The document discusses secretarial standards in India and their importance for corporate governance. Secretarial Standards were introduced by the Institute of Company Secretaries of India to standardize and harmonize diverse secretarial practices and improve compliance. Adopting these standards leads to more transparency, higher investor confidence, and increased recognition for complying companies. The standards cover areas like board meetings, shareholder meetings, maintaining registers and records, and other secretarial functions.

1. Neha Singhi Practicing Company Secretary Add: D2/1, Block EP, Sector V, Salt Lake City, Kolkata-700091 Ph- 9133 40083385/9831402256 Email: neha@nehasinghi.com Setting the grounds for Corporate Governance

2. This Presentation is the property of Neha Singhi and no part of it can be copied, reproduced or distributed in any manner.

3. Topic Page Introduction 4 Objective 5 Impact of SS 6 SS & Corporate Governance 7 Recognition for SS 8 Secretarial Standards in brief 9-23 Corporates inline with SS 24 Conclusion 25

4. Standardisation of Secretarial Practices Secretarial Standard Board formed with emminent members In consultation with various professional bodies, Chamber of Commerce, DCA, DEA, SEBI, RBI In conformity with existing laws Standards supplement the law, rules and regulations

5. To integrate, harmonise and standardise diverse secretarial practices Improve the compliance of corporate governance norms by India Inc Sustained growth and enhanced visibility of the profession and members Setting international benchmarks in secretarial practices Clarity in legal provisions-where law is ambiguous and silent

6. Standard secretarial practices in Corporate India Better understanding of existing laws More transparency, more compliance Rise in investors faith More recognition to the ICSI and members Increasing Professionalism in corporates Noncompliance will be easily & readily located Less frauds

7. INVESTOR IS KING SS are guiding in the most compliant manner for executing corporate secretarial functions Hence increasing compliance & unified practices Transparent corporate environment Stakeholders more aware and confident Better control by regulators Rise of standards of corporate India

8. Company Bill 2008 Recognition on cards

9. SS1 Meetings of the Board of Directors 13.12.2001 SS3 Dividend 22.05.2003 SS2 General Meeting 01.05.2002 SS4 Register and Records 20.10.2005 SS5 Minutes 20.09.2007 SS6 Transmission of Shares and Debentures 20.09.2007 SS7 Passing of Resolution by Circulation 06.11.2008 SS8 Affixing of Common Seal 06.11.2008 SS9 Forfeiture of Shares 06.11.2008 SECRETARIAL STANDARDS

10. Equally applicable to meetings of committee Individual Director-no power unless authorised 15 days notice for calling a Board meeting (shorter notice possible; majority) Notice when meetings are held on pre-determined dates or at pre-determined intervals Draft Resolution in notice-where approval is required Sec 287 Quorum should be present at every stage of the meeting

11. Story-A very substantive matter concerning the powers of the top two men in BOD, which required intensive discussion and consideration of the BOD was introduced through a supplementary agenda at the end of a board meeting, without proper and due notice. Vice chairman of the Company kept in dark. Is it Justified?? Substantive items or unpublished price sensitive information cannot be introduced as ‘any other item’ without enough notice

12. Illustrative list of items requiring prior notice in BM Calls on shareholders in respect of money unpaid on their shares. Issue of debentures/Borrowing money otherwise than by issue of debentures. Investing the funds of the company/Making loans. Filling casual vacancies in the office of Directors. Granting loans to Directors. Sanction for specified contracts in which one or more Directors are interested and to sign the Register of Contracts. Appointment or Resignation of Managing Director or Whole-time Director or Manager. Appointment and removal of the Chief Financial Officer and the Company Secretary. Making a declaration of solvency where it is proposed to wind up the company voluntarily. Annual operating plans and budgets. Material default in financial obligations.

13. Committee meeting: All members should be present Annual Report to disclose the number of meetings of the Board and Committees held during a year and meetings attended by each Director

14. General Meeting should be convened on the authority of the Board Notice also to Directors, Auditors, and PCS giving Compliance Certificate, Debenture Trustees Explanatory Statement for special business. Resolution for ordinary business when Appointment of Auditor by special resolution Appointment of Auditor or Director other than retiring Notice and documents to be sent 25 days in advance of meeting (shorter notice possible; 100AGM:95EGM) Listed company with more than 5,000 Members- an abridged version of the Notice should be published in a newspaper having a wide circulation within such States of India where more than 1,000 Members reside.

