J. J. Gandhi Practising Company Secretary & Insolvency Professional

1. SECRETARIAL STANDARDS SS1 & SS2 J. J. Gandhi Practising Company Secretary & Insolvency Professional F 46, India Bulls Mega Mall, Besides Dinesh Mill, Jetalpur, Vadodara jjgandhics@gmail.com, Mob. 9374620085 5th May, 2018 CS J J Gandhi PCS

2. Why Secretarial Standard? • SS is step towards standardization of diverse secretarial practices • SS address areas where • Law is silent • Law needs clarity • Law has multiple meanings • SS compliance is mandatory to all company except OPC and Sec. 8 Company CS J J Gandhi PCS

3. SS is in conformity with the Act and Rules. • However, if due to subsequent changes in the Act, particular SS or any part thereof becomes inconsistent with the provisions of the Act, then the provisions of the Act shall prevail over SS. CS J J Gandhi PCS

4. Functions of the Company Secretary is to ensure that the Company complies with the applicable SS [Sec. 205(1)(b)] SS means issued by the ICSI and approved by the CG. Every company shall observe SS with respect to General Meetings and Board Meetings [Sec. 118(10)] As per requirement of MR3 a Secretarial Auditor has to mandatorily report non-compliance of SS in his report. Now, it is mandatory for every company to Report about compliance of SS in its Boards’ Report Revised SS is effective form 1st Oct., 2017 Importance of SS CS J J Gandhi PCS

5. SS1 Applicable to Meetings of Board & Committees of Board

6. Notice of Board Meeting • BM Notice can not be sent by ordinary post. • Notice to be given to original Director evenif it is sent to Alternate Director • If BM held at shorter notice it is required to be specified in the Notice. • Proof of sending notice of BM, Agenda and their delivery to be maintained as per decision of Board but such period shall not be less than 3 years • UPSI can be given to Directors at shorter notice than 7 days as per decision of first BM of each FY and also whenever there is change in Directors • Other business not included in the Agenda can be taken up with the permission of chairman and consent of majority of Directors. CS J J Gandhi PCS

7. Frequency of BM • To hold 4 BM in a calendar year with maximum gap of 120 days. No requirement to hold BM in each calendar quarter. • In case of adjourned meeting gap of 120 days will be counted from the original meeting and not from adjourned BM • OPC, small Company and Dormant Company can hold one BM in each half of calendar year and gap shall not be less than 90 days CS J J Gandhi PCS

8. Quorum • Interested director neither counted for quorum nor participate for related Agenda. • However, Director of Pvt. Comapny after disclosure of interest can participate and vote on related Agenda • Quorum for meetings of Committee, if not specified by the Board at the time of constitution then presence of all members of Committee are required. CS J J Gandhi PCS

9. Attendance of Board Meeting • Attendance register in Loose leaf form required to be bound once in every 3 years • Attendance register deemed to have been signed by those who participate through VC but his attendance required to be authenticated by CS or by chairman • Attendance Register to be preserved for atleast 8 FY • Shareholder can not inspect Attendance Register • Director who cease is entitled to inspect Attendance Register during the period of his Directorship CS J J Gandhi PCS

10. Circular Resolution • Circular resolution is to be circulated to all directors including interested directors • One third Directors (including interested Directors) can decide that Circular Resolution to be passed at meeting • In circular resolution seven days time is given to exercise option of assent or dissent • If Director who does not respond till last date, then it is presumed that he has abstained form voting • If out of 9 directors six Directors have approved CR still company need to wait till last date. Remaining one third Directors can decide Circular Resolution to be passed at meeting. CS J J Gandhi PCS

11. Minutes • Separate minute book for Board and committee • Minute book in electronic form to be signed digitally with time stamp • Pages to be continuously numbered even though bound in different books • Minutes to mention serial number commencement and conclusion time • Minutes to include text of circular resolution including dissent or abstention • Minutes written in past tense and resolutions in present tense • Minutes of the preceding BM is noted and not signed in the next BM CS J J Gandhi PCS

12. Within 15 days minutes are circulated for comments of Directors. Director who ceased after BM is entitled to receive draft minutes and can also offer comment • Director (including absentee director) can communicate their comments in writings within 7 days • Minutes to be entered within 30 days and CS has to record the date of entry in minute book • Directors can waive their rights to receive signed minutes within 15 days of signing. However, Resolution should have been passed for such waiver. CS J J Gandhi PCS

