SKP Business Alert
24 September 2015 | Volume 7 Issue 2
Notified Secretarial Standards introduce new rules for Board and General Meetings

The Ministry of Corporate Affairs notified two Secretarial Standards issued by the Institute of Company Secretaries of India.
  1. Secretarial Standard 1 on Meetings of the Board of Directors
  2. Secretarial Standard 2 on General Meetings
The Secretarial Standards are applicable to all companies irrespective of their size, type and listing status and came into effect on 1 July 2015. The Secretarial Standards seek to harmonise, incorporate and standardise diverse secretarial practices followed by companies, which would result in establishing better corporate governance principles.

In this alert, we highlight the important provisions of the Standards and the changes in procedures:

Board Meeting Shareholders' Meeting
Applicability
All companies except a one-person company Companies having meetings of shareholders, debenture holders, creditors except a one-person company
Authority to call meeting
Any director or a person authorised by the Board The Board of Directors or shareholders in certain cases
Frequency
One in each quarter. Gap between two meetings should not be more than 120 days.
Annual General Meeting (AGM): Every year within six months of the close of the financial year (interval between two general meetings should not be more than 15 months).
Extraordinary General Meeting: Any time
Time of the meeting
Any time except on a national holiday During business hours i.e. between 9am and 6pm on a day excluding a national holiday
Venue
Any place in the world is acceptable.

Full address of the venue is required in the Notice.

In case of meeting through video conferencing, the venue will be where the recording is done.
AGM: At the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated.
Other General Meeting: At any place within India
Notice
To be served to Directors at the address registered with the company.

Each meeting will have a serial number that should be mentioned in the Notice.

In case of meeting through video conferencing, the Notice shall also contain the contact number or email address(es) of the Chairman or any other person authorised by the Board, to whom the Director shall confirm attendance through video conference.

Shorter notice should be mentioned in the Notice itself.
To be served to Members, Directors and Auditors at the address registered with the company.

Notice shall be accompanied by an attendance slip and a proxy form with clear instructions.

Notice should contain complete particulars of the venue including route map and prominent landmark.
Mode of notice
By hand/speed post/registered post/courier/facsimile/email/any other electronic means.

Proof of sending the Notice must be maintained.
By hand/speed post/registered post/courier/facsimile/email/any other electronic means.

Proof of sending the Notice must be maintained.

For companies having a website, the notice shall be hosted on the website along with the route map.
Notice period
Seven days before the meeting unless the Articles of Association provide for a longer period. 21 days clear notice i.e. a 23-day gap is required.

Notice and accompanying documents may be given at a shorter period of time if written consent is given, by physical or electronic means, by not less than 95% of the Members entitled to vote at such meeting.
Agenda
Notice along with agenda.

A note setting out the details of the proposal, relevant material facts that enable the Directors to understand the meaning, scope and implications of the proposal and the nature of concern or interest, if any, of any Director in the proposal, which the Director had earlier disclosed shall be attached.

Each item of business needs to be numbered for easy reference.
Explanatory statement for special business.

If any document is referred to, in the resolution, then inspection details need to be given.

Appointment of Managing Director, Whole Time Director - details of each such Director or Manager, including age, qualifications, experience, terms and conditions of appointment or re-appointment along with details of remuneration sought to be paid and the remuneration last drawn by such person, if applicable, date of first appointment on the Board, shareholding in the company, relationship with other Directors, Manager and other Key Managerial Personnel of the company, the number of Meetings of the Board attended during the year and other Directorships, Membership/Chairmanship of Committees of other Boards.
Quorum
A disinterested quorum should be present throughout the meeting Two Members (unless Articles provide for a higher number) should be personally present throughout the meeting.

A Member who is not entitled to vote on any particular item of business being a related party, if present, shall be counted for the purpose of Quorum.

Directors also need to be present for the shareholders' meeting. In case they are not present, the Chairman needs to explain their absence.
Attendees
Directors Shareholders
Directors
Auditors, unless exempted by the company
Attendance Register
The Register should be serially numbered and shall be authenticated by the Chairman of the meeting.

It shall be open for inspection by the Statutory Auditor.

It is to be preserved for eight years.

Leave of absence shall be granted only when such leave application has been received by the company.
Minutes
Minutes can be maintained in electronic mode.

In the event any page or part thereof in the Minutes Book is left blank, it shall be scored out and initialled by the Chairman who signs the minutes.

Time of conclusion of the meeting must be mentioned in the minutes.
The draft minutes shall be circulated by hand/speed post/registered post/courier/facsimile/email/any other electronic means within 15 days of the meeting. Proof of sending the draft minutes needs to be maintained. All Directors need to communicate their comments on the minutes within seven days of circulation. In case of no such communication by the Directors, it will be deemed to be approved by them.

Copy of signed minutes needs to be circulated to all Directors within 15 days after the signature.
Minutes can be maintained in electronic mode.

In the event any page or part thereof in the Minutes Book is left blank, it shall be scored out and initialled by the Chairman who signs the minutes.

Time of conclusion of the meeting needs to be mentioned in the minutes.

SKP
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DISCLAIMER
This alert contains general information which is provided on an "as is" basis without warranties of any kind, express or implied and is not intended to address any particular situation. The information contained herein may not be comprehensive and should not be construed as specific advice or opinion. This alert should not be substituted for any professional advice or service, and it should not be acted or relied upon or used as a basis for any decision or action that may affect you or your business. It is also expressly clarified that this update is not intended to be a form of solicitation or invitation or advertisement to create any adviser-client relationship.

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