state the company (other than exempt private company) shall not

Make a loan to a director of the company or

Make a loan to a director of a company which is deemed to be related to the company
Enter into any agreement or provide any security in connection with a loan made to such director

Lim
The proposal for the loan is valid because the recent annual general meeting of the
company has approved scheme of loan to employees to purchase share of the
company and director is engaged in a full-time employment of the company
Section 133 state at the company (other than an exempt private company) shall not
Make a loan to the director of the company or
Make a loan to the director of a company which is deemed to be related to the
company
Enter to any agreement or provide any security in connection with a loan made to
such director

However, there is exception to the rule state that, any loan given to a director who is
engaged in the full-time employment of the company where the company has at the
general meeting approved of a scheme for the making of loan to employee of the
company and the loan is in accordance with that scheme. If the approval of loan is
not given as aforesaid, the director authorizing the making of loan shall be jointly or
severally liable to indemnify the company again any loss arising there from. The loan
shall be repaid within 6 month from the conclusion of that meeting.
Salim
The proposal of the loan is invalid because the security provide in connection with a
loan made to salim is for his personal loan which obviously not to meet the
expenditure incurred or to be incurred by him for the propose of the company.
Therefore, the board of director cannot approve such loan since it will contravene
section 133

Section 133 of the company act 1965 state that the company (other than exempt
private company) shall not enter into any agreement or provided any securities in
connection with a loan made such director

OCTOBER 2010
Part B Question 1
(a) When is the last acceptable date Cempaka Deco
Berhad must hold its AGM in the year 2009? State your
reasons.
The date of AGM must hold on 30/06/2009 due to 6 month
after financial year end. FS should be tabled in AGM
before lodge to CCM
Section 143 of Companies Act 1965:
* 1st AGM Not later than 18 month from the date of
incorporation
* Subsequent AGM Not later than 15 months from the
date of preceding AGM
* 6 month after financial year end. FS should be tabled in
AGM before lodge to CCM

(b) Who are the directors that should be

recommended for the re-election or
reappointment at the forthcoming AGM in 2009?
Support your answer for the re-election or
reappointment of directors?
Answered : Oct10 Part B Question 1

(c) Section 128 (1) of the Companies Act 1965

provides for the removal of the directors of a
public company. Describe the procedures to
remove
directors
of a public company.
Director
Removal
under S128
Member shall submit special notice to the company not less than 28
days before a meeting at which the resolution is to be moved
The company upon receipt of any resolution coupled with special
notice is required to give its members notice of said resolution.
The company must also send a copy of the special notice to the
director concerned.
The director mentioned is entitled to make representations in
writing to the company and request that the member of the
company be notified accordingly.
This may either be stated in the notice convening the meeting or a
copy of representations be sent to every member of the company to
whom the notice of meeting is sent.
If the resolution is carried out in the meeting the director is
removed from the Board.

APRIL 2011
Part A Question 8.
A person must make a statutory declaration and lodge it with the
Companies Commission of Malaysia before appointment as director of
a company. State the required form and the declaration to be made
by the director.
A person before his appointment as a director must lodge Form 48A with CCM
within 1 month from the date of his appointment together with form 49 and
the Register of Directors, Managers and Secretaries updated accordingly
thereafter.
The statutory declaration to be made by the director :
Natural person of full age (18 years old)
he is not a bankrupt
he has not been convicted whether within or outside Malaysia of any offence.
he has not been convicted or he has not been imprisonment of any offence
within the period of 5 years immediately preceding the date of the declaration.
he consent to act as a director of the company.

Part B Question 5
(a) Difference between transfer of shares and
transmission of shares.

(b) Describe the procedure to transfer of shares in a

public listed company.
Need to open trading account with issuing house or CDS account
with ADA
A transaction start when order given by the client to his remisier
to buy or sell a specified number of shares of a co. at a specified
price
The order will key-in in WINSCORE terminal at the stockbroking
firm and then relayed through Bursa Malaysia Central computer
if confirmed routed back to the broking co.
The order than match automatically with the system price
determined by market sold at highest price, purchase at lowest
price
Once the order matched confirmation printed out at the broker
office providing detail such as original order no. stock no., price
and quantity matched and the counter-party broking co. the
remisier with confirm with the client about the purchase and sell
The broking house will then send out contract notes to the client
giving details about the transaction
Under CDS no physical delivery of shares simple books system
to keep track of the movement of shares
The buying client will be informed that shares had been transfer to
CDS account, however cannot trade the shares until the payment

