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Board meeting agenda

Shridhi Jain (Company Secretary) (1678 Points)

07 January 2011

Dear frnds,

Pls tell me wat are the items to be included in last board meeting of the financial year of a pvt. ltd. co.? Like declaration u/s 299, etc. , wat are the other items?

Thanks in adv.

Shridhi Jain

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14 Replies

HARDIK (COMPANY SECRETARY NCFM (Corporate Governance )) (664 Points)
Replied 07 January 2011

dividend consideration if any, quarterly result, any special business.

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Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 07 January 2011

In addition to taking note of General Notice of Interest given by directors u/s. 299, Declaration from directors u/s.274(1)(g) may also be recorded. Auditors generally insist for this.

Chirag (CA) (33 Points)
Replied 07 January 2011

Shridhi, Being a CS, rather you should be able to guide on this

Shridhi Jain (Company Secretary) (1678 Points)
Replied 07 January 2011

yes Chirag u r right......

Bt first let me knw the answer only then i can guide others in future.

Gaining expertise is a life long process and not a particular stage or particular qualification.

nidhigoel89 (Company Secretary ) (594 Points)
Replied 07 January 2011

Gaining expertise is a life long process and not a particular stage or particular qualification.

Agree

Nidhi

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Jaideep (Service) (1368 Points)
Replied 07 January 2011

In addition to Jayshree Mam comments:

I would like to add:

To peruse the Register of Contracts in which Directors, etc. are interested.

To take note on the Statutory Compliances for the quarter ended,if any.

Regards

Jaideep Pandya

(Guest)

directors report

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 08 January 2011

Directors report cannot be finalised by 31st March. It's only after the accounts for the financial year ending 31st March are closed and the profitability of the company is ascertained and the dividend percentages are decided, the Directors Report can be prepared, incorporating directors comment on performance, profitability of the company,etc.

Again, as regards statutory compliances it's better to keep it off from the Board Meeting as it may invite trouble for the Board if any default persists.

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Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 08 January 2011

Originally posted by : Chirag
	Shridhi, Being a CS, rather you should be able to guide on this

Whenever I see such remarks, I recall my initial years of CS.

Dear friends, it's easy to pass such remarks but let me tell you, the intial years of CS is a real testing period. Irrespective of whether you are a fresher or a senior, CS are required to report to Top Management where the expectations are too high and again they need solutions and not expect you to quote the Company Law Provisions. It's where the challenge of the CS begins. One may know the provisions thoroughly but its application in the given situation may be difficult and hence need to the advice of a senior professional or a Forum like this.

Freshers in other fields are fortunate as they will be reporting to a lower or middle level management where they get guidance from immediate superior. But in our case, you have to fight it alone and come out with solutions.

I even received personal mails from Forum members advising not to provide readymade solutions by providing resolutions format. My Dear Friends, most of the querries in this Forum are from articles assistants or junior CS , so let's help them. It's definitely not providing readymade solutions as I am very sure the same person after a reasonable amount of exposure would not approach this Forum seeking such help, but would definitely assist his juniors in future.

Again I come accross many queries being commented "very silly or basic". Friends, the queries are before you because the querist doesn't know the solution and it's for you to sort out the problem rather than posing such remarks. It really hurts the feelings of the querist. May be the querist is not aware of the provisions and want to know. May be he is not exposed to this area till now. And again the whether it's silly or not despends on the level of exposure. For a Senior colleague in the Forum like Ankur Garg, Sanjay Gupta, B. Chakrapani Warior, Sanat Pyne, etc. even my queries may look basic. For me, may be your queries look silly. But I have never seen such harsh remarks from our senior profssionals.

So friends let's us use this FORUM for knowledge sharing and gaining. For freshers my advise is, use this forum for learning and keep updating your knowledge.

These are my personal views, out of my own personal experiences. If I have hurt anyone's feeling I am really sorry.

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Bhav Bhuti Sharma (Towards Professionalism ) (823 Points)
Replied 08 January 2011

Under the provisions of S. 299, every director of a company, whether directly or indirectly, who is concerned or interested in a contract or arrangement entered or to be entered, is required to disclose the nature of his concern or interest at the meeting of Board of Directors.

