CS Professional:Draft,Pleads and Appearances [Ch-3 Secretarial Practice of drafting Notice,Agenda and Minutes]

Co. meetings under Co. act,2013

1. Directors/Committee Meetings
2. Members Meetings
• AGM
• EGM
• Class Meetings
3. other meetings such as debentureholders/ bond holders/ creditors/ contributories

BOARD POWERS

• powers exercised by resolutions passed at Board meetings (179[3])
• exercised by unanimous consent 
• subject to passing Special Resolutions
• subject to other approvals such as National Company Law Tribunals or other regulators
• delegation to Committees and/or MD/manager or another principal officer

SECRETARIAL STANDARDS {SS}

Section 118[10] of the companies act, 2013

Section 205[1,6] holds responsible the Company Secretary for ensuring Compliance with applicable SS

SS-1: BOARD MEETINGS [applicable w.e.f. 01/10/2017]

all companies shall be observant except OPCs and such other classes exempted by Central Government (CG) through notification such as Section 8 Co./Specified IFSC co.

1. CONVENING a Meeting
• subject to articles, may be convened by any director or a CS/person authorized by board (PAB) on director's requisition by sending written requisition+agenda to Chair OR CS/PAB.
• mandatory for every meeting to have a serial number and original+adjourned to have the same.
• imp. cases
• In the case of [Sanjiv Kothari vs. Vasant Kumar Chordia (2005) 66 CLA 45 (CLB)]--- No parallel meetings.
• Aidqua Holdings (Mauritius) Inc. v. Tamil Nadu Water Investment Co. Ltd. and Others (2008)---specific place/city adhered as per articles.
2. NOTICE
• In the case of [Parmeshwari Prasad Gupta v. Union of India 1973 AIR 2389].
• clear venue, usually per articles as in case of Aidqua Holdings (Mauritius) Inc. v. Tamil Nadu Water Investment Co. Ltd. and Others (2008)
• virtual participation and subsequent physical participation communicated priorly to chair/CS [rule 3(3)]
• electronic meetings to have requisite physical quorum Or Chair/CS/duly authorized physically present during restricted items [rule 4]
• inform directors about availability of electronic mode attendance
• contact of necessary persons
• delivered by speed post/by hand/by regstd. post/facsimile/e-mail
• The director may choose a specified mode but shorter period notice is at co's discretion.
• preferably be sent on co. letterhead with specified details of each numbered item and draft resolutions as considered adequate.
• signed by CS/director/person authorized to issue notice
• mentioned that convened due to director's requisition
• It is mandatory to give at least 7 days before a meeting and 2 extra days for speed/ regstd./ courier.
• co. articles may prescribe a longer period but can't be reduced except for shorter notice.
• "SHORTER NOTICE" specifically stated
• shorter notice meeting valid with presence/ratification of an independent director OR a majority
• draft agendas and specimens in ICSI study material and items not in the agenda taken up in the meeting with chair's permission and majority consent of present directors.
3. MEETING FREQUENCY
• at least 4 in each calendar year with max. interval of 120 days in between two
• first within 30 days of incorporation
• this meeting will be sufficient for the remaining quarter
• OPC/small/dormant/pvt. start-up to hold one meeting in each half of the calendar year and the gap between first and last is 90/more days. (13/06/2017)
• committees to meet as often as necessary subject to law or the board
• independent directors,if any, shall meet at least once a calendar year (FY=05/07/17) without attendance of non-independent/mgmt. to review performance and flow of info
• since this is not a committee meeting,SS-1 unapplicable
• a record to be kept
• invitees : CS/PCS/MD/officer/expert
4. QUORUM
• present throughout,i.e, while transacting
• interested directors won't vote/be counted during discussions and voting except in pvt. co. after taking disclosures under 184. [rule 15(2)]
• disclosures given at FY's 1st meeting and whenever there is a change. [184,Rule 9]
• interested directors not to be present in 188 transactions
• 1/3rd of total OR 2, WHICHEVER IS HIGHER
• quorum stipulated by BoD subject to act/articles or all members presence will form a quorum,
5. ATTENDANCE
• pages of attendance register to be serially numbered
• separate sheets, if loose-leaf form;bound every 3 years
• particulars as prescribed by law
•  present/in attendance/invitees 
• deemed signed electronically,if attendance is recorded and authenticated by CS/chair/director after confirming attendance at roll call (rule 3[4,5]).
• The attendance register acts as conclusive proof and is open to inspection by all directors.
• maintained at RO or other board approved place
• destroyed with Bod's approval
• leave of absence granted and recorded in minutes when communicated to chair/CS
• if the director is absent from all meetings in 12 months with/without leave; automatic vacation and a notice sent to the concerned director.
• 167(1)(b)Bharat Bhushan v. H.B. Portfolio Leasing Ltd. (1992) 
• act contains no provisions for proxies
6. CHAIR
• already elected for co. or chosen by majority present as per articles
• Regulation 70 (i) of Table F of Schedule I to the Act
• if BoD stipulates the time period following the election,re-appointment or another appointment follows.
• ensure quorum,announce summary and conduct orderly meetings
• interested should vacate a chair and entrust a non-interested one with majority's consent.
• board may appoint one at committee's commencement
7. PASSING A RESOLUTION BY CIRCULATION
• urgent decisions
• deemed passed at a duly convened meeting having = authority.
• authority:Chair,MD,director other than interested decide if board approval needed
• fails when not less than 1/3rd directors (excluding vacant) require the resolution to be decided at a meeting.
• draft sent to all directors (including interested) on same day\
• min. 3 years for preserving proof of sending/delivery of draft and requisite papers.
• explained by a note setting out details whereas notice/agenda is unnecessary.
• passed when approved by the majority entitled to vote (disinterested) unless required to be decided at a meeting.
• deemed passed on earlier of:
• last date for signifying assent/dissent
• date on which majority approval is met if a meeting isn't required. if no other date is specified.
• SPECIAL MAJORITY: specified in articles
• every resolution to be serially numbered with a uniform/consistent system
• noted in all cases at a subsequent meeting (175[2])
8. MINUTES
• official recordings/evidence of meetings/business transacted
• Escorts Ltd. v. Sai Auto (1991) 72 Com. Cases 483 (Del)]
• V.G. Balasundaram v. New Theatres Carnatic Talkies Pvt. Ltd. (1993) 77 Com. Cases 324 Mad]
• no restriction in language
• A distinct minute book (physical/electronic)
• consistent/uniform recording mechanism and deviations authorized by board
• consecutively numbered pages
• blank page scored out and initialled by chair irrespective of recording medium
• no attaching/pasting
• for contents: refer Secretarial Standard-1 issued by ICSI
• guidance note by ICSI
  