15. No other items which are not included in Agenda Quorum five & two; proxies to be excluded for the purpose of quorum Every Resolution should be proposed by a Member and seconded by another Member entitled to vote thereon. Resolutions for items of business which are likely to affect the market price of the securities of the company should not be withdrawn. No gifts, gift coupons, or cash in lieu of gifts

16. Minutes should mention the brief background of the proposal, summarise the deliberations and the rationale for taking the decisions. Within 30 days of the meeting Language: Third person; past tense Separate minutes book should be maintained for each type of meeting Kept at registered office Inclusions: Registers and documents were available for inspection Interested director did not participate in the discussion or vote Appointment of officers made by the Board Dissent and the name of the director who dissented or abstained from the decision. Minutes dated, signed and pages numbered

17. Articles should authorise Business that does not require detailed discussion or which are urgent decisions Authority: Chairman/Managing Director Resolution is deemed to have been passed on the date on which it is approved by the majority of the Directors Resolutions passed by circulation should be noted at the next meeting of the Board or Committee, as the case may be, and the decision recorded in the minutes of such meeting Validity: same as a resolution passes in a duly convened meeting

18. Signature of the company; Binds the company for all obligations undertaken in the document Only with the approval of the Board of directors of the company Only one common seal Affixed in the presence of managing director or any two directors, and the company secretary or any other person as the Board may authorize for the purpose Register Official seal is a facsimile of common seal; to be adopted by board resolution

19. On receipt of notice from nominee along with documents, register the name of the shares in 30 days Documents Death certificate; Request for transmission signed by the legal heir(s)/Legal Representatives/claimant(s) with their specimen signature(s); Succession Certificate or Letter of Administration or Probate of Will; Original share certificate(s); Orders of the Court or of competent authority, if applicable; Permission under the Foreign Exchange Management Act, 2000, if applicable.

20. Forfeit Nonpayment of any call Other ground as stated in Articles Forfeiture requires approval of Board Director’s Report should refer to the forfeiture details Listed companies: notice of forfeiture of shares and actual forfeiture should be intimated to the stock exchange; Board can annul the forfeiture by passing a resolution before the reissue of forfeited shares Shares forfeited-liability of the defaulting member does not cease Reissue of forfeited shares is TRANSFER and does not amount to allotment Listed Company: Reissue of shares as per guidelines of preferential issue and listing agreement

21. Interim Dividend should not be declared out of reserves Final Dividend recommended by Board; declared by members. Interim dividend declared by Board To be paid in cash within 30 days of declaration Duplicate dividend warrant to be issued after expiry of 3 months validity of original Call in arrears or any amount due to members may be adjusted with dividend (listed company-give notice) Annual Return to disclose: Unpaid Dividend Acc/ IEPF

22. Dividend amount till 30 days after declaration Investor who claims within 7 years Unpaid Dividend Account till 7 years Within 7 days Investor Education and Protection Fund* Within 30 days *Individual notice atleast 6 months before the due date of transfer to IEPF

23. Maintenance Authentication Inspection Preservation

24. Companies are voluntarily adopting SS Report the compliance in Annual Reports Reliance Industries Ltd Tata Metaliks Ltd Reliance Energy Ltd Ashok Leyland Ltd Kotak Mahindra Finance HDFC

25. Complying with good governance practices should not be regarded as a regulatory requirement but rather as an opportunity and value proposition for organisations competing in a de-regulated milieu. International markets and investors notice companies that upheld clean governance and this appreciation leads to higher valuation for such organisations A synergy between hardware (systems and structures) and software (values) in organisational culture of companies is possible if the top management, Board of Directors and executives “walk the talk” in value-based governance It is better to bring an irregularity into the open than get a shock along the road when it is least expected Courtesy: Ranjana Kumar, Vigilance Commissioner, Government of India