Corporate Secretarial Practice-Drafting of Notices, Resolutions, Minutes and Reports – CA Final Law Study Material is designed strictly as per the latest syllabus and exam pattern.
Corporate Secretarial Practice-Drafting of Notices, Resolutions, Minutes and Reports – CA Final Law Study Material
Question 1.
Elaborate the provisions of the Companies Act, 2013 regarding Notice of Board Meeting. Draft a notice for the first meeting of the Board of Directors of India Timber Ltd. [Nov. 15 (8 Marks)]
Answer:
Provisions related to Notice of Board Meetings:
Sec. 173(3) of Companies Act, 2013 provides the provisions related to notice of board meetings. Accordingly,
A meeting of the Board shall be called by giving not less than 7 days’ notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means.
A meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting.
In case of absence of independent directors from such a meeting of the Board, decisions taken at such a meeting shall be circulated to all the directors and shall be final only on ratification thereof by at least one independent director, if any.
The Companies (Meetings of Board and its Powers) Rules, 2014, provides that the notice of the meeting shall inform the directors regarding the option available to them to participate through video conferencing mode or other audio-visual means, and shall provide all the necessary information to enable the directors to participate through video conferencing mode or other audio-visual means.
On receiving such a notice, a director intending to participate through video conferencing or audio-visual means shall communicate his intention to the Chairperson or the company secretary of the company. He shall give prior intimation to the effect sufficiently in advance so that the company is able to make suitable arrangements in this behalf.
If the director does not give any intimation of his intention to participate that he wants to participate through the electronic mode, it shall be assumed that the director shall attend the meeting in person.
Draft Notice of First Board Meeting:
Notice of the Board Meeting
India Timber Ltd.
(Regd. Office)
To,
(Director)
Dear Sir/Madam,
This is to inform you that a meeting of the Board of directors will be held at the Registered Office of the company on ___ at ____.
You are requested to make it convenient to attend the meeting. An option is also available to you to participate in the Board Meeting through video conferencing or audio-visual means. Kindly communicate your preference in this regard.
A copy of the agenda of the businesses which are likely to be transacted at the meeting is enclosed for your perusal.
Yours faithfully,
For ABC Ltd.
Secretary
Encl: A copy of agenda of the meeting.
Question 2.
Draft a resolution proposed to be passed at a General Meeting of a Public Company giving consent to the Board of Directors for borrowing upto a specified amount in excess of the limits laid down under Section 180(1)(c) of the Companies Act, 2013.
Answer:
Draft resolution:
“RESOLVED that pursuant to Section 180(1)(c) and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), the consent of the Company be and is hereby accorded to the Board of Directors to borrow moneys in excess of the aggregate of the paid up share capital and free reserves of the Company, provided that the total amount borrowed and outstanding at any point of time, apart from temporary loans obtained/to be obtained from the Company’s Bankers in the ordinary course of business, shall not be in excess of ₹___ Crores (₹ ____ crores) over and above the aggregate of the paid up share capital and free reserves of the Company.”
Question 3.
The Board of Directors of XYZ Limited decided to pass a resolution to purchase 35,000 equity shares of ₹ 100 each of PQR Limited at a meeting. Draft a specimen Board Resolution to be passed at the said meeting.
Answer:
Draft Board Resolution for Investments:
“Resolved unanimously that pursuant to provisions of Section 186(2) of the Companies Act, 2013, the company be and is hereby authorized to purchase 35,000 equity shares of ₹ 100 each of PQR Limited, the investment in addition to other investments made to date in the aggregate being within the limits prescribed under the said section.”
“Resolved further that Mr………….., a Director of the company, be and is hereby authorised to sign/execute the necessary documents in this connection.”
Question 4.
The members of XYZ Limited decided to pass a resolution for appointing Mr. Smith as an Independent director of the company. Draft a specimen resolution to be passed at the said meeting. [MTP-Oct. 20]
Answer:
Draft Resolution for Appointment of Independent Director:
“RESOLVED that pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013, Mr.—–(holding DIN—–), Director of the Company who retires by rotation at the Annual General Meeting and in respect of whom the Company has received a notice in writing from a member proposing his candidature for the office of Director, be and is hereby appointed as an Independent Director of the Company to hold office for five consecutive years for a term up to ____, 20____.”
Question 5.
