Comfort Hosiery Ltd. is a listed entity engaged in the business of manufacturing and selling of innerwear for all the age group of people. The company has paid-up equity capital of ₹ 25 crore. In the year 2016, the compa

According to Section 47(2) of the Companies Act, 2013 , every member of a company limited by shares and holding any preference share capital therein shall, in respect of such capital, have a right to vote only on resolutions placed before the company which directly affect the rights attached to his preference shares and, any resolution for the winding up of the company or for the repayment or reduction of its equity or preference share capital. His voting right on a poll shall be in proportion to his share in the paid-up preference share capital of the company. Further, the second proviso to Section 47(2) of the Act states that where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company. In the given situation, Comfort Hosiery Ltd. has not paid dividends to its preference shareholders for three financial years (2018-19, 2019-20, and 2020-21). Since the dividend has not been paid for a period of two years or more, the preference shareholders are entitled to vote on all the resolutions placed before the company. Hence, the Chairman's contention that only equity shareholders can vote and preference shareholders are not entitled to vote is incorrect .