(c) Describe the procedure for resignation of

independent non-executive director.
Under the provision contained in the Articles of
Association, a directors may resign from his office. The
directors shall become vacant if he resigns from his office
by giving notice in writing to the company.
Acceptance of the resignation by the company is not
required unless the Articles provide otherwise.
If the Articles provide that a resolution should be passed
before a directors resignation is effective, then the
resignation will not be effective until the resolution is
passed.
Section 141(6)(b) states that the company must notify
the CCM of the resignation. Failure to comply with the
procedural requirement to notice CCM on the directors
resignation , will not force a person to remain as director
without her consent.
Should update form 49 and register of directors,
managers and secretary book

(d) Can she resign if the effect of her

resignation will leave the company with less
than two directors? Briefly explain.
Directors may not resign if the effect of his
resignation will leave the company with less than
two directors, or with no director.
Only a person who is disqualified from being a
director by the provisions of the Act or the articles
may resign notwithstanding that he is one of the
last two directors, or is the last director.
Puan Sri Anis must appoint a replacement director
to replace her as a director before she leave the
company for her resignation if the is less than two
directors on the date that she want to resign.
Puan Sri Anis must appoint an alternate directors
or substitute directors who shall automatically be
vacated if the substantive directors vacates office.

JANUARY 2012
Part A Question 1
A director must make a statutory declaration by executing
Form 48A to the Companies Commission of Malaysia. Briefly
explain the contents of FORM 48A.
FORM 48A (Statutory Declaration by a person before appointment as
director or by a promoter before Incorporation of the company)
There must be at least 2 promoter as 1st directors or 1st subscribers
to the Memorandum Of Association of the company and each
promoter must sign a separate FORM 48A , as required by section
123(4) of Act.
Each of promoter must make a statutory declaration that :He is not undischarged bankrupt
He consent to act as a director of the company
He has not convicted with the following offence :Connection with the promotion, formation or mgt of the co.
Involve in fraud or dishonesty
Has been imprisonment within the period of 5 years
Offence under sec 132,132A and 303 of CA, within a period of 5 years

Question 6
State four (4) possible circumstances that may disqualify a
person to act as a director by virtue of the provisions in the
Articles of Association.
4 possible circumstances that may disqualify a person to act as a
director by virtue of the provisions in the Articles of Association :Resignation.
The Articles of the company provide the manner in which a director
can resign from his office. The officer of director shall become
vacant if he resigns from his office by giving notice in writing to the
company.
Lunatic
A director will have to vacate his office if he is diagnosed to be
suffering from mental disorder and confirmed unfit to be a director
of the company.
Absent from the board meeting
The officer of a director shall become vacant if he is absent from
directors` meetings for more than six months consecutively without
permission of the board.
Is directly or indirectly interested in any contract or proposed
contract with the company and fails to declare the nature of his
interest in manner required by the Act.
Becomes bankrupt or makes any arrangement or composition with
his creditors generally

Part B Question 3.
(a) Describe the procedure for the appointment of
the first director, in accordance with section 122
of the Companies Act 1965.
Section 122(3) of the Act states that the first directors of
company shall be named in the M&A. The first directors
are deemed to have been appointed on the
incorporation of the company and will hold office until
the first AGM where they will retire.
Any subsequent appointment is governed by the M&A
and they are usually appointed by the directors
themselves for filling of casual vacancy or as an
additional director. The Articles of the company usually
provides that directors appointed to fill casual vacancies
or as additional directors shall hold office until the next
AGM when they shall be eligible for re-election

(b) Briefly explain the procedure for the

appointment of a managing director.
Appointment of Director
Must lodge form 48A with CCM within 1 month
from the date of his appointment together with
form 49 and the Register of Directors,
Managers and Secretaries updated accordingly.
The first of two director shall be named in
M&A, and will hold office until the 1st AGM
where they will retire
Any subsequent appointment usually
appointed by the directors themselves for
filling of casual vacancy or as an additional
directors; and will hold office until the next
AGM where they shall be eligible for reelection.

(c) Draft a notice for the first board of directors

meeting of the company.
Answered : Notice Of Annual Report.