Morbani Woods Limited decide to appoint Mr. Wahid as its Managing Director for a period of 5 years with effect from 1st May, 2021. Mr. Wahid fulfils all the conditions as specified under Schedule V to the Companies Act, 2013.
The terms of appointment are as under:
(i) Salary ₹ 1 lakh per month;
(ii) Commission, as may be decided by the Board of Directors of the company;
(iii) Perquisites;
- Free Housing,
- Medical reimbursement upto ₹ 10,000 per month, Leave Travel concession for the family,
- Club membership fee,
- Personal Accident Insurance ₹ 10 lakh,
- Gratuity, and Provident Fund as per Company’s policy.
You being the Secretary of the said Company, are required to draft a resolution to give effect to the above, assuming that Mr. Wahid is already the Managing Director in a public limited company.
Answer:
Resolution passed at the meeting of board of directors of Morbani Woods Limited held at its registered office situated at ……… on …….. (day) at ……. A.M.
“Resolved that consent of all the directors present at the meeting be and is hereby accorded to the appointment of Mr. Wahid, who is already the Managing Director of another public limited company, and fulfils the conditions as specified in Schedule V of the Companies Act, 2013, as the Managing Director of the company for a period of 5 years effective from 1st May, 2021 subject to approval by a resolution of shareholders in a general meeting and that Mr. Wahid may be paid remuneration as follows:
1. Salary of ₹ 1 Lakh per month
2. Commission
3. Perquisites: Free Housing, Medical reimbursement upto ₹ 10,000, Leave Travel Concession for the family, Club membership fee, Personal Accident Insurance of ₹ 10 Lakhs, Gratuity, Provident Fund etc.
Resolved further that in the event of loss or inadequacy of profits, the salary payable to him shall be subject to the limits specified in Schedule V.
Resolved further that the Secretary of the company be and is hereby authorize to prepare and file with the Registrar of Companies necessary forms and returns in respect of the above appointment.”
Sd/
Board of Directors, Morbani Woods Limited
[Note: Since in the given case Mr. Wahid fulfils all the conditions for appointment of Managing Director as specified in Schedule V, approval of Central Government is not required]
Question 6.
Mr. N is appointed as an additional Director by the Board of Directors of MNR Company Limited at its meeting held on 1st May, 2020 for a period as permitted by law. Articles of Association has conferred the power to appoint the additional director on the Board of Directors of MNR Company Limited. Draft a resolution and state the body which appoints N. [Nov. 14 (3 Marks), RTP-May 18]
Answer:
Appointment of Additional Director: Resolution (Section 161 of the Companies Act, 2013)
According to section 161(1) of the Companies Act, 2013, the articles of a company may confer on its Board of Directors the power to appoint any person’ as an additional director at any time.
Board Resolution
“Resolved that pursuant to the Articles of Association of the company and section 161(1) of the Companies Act, 2013, Mr. N is appointed as an Additional Director of the MNR Company Limited with effect from 1st May, 2020 to hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier.
Resolved further that Mr. N will enjoy the same powers and rights as other directors.
Resolved further that Mr. ____ Secretary of MNR Company Limited be and is hereby authorised
to electronically file necessary returns with the Registrar of Companies and to do all other necessary things required under the Act.”
Question 7.
The Board of Directors of RPS Limited decides to pass a resolution by circulation for allotment of 1,000 equity shares to Mr. A. Draft a specimen Board Resolution to be passed by circulation for this purpose. [May 15 (4 Marks)]
Answer:
RPS Limited
____ (Place)
To
Mr. X (Director)
(Address in India only)
Dear Sir,
The following resolution which is intended to be passed as a resolution by circulation as provided in Section 175 of the Companies Act, 2013 is circulated herewith as per the provisions of the said section. If only you are Not Interested in the resolution, you may please indicate by appending your signature in the space provided beneath the resolution appearing herein below as a separate perforated slip, if you are in favour or against the said resolution. The perforated slip may please be returned if and when signed within seven days of this letter. However, it need not be returned if you are interested in the resolution.
Yours faithfully,
(Secretary)
RPS Limited
Resolution:
Resolution by circulation passed by directors as per circulation effected …….. 20 ………..
Resolved that 1.000 equitvshares in thecompanvbeand herebv allotted to Mr. A. _____ from whom full amount has been received.
It is further resolved that necessary return of allotment be filed in the office of the ROC under the signature of Mr. Y, a Director.
For/Against
Signature
Question 8.