13. Ex Director is entitled to inspect the minutes during the period of his Directorship • Extract of minutes can be given only after minutes is entered in the minute book • Certified copy of resolution can be given immediately after passing in the Board Meeting if the text of resolution is placed at the meeting. • Minutes of all meetings to be preserved permanently. • In case of merger - minutes of transferor company to be maintained permanently by the transferee Co. • If there is CS minutes are in his custody. If no CS Board Resolution is required to give custody to one of the Director. Care is required to include this resolution in a company where there is no CS. CS J J Gandhi PCS

14. SS2 Applicable to Meetings of Members/ shareholdersDebenture holdersCreditors

15. Notice of AGM/EOGM • Given to Members, Directors, auditors, Secretarial Auditors, debenture trustee • Joint share holders and death • Notice shall not be given by ordinary post in case of evoting and postal ballot • If Meeting called on requisition then notice can not be given by ordinary post or by courier. (to be send by regd. post, speed post, email) • If company is having website Notice is required to be hosted on website till conclusion of meeting. • Hosting notice on website is also applicable to closely held private companies, unless AOA provides otherwise. Alter AOA to avoid hosting CS J J Gandhi PCS

16. Notice to specify serial number. Generally Notice of private companies do not have serial number. • Route map is compulsory even for private company if shareholders are other than Directors and relatives • No modification shall be made to any resolution which is put up for evoting. Therefore, title line before resolution that “with or without modification(s)” are not required. • Note of proxy required to be prominently displayed. Therefore, Proxy note should be either in bold letter, or underline or in capital letter • In case of re-appointment of Independent Director explanatory statement to include performance evaluation report CS J J Gandhi PCS

17. Place of holding AGM/ EOGM • AGM of an unlisted company may be held at any place in India, if consent is given in writing or electronic mode by All the members in advance. Sec. 96(2) • EOGM of the company (other than WOS of a company incorporated outside India) shall be held in India Sec. 100(1) • Only WOS of a body corporate can hold its EOGM outside India, but it has to hold its AGM in India only CS J J Gandhi PCS

18. AGM at Shorter Notice • AGM may be called at shorter notice if consent in writing or by electronic mode is accorded by 95% or more members entitled to vote at the meeting. Sec. 101(1) • However, proviso of Sec. 136(1) provides that for sending Financial statement etc. with shorter notice two conditions are to be satisfied. • Majority in number of members entitled to vote (say 50.01%) and • Who represent 95% or more voting powers at the meeting. CS J J Gandhi PCS

19. EOGM at Shorter Notice • EOGM may be called at shorter notice if consent in writing or by electronic mode is accorded by (two conditions) Sec. 101(1) • Majority in number of members entitled to vote (say 50.01%) and • Who represent 95% or more voting powers at the meeting. • Proviso is inserted that members shall be considered only in respect of resolution where they are entitled to vote and not in respect of other resolutions. Sec. 101(1) • Proxy provisions to be complied with, in case all members have not consented and meeting called within 48 hours CS J J Gandhi PCS

20. Quorum at AGM/ EOGM • One person can become authorized representative of more than one body corporate and in that case he is treated as more than one member present in person for quorum. However, minimum two members are required to form valid quorum • Related member not entitled to vote but present in person shall be counted for quorum • Quorum requirement does not apply when business is transacted through postal ballot CS J J Gandhi PCS

21. Minutes • Resolutions passed on adjourned meeting deemed to have been passed on adjourned meeting and not on any earlier date. • If there is CS minutes are in his custody. If no CS Board Resolution is required for giving custody of minutes to one of the Director. Therefore, include such resolution in a company where there is no CS. eg. Small company • Minutes required to be preserved permanently, including minutes of transferor company which is dissolved in case of Merger but the minutes have been handed over to transferee company CS J J Gandhi PCS

22. Auditors or their authorized representative to remain present at the AGM. This also applies to closely held private company and most of such companies hold their AGM on 30th Sept. Therefore, care is required to show presence of Auditors in minutes, who is also auditor of many other companies. • Proxy to be accepted even on holiday, if the last date by which it could be accepted is a holiday. Therefore, if the AGM/ EOGM is on Tuesday, take care to accept Proxy on Sunday. • Proxy inspection is allowed between 9.00 AM to 6.00 PM (24 hours before the meeting till the conclusion of meeting) CS J J Gandhi PCS

23. Thank You J J Gandhi Practicing Company Secretary & Insolvency Professional F-46, India Bulls Mega mall, Besides Dinesh mill, Jetalpur, Vadodara - 390007 Email : jjgandhics@gmail.com, Mob. 9374620085