(d) Explain the Code of Ethics for

company director in relation to good
corporate governance.
Based on principles in relation to sincerity,
integrity, responsibility and corporate social
responsibility.
Establish a standard of ethical behavior for
directors based on trustworthiness and value
can be accepted.
Uphold the spirit of responsibility and social
responsibility in line with the legislation,
regulations and guidelines for administering
a company.

JUNE 2012
Part A Question 5
Bursa Malaysia requires that at least two directors or onethird of the board members to be independent directors.
What are the necessary qualifications to become an
independent director?
A director is deemed independent if he meets the following
qualifications :Is a non-executive director
Not an officer of the company within the last two years
Not a major shareholder of the company
Not a relative of any executive director, officer or major
shareholder
Not acting as nominee of any executive director
Has not been engaged as a professional advisor by the company
Not engaged in any transaction with the co. or represent a
partner, director of corporation which engaged any transaction
with the company

Part B Question 2
(a) Determine the order in which the directors
would retire at the companys first, second and
third AGM. Support your answer with reasons.
Answered : Answer Part B - Q2 June 2012

(b)Mr. Kamarul has been urging the board of

directors to give him a loan of RM500,000 to
purchase a bungalow befitting his status as a
director of the company. Discuss the relevant
provisions with regard to Mr. Kamaruls request.
According to Section 133 a company (other than an
exempt private company) shall not make a loan to;a director of the company
a company or person which by virtue of section 6 is
deemed to be related to that company,
enter into any guarantee or provide any security in
connection with a loan made to such a director.
Under certain exception, the loan can be made to directors
if the fund incurred for the purpose of the company or to
perform his duties.
Mr. Kamarul has been urging the board of directors to give
him a loan of RM500,000 to purchase a bungalow befitting
his status as a director of the company. He not entitled
because he is additional director. Funds give to director
who is engaged in the full-time employment of the
company or its holding company to meet expenditure
incurred or to be incurred by him in purchasing or
otherwise acquiring a home.

(c) Distinguish between executive and nonexecutive directors.

Executive
Director

Are full time

employee
Draw salaries from
the company
Performing
managerial function
They are members of
BOD with specific
executive
responsibilities
Eg. Financial Director

Non-executive
Director

Not employee of the

company
Receive fees (determined
by the members at general
meeting)
To protect and act in the
best interest of his
employer as shareholders
in the company
They are member of BOD
without specific executive
responsibilities

JANUARY 2013
Part A Question 9
Describe the procedure for resignation of
an independent non-executive director.
The resignation of an independent non-executive
director of the company is providing in the Articles
of the company.
The office of director should give his written notice
to the company if he wants to resign from his
position.
Acceptance of the resignation by the company is
not required unless the Articles provide otherwise.
If the Articles provide that the resolution should be
passed before a directors resignation is passed

Part B Question 5
Draf a memorandum to the Board of Director to
advise them and to discuss the statutory provisions
of the Companies Act 1965 that would affect the
validity of each of the above situations.
(a)Subject to subsection (2) and section 132F, a company
shall not carry into effect any arrangement or transaction
where a director or a substantial shareholder of the
company or its holding company, or a person connected
with such a director or substantial shareholder acquires or is
to acquire shares or non-cash assets of the requisite value,
from the company; or disposes of or is to dispose of shares
or non-cash assets of the requisite value, to the company.
In the case, Puan Salmah is sister of Puan Anie (Finance
Director of Tekstil Warisan). Thats mean, Puan Salmah is a
person connected with Puan Ani. So the company can not
purchase property from Puan Salmah.

(b) Cik Amy is an executive director because have been appointed

as Head of the Marketing Department. She is a full time employee
that performing managerial functions. She is members of BOD
with specific executive responsibilities.
Sec 133 of the Act states that the co. shall not:
Make a loan to the director of the company
Make a loan to a director of a co. which is deemed to be related
to the co.
Enter into any agreement or provide any security in connection
with a loan made to such director
Exception:
Fund incurred for the purpose of the company or to perform his
duties
Given to directors who engaged in the full-time employment
acquiring home
Given to directors who engaged in the full-time employment
have a scheme to give loan to employee
So, under the exception which the loan is given to directors who
engaged full time employment for acquiring home was make the
loan to Cik Amy is valid.