R Ltd. wants to constitute an Audit Committee. Draft a board resolution covering the following matters [compliance with Companies Act, 2013 to be ensured].
(1) Member of the Audit Committee “
(2) Chairman of the Audit Committee
(3) Any 2 functions of the said Committee. [May 16 (4 Marks)]
Answer:
Audit Committee – Board’s Resolution:
“Resolved that pursuant to Section 177 of the Companies Act, 2013 an Audit Committee consisting of the following Directors be and is hereby constituted.
- Mr. —- Independent Director
- Mr. —– Independent Director
- Mr. —– Independent Director
- Mr. —– Independent Director
- Mr. —– Managing Director.
- Mr. —– Chief Financial Officer”
“Further resolved that the Chairman of the Audit Committee’ shall be elected by its members from amongst themselves and shall be an independent director”.
“Further resolved that the quorum for a meeting of the Audit committee shall be three directors (other than the Managing Director), out of which at least two must be independent directors”.
“Resolved further that the Audit Committee shall perform all the functions as laid down in section 177(4) of the Companies Act, 2013 including but not limited to:
(a) make the recommendation for appointment, remuneration and terms of appointment of the auditors of the company;
(b) review and monitor the independence and performance of auditors of the company and the effectiveness of the audit process”.
“Further resolved that the Audit Committee shall review the quarterly and annual financial statements and submit the same to the Board with its recommendations if any”.
Question 9.
Mr. Shukla is working as General Manager (Finance and Accounts) in Target Limited. The Board of directors of the said company propose to entrust him with the duty of ensuring compliance with the provisions of the Companies Act, 2013 so that the books of account, balance sheet statement of profit and loss and the cash flow statemcnts can be prepared and maintained in accordance with law.
Draft a Board Resolution for the said purpose. [Nov. 17 (4 Marks), RTP-May 18]
Answer:
Resolution passed at the meeting of board of directors of Target Limited held at its registered office situated at ……… on …….. (date) at …….. (Time).
“Resolved that pursuant to sections 128(6) and 129 of the Companies Act, 2013, Mr. Shukla, who is already the General Manager (Finance and Accounts) of the company, be and is hereby entrusted with additional duties of ensuring compliance with the provisions of the Companies Act, 2013 so that the books of account, balance sheet, statement of profit and loss and the cash flow statements are maintained in accordance with the provisions of law.”
“Further Resolved that the said Mr. Shukla be and is hereby entrusted with the authority to do such acts things or deeds as may be necessary or expedient for the purpose of discharging his above referred duties.”
Question 10.
Board of Directors of the ABC Ltd., a listed company, in their meeting passed the resolution for an appointment of Company Secretary and the Compliance Officer for the guidance to the Board with regards to their duties, responsibilities and powers and the conduct of the affairs of the company. Draft the Resolution for an appointment of Mr. Nirman as Company Secretary and Compliance Officer of the company. [RTP-May 19]
Answer:
Resolution to consider the appointment of Mr. Nirman as Company Secretary and Compliance Officer of ABC Ltd.:
“RESOLVED THAT pursuant to the provisions of section 203 of the Companies Act, 2013 read with Rule 8 of the Companies [Appointment and Remuneration of Managerial Personnel] Rules, 2014, approval of the Board be and is hereby given to appoint Mr. Nirman as Whole Time Company Secretary of ABC listed company, with effect from 11th January 2019, to perform the duties which shall be performed by a Company Secretary under the Companies Act, 2013 and other duties as assigned to him by the Board from time to time.
“RESOLVED FURTHER that Mr. Nirman be and is hereby appointed as Compliance Officer of the company as per the Regulation 6 of the SEBI (LODR) Regulations, 2015 with effect from 11th January 2019.
Question 11.
Answer the following: Board of Directors of DBM Limited held a board meeting on 2nd May, 2021 at its registered office. You are required to state the salient points to be taken into account while drafting the minutes of the said board meeting.
Draft a board resolution for appointment of Mr. Paulas the managing director for 5 years with effect from 1st June, 2021 of DBM Limited passed in the above stated board meeting.
Answer:
Considerations while drafting Minutes:
- The minutes may be drafted in a tabular form or they may be drafted in the form of a series of paragraphs, numbered consecutively and with relevant headings.
- The place, date and time of the meeting should be stated.
- The Chairman of the meeting must be mentioned. The general phrase used in the Minutes is “Mr.—-, Chairman of the meeting took the chair and called the meeting to order”.