• Recording: SS-1 harmonizes different practices and provides principles such as:
• understanding of what transpired at the meeting
• fair/correct summary
• not exhaustive record and only summaries/narration
• recorded by CS/BAP(board authorized person)/chair
• chair has discretion to exclude defamatory/irrelevant/immaterial matters
• clear,concise and plain language with brief synopsis
• unsigned docs not part of notes recorded and initialled by chair/CS
• supersession/modification of earlier resolution clearly referenced
• noting minutes of preceding/committee meetings
• finalized within 15 days of the meeting's conclusion and draft circulated to all members for comments.
• chair's discretionary power to consider comments received after expiry of 7 days from dispatch, if authorized by board
• entered in minutes book within 30 days of the meeting conclusion.
• date of entry recorded at last page
• no alteration except by board's express approval at subsequent meeting and alterations recorded in minutes of such subsequent meeting.
• signed/dated by chair; initial each page+sign last and append date/place
• once signed shall not be altered save as mentioned in this standard
• extracts provided only after duly entered in minutes book but certified copies (by chair/CS) can be issued when resolution is passed if text proposed to be passed had been placed before the meeting.
• text proposed included in notes to agenda
• resolutions can be implemented w/o waiting to be noted
9. PRESERVATION/DESTRUCTION OF RECORDS
• permanently with timestamp or as long as they remain current or 8 FYs and destroyed with board's approval [rule 15 of co. rules 2014]
• board approval and CG's permission wherever applicable
• custody of CS/director duly authorized

annexures/specimens can be referred to in the ICSI study material

 SS-2: GENERAL MEETINGS 

revised version applicable from 01/10/2017

applicable on all General Meetings (GMs)/debentureholders/creditors meetings except : OPCs,(8) co. wherever applicable.