(c)Under section 129 age limit for directors of the company no

person of or over the age of seventy years shall be appointed
or act as a director of a public company or of a subsidiary of a
public company.
Since Tuan Haji Adam has reach the age of 70, he shall
become vacant at the conclusion of the annual general meeting
commencing next after he attains the age of seventy years or if
he has attained the age of seventy years before the
commencement of this Act at the conclusion of the annual
general meeting commencing next after the commencement of
this Act.
Tuan Haji Adam decided to remain as the companys directors,
he may by a resolution of which no shorter notice than that
required to be given to the members of the company of an
annual general meeting has been duly given, passed by a
majority of not less than three-fourths of such members of the
company as being entitled so to do vote in person or, where
proxies are allowed, by proxy, at a general meeting of that
company, be appointed or reappointed as a director of that
company to hold office until the next annual general meeting of
the company or be authorized to continue in office as a director
until the next annual general meeting of the company.

(d) Under section 133 of the Companies Acts states that

a company (other than an exempt private company)
shall not make a loan to a director of the company or of
a company which by virtue of section 6 is deemed to be
related to that company, or enter into any guarantee or
provide any security in connection with a loan made to
such a director by any other person.
Section 6 of the Companies Acts 1965, when
corporations deemed to be related to each other. Where
a corporationis the holding company of another
corporation,is a subsidiary of another corporation; oris
a subsidiary of the holding company of another
corporation.
In the case above since the Rekacipta is the subsidiary
of Tekstil Wawasan. SO Tekstil Warisan can not enters
into any guarantee in connection with a loan made by
Mr. Lee Chee Meng. Furthermore, he made a loan for his
personal not for the use of the business.

JUNE 2013
Part A Question 3
What are the exceptions to the general rule under
section 133 of the Companies Act 1965 that
prohibits companies from making loans to
Directors?
Answered :

Same with Oct09 Part A Q6

Part B Question 3
(a)Explain Zaras potential conflict of interest in HWB
as provided in section 131 of the Companies Act 1965.
Section 131 of the CA provides:
that a director who is in any way interested in a
contract or proposed contract with the company
(whether directly or indirectly), is required to declare the
nature of his interest at the meeting of directors as soon
as practicable, after the relevant facts have come to his
knowledge
A director must also declare his interests in any property or
office held where there might be a conflict of interest
Interest in shares and debentures the director should
disclosed any changes in interest in shareholding and
debentures

(b) Explain the procedure on how to remove Zara as a director of HWB.

Section 128. Removal of directors.
Shareholders of a public company may remove any of the directors by an ordinary
resolution before the expiry of the period of office. The removal however does not
affect the director's right to compensation for breach of contract if there is a contract
of employment between the director and the company. The right of shareholders of a
public company to remove a director exists notwithstanding anything in the
memorandum or articles or in any agreement with the company.
However, where any director so removed was appointed to represent the interest of a
particular class of shareholders or debenture holders, the resolution to remove him is
not effective until his successor has been appointed [section 128(1)].
A special notice is required for any resolution to remove a director of a public
company or to
appoint some person in place of a director so removed. On receipt of notice of an
intended
resolution to remove a director, the company must send a copy to the director
concerned and
the director shall be entitled to be heard on the resolution at the meeting [section
128(2)].
Where a special notice is given, the director to be removed can make representation
in writing to the company (a right to protest removal). And any notice of the resolution
to the members of the company, must state the fact that the representation has been
made and send a copy of the representation to every member of the company. If the
representation is received too late or because of the company's default, the director
can require that the representation be read out at the meeting [section 128(8)].

(c) What will be the roles, duties and responsibilities of

Widia if she is appointed as an alternate director in
HWB?

She purpose to act & speak during periods of

absence/incapacity of the director
Alternate director entitle to receive:
a) notice of board meeting
b) to attend & vote
c) to exercise all powers of the substantive director in
his place

(d) Explain the procedure in appointing Shanaz

as an additional director of HWB.
Must lodge Form 48A with CCM within 1 month from
the date of his appointment together with form 49 and
the Register of Directors, Managers and Secretaries
updated accordingly
The first two director shall be named in M&A, and will
hold office until the 1st AGM where they will retire
Any subsequent appointment usually appointed by
the directors themselves for filing of casual vacancy or
as an additional director; and will hold office until the
next AGM where they shall be eligible for re-election.

THANK YOU