- The minutes should clearly mention the attendance and the constitution of the meeting, i.e., persons present and the capacity in which present, e.g. name of the person chairing the meeting, names of the directors and secretary, identifying them as director or
- Secretary, names of persons in attendance like auditor, internal auditor etc. The minutes should also contain the subject of leave of absence granted, if any, to any of the Board members.
- The adoption of the Minutes of the previous Board Meeting must be the first item on the Agenda by the directors giving their approval and the Chairman signing the Minutes as proof of approval of the Minutes.
- Conduct of the business at the meeting should be recorded in the chronological sequence as per the Agenda.
- In respect of each item of business the names of the directors dissenting or not concurring with any resolution passed at the board meeting should be mentioned.
- Reference about interested directors abstaining from voting is also required to be stated in the minutes.
- Chairman’s signature and date of verification of minutes as correct.
Draft Board Resolutions for appointment of Managing Director:
“RESOLVED that subject to the approval by the shareholders in a general meeting and pursuant to the provisions of the applicable provisions of the Companies Act, 2013, Mr. Paul be and is hereby appointed as the Managing Director of the Company with effect from 1st June, 2021 for a period of five years on a remuneration approved by the Remuneration Committee as enumerated below:
(1) Salary: ₹ …………. per month
(2) Perquisites, Benefits and Facilities ……….
RESOLVED FURTHER that Mr. Paul, so long as he functions as the Managing Director of the Company shall not be entitled to any sitting fee for attending the meeting of the board of directors or any committee thereof and that he shall not be liable to retire by rotation.
RESOLVED FURTHER that the Secretary of the company be and is hereby directed and authorized to file necessary returns with the Registrar of Companies and to do all other necessary things required under the provisions of the Companies Act, 2013.”
Question 12.
(i) 17th Board meeting of Jai Entertainment Ltd. was held at its registered office situated at B-17, Industrial Area, Suncity. While discussing the matter of appointment of Mr. Kaabil as Managing Director of the company, certain defamatory remarks were made by Mr. X, one of the directors. The draft minutes submitted by the Company Secretary also incorporated the indecent remarks of Mr. X. The chairman wants to remove those undesirable remarks from the minutes. Can he do so?
(ii) Draft the minutes of Board meeting containing the matter regarding appointment of Managing Director in addition to the usual items. [May 17 (8 Marks)}
Answer:
(a) Exemptions from inclusion in minutes of the meeting:
Section 118 of the Companies Act, 2013, deals with Minutes of Proceedings of General Meeting, Meetings of Board of Directors and Other Meetings and Resolutions Passed by Postal Ballot. The section provides certain exemptions to matters from inclusion in the minutes. Accordingly, there shall not be included in the minutes, any matter which, in the opinion of the Chairman of the meeting,
(a) is or could reasonably be regarded as defamatory of any person; or
(b) is irrelevant or immaterial to the proceedings; or
(c) is detrimental to the interests of the company.
The Chairman shall exercise absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds as specified above.
Conclusion: The Chairman can exercise his discretion of not including the undesirable remarks from the minute of the 17th Board meeting of Jai Entertainment Ltd.
(b) Draft Minutes:
Minutes of ___ meeting of the Board of Directors of ____ (Name of company) held on ____ the ___ 2021, at ____
Present:
1. ____ Chairman
2. ____ Director
3. ____ Director
In attendance Secretary
Item No. 1: Leave of Absence was grant to ___ Director.
Leave of absence was granted to ____ Director.
Item No. 2: Confirmation of minutes of the Board meeting:
The minutes of the ____ meeting of the Board of Directors held on ____ were considered and confirmed.
Item No. 3: Appointment of Managing Director:
The Board noted the appointment of Mr. XY, director of the company as the Managing Director of the company. In this connection, the following resolutions were passed:
“Resolved that Mr. XY who fulfils the conditions specified in Parts 1 and II of Schedule V to the Companies Act, 2013, be and is here by appointed as the Managing Director of the company for a period of five years effective from ____ and that he may be paid remuneration by way of salary, commission and perquisites in accordance with Part II of Schedule V to the Act.
Resolved further that the Secretary of the company be and is hereby directed to file the necessary returns with the Registrar of Companies and to do all acts and things as may be necessary in this connection.”
Item No. 4: Next Board Meeting:
The next meeting of the Board will be held on ____ the ____ 20____ at the registered office of the company. The meeting ended with a vote of thanks to the chair.