conforms with co. act or else act shall prevail in case of ambiguity

1. GENERAL
• convened by board's authority
• notice
• in writing
• specify day,date,time and venue
• meeting serial no.
• notice+docs given at least 21 clear days before meeting (pvt. co per articles)
• by hand/ ordinary/ speed/ regstd.post/ courier/ facsimile/ email/ electronic means.
• not by ordinary in cases of:e-voting & postal ballot
• if mode is specified by a member,sent at the member's expense
• hosted on website till meeting conclusion or as articles provide
• containing proxy appointment details such as attendance slip and proxy form with clear instructions unless articles provide otherwise.
• special business in the form of resolution accompanied by explanatory statements containing relevant matters.
• ordinary resolutions not required to be stated in notice
• amendment to notice provided notice to amendment given to all members entitled to receive notice at least clear 21 days prior.
• the convened meeting with the same business after giving not less than 3 days intimation to members individually/published.
• business hours: 9am to 6pm; not on a national holiday
• held either @ RO or within town/city/village of RO
• govt. co.= RO or another place with CG's approved
• WOS of foreign co.= meeting held out of india also
2. FREQUENCY
• AGM
• first within 9 months of close of first FY
• thereafter within 6 months from FY closure
• interval of not more than 15 months
• 3 months extension with ROC approval other than first
• EGM
• as and when required between 2 consecutive AGMs
• items other than ordinary considered in EGM/postal ballot
3. QUORUM (103)
• present throughout
• unless articles provide for larger, it shall be:
• public co.
• 5 personally present if members as on the meeting date <1000.
• 15 if members as on the meeting date 1000<x<5000
• 30 if members as on date 5000<
• pvt co.
• 2 personally present
• proxies shall be excluded
4. DIRECTORS/AUDITORS PRESENT
• The director's absence explained and directors be seated with the Chair and CS to assist in conducting meetings.
• auditors/secretarial auditor unless exempted by co. have the right to be heard; authorized representatives must also be qualified to be auditors/secretarials.
5. CHAIR
• absent within 15 minutes/unwilling then if no director is designated, directors present elect one of themselves.
• no director present within 15 minutes then members elect one amongst themselves unless articles provide themselves.
• if a poll demanded on election, taken according to act or according to SS-2 in case of pvt. co.
• explain objectives/implications of resolutions before they are put to vote
• The chair shall not propose resolution or conduct that item if concerned/interested.
6. PROXIES
• appointed by a member entitled to vote/attend
• need not be a member and can act for <50 members & holding in aggregate <10% of the total share cap carrying voting rights.
• stated in notice accompanying proxy form-- MGT-11
• also stated that forms to be submitted not later than 48 hours before commencement of the concerned meeting.
• duly filled, properly stamped and signed valid for meeting+adjournment
• must state name
• duly dated
• later revokes prior
• recorded chronologically
• in case proxy rejected, reasons entered in remarks
7. VOTING
• every resolution except put by e-voting/poll shall be proposed and seconded by members and same recorded in minutes.
• every listed except on SME exchange/institutionalized trading platform shall provide for e-voting and put every resolution to vote through a ballot process in which proxies can vote.
• offered to physical/dematerialized shares
• open for not less than 3 days
• close at 5pm preceding general meeting day
• board approval for:
• appointing scrutinizers
• agency
• cut-off date for determining voting entitlement
• authorise chair/director to receive scrutinizer register+report+related papers with requisite details.
• notice as prescribed herein
• all resolutions voted with the show of hands at first instance except e-voting/poll in which proxies can't vote.
• The chair declares a poll on a valid demand either before/on result declaration of voting.
• poll when demanded, verified, ordered forthwith if demanded for chair appointment/adjournment, otherwise within 48 hours of demand announcing date,venue & time.
• The chair may permit any member wishing to be present at counting.
• if date,venue,time can't be announced, inform mode/time of announcement within 24 hours of meeting closure.
• scrutinizer to submit a report within 7 days from poll's last date to chair/PAB, who shall countersign and declare results in writing within 2 days of submission.
• pvt. co. declaration as above unless articles provide otherwise
• chair to have complete supervisory power
• displayed on notice board for at least 3 days
8. PROHIBITION ON RESOLUTION WITHDRAWAL
• likely to affect market price
• proposed for consideration through e-voting
9. resolutions not rescinded otherwise than resolutions passed at subsequent meetings.
10. modification not to materially change the purpose of resolution.
• no modification to a resolution already put to vote by remote e-voting
11. READING REPORTS
• auditors: adversely affecting functioning and attention drawn to explanations/comments by board in their report.
• secretarial auditors: having material adverse effect
12. ADJOURNMENT
• notice for
• sine-die or for 30/more days; notice in accordance
• for <30 days; not less than 3 days notice specifying relevant details individually/via an ad.
• resolutions passed at adjourned meetings deemed passed on adjourned dates.
13. POSTAL BALLOT RESOLUTIONS
• except co. having ≤ 200 members shall transact by postal ballot instead of at GMs.
• may also choose to transact special business not being those in which directors/auditors have a right to be heard
• ordinary business not transacted via this method
• every listed except SME exchange/ITP and other co. required to provide e-voting shall provide such facilities.
• co. having 1000/more members
• board approval
• notice of the postal ballot+explanatory statement
• relevant docs and sending
• scrutinizer & agents
• cut-off dates for reckoning voting rights
• notice details/content/validity in ICSI study material
• scrutinizer to submit report within 7 days from last receipt of postal ballot form and results displayed for at least 3 days on notice board and placed on website.
• resolution deemed passed on date specified for last receipt
• rescindment through subsequent resolution by postal ballot and no amendment/modification made to circulated resolutions
14. MINUTES
• same as for board meetings
• refer study material for general/specific contents
• electronic minutes should take the following into consideration:
• accessibility for reference
• format retained
• details facilitating identification of details shall be available
• MD/CS/other director or officer responsible for maintenance & security [rule 28 of co. rules 2014]
15. AGM REPORT
• every listed to make in prescribed form including confirmation of convening the meeting
• fair and correct summary
• signed/dated by chair or 2 directors (1 MD) and CS
• filed with ROC within 30 days of AGM conclusion
16. Disclosure in ANNUAL RETURN (MGT-7)

PRACTICAL ASPECTS of DRAFTING

• clear/distinct terms
• all essential facts included
• surplus/meaningless words not included
• references clearly identified
• relevant provisions/sections/rules/approvals
• indicate effective dates
• must confine to single subject matter
• crisp,concise,precise and flexible
• lengthy content divided into paragraphs
• descriptive

for resolutions/annexures/forms and specimens, refer to the modules provided by ICSI in their study material.