A general notice given to the board u/s.299(3) to the effect that he is a director or member of a specified body corporate or is a member of a specified firm and is to be regarded as concerned or interested in any contract or arrangement which after the date of notice, be entered into with the body corporate or firm, shall be deemed to be a sufficient disclosure.

Further in terms of Ss.(6), the Section is not applicable to any contracts or arrangements, if any of the directors of one company or two or more of them together holds or hold not more than 2% of the paid up share capital in another company. Therefore, by practice, a general notice is given by the director every year giving the directorships held and a declaration that the director does not hold more than 0.1% shareholding in any company.

The declaration about share-holding is given only to assume that if all the directors’ share-holding is considered together, it will not exceed 2% even if maximum no. of directors are considered at 20.

Now because of the provisions of Ss.(6), the question arises, if combined shareholding of directors in contracting companies does not exceed 2%, then, whether a director is to be considered as concerned or interested merely because he is a director in the other company ?

Provisions of S. 299(3) imply to define interest or concern of the director either by way of directorship or by way of membership. However, Ss.(6) implies that if the directorship is not backed by more than 2% combined holding, then the whole section is inapplicable.

Directorships of directors in other companies are irrelevant. What is relevant is the membership or shareholding of directors in the other company. However, disclosure in the form of general notice of directorships is given only to comply with S. 299(3).

A declaration of % of share-holding is a must in order to conclude u/s.299(6) whether S. 299 is applicable or not. U/s.299 (6) one can come to a conclusion that none of the provisions of Section applies if the combined shareholding of the directors is < 2% only from the assessment of disclosure given in form of general notice ofextent of his shareholding.

Thus, all contracts and arrangements between companies with common directorships are out of the clutches of S. 299, if directors together of one company do not hold more than 2% of the paid-up share capital in the other company.

U/s.301(3) all parties disclosed in general notice u/s.299(3) should be listed in the register u/s.301 of Companies Act, 1956. In case S. 299 becomes inapplicable on account of S. 299(6), as explained above, then the contracts or arrangements are not to be noted in the register u/s.301. S. 301 applies only to transactions, contracts and arrangements to which S. 297 and S. 299 are applicable.

Reporting requirements under

CARO, clause 4(iii) and 4(v) :

Under clause 4(iii), an auditor is required to report — "has the company either granted or taken any loan, secured or unsecured to/from companies, firms or other parties covered in the register maintained u/s.301 of the Act. If so, give the number of parties and amount involved in the transaction."

Thus, any loan given or granted to the parties listed in the register u/s.301(3) on the basis of general notice given u/s.299(3) will have to be reported, even though the loan transaction is not entered in the register u/s.301. A loan transaction will not be entered in the register u/s.301 if by virtue of S. 299(6), the transaction is out of the scope of S. 299. The loan transaction being not specifically covered u/s.297 will not be consequently covered u/s.301 through S. 297. S. 297 relates to contracts for sale, purchase, service or underwriting of subscripttion of any shares or debentures of the company.

Under clause 4(v) the auditor is required to report "Whether transactions that need to be entered into a register in pursuance of S. 301 of the act have been so entered."

As mentioned earlier, transactions covered u/s.297 and S. 299 are required to be entered in the register u/s.301.

In case loan transactions or other contracts/arrangements are out of the scope of S. 299 by virtue of Ss.(6) of S. 299, then there will be a case where parties listed in general notice u/s.299(3) are listed in terms of S. 301(3), whereas loans given to or taken from such parties, are not entered in the register u/s.301 as S. 299 is not applicable.

In such cases, the question is whether the auditor will be required to report loan transactions even when they are not registered u/s.301 ?

Under clause 4(iii), one has to report whether a company has granted or taken any loan from companies, firms or other parties covered in the register maintained u/s.301. If the use of the word ‘covered’ is interpreted to mean, ‘listed’, then all loans given or taken to parties listed u/s.301(3) will be required to be reported, even if such loan transactions are not registered u/s.301.

In such a case, a statement giving the number of parties involved and the amount of transactions will have to be obtained.

If the auditor takes a stand that loan transactions entered with parties listed u/s.301(3) on the basis of general notice given u/s.299(3), but not registered u/s.301 because the transactions fall out of the scope of S. 299 on account of S. 299(6), will not be required to be reported, then the auditor may report that :

"There are loans granted or taken from parties listed u/s.301(3), however, such loan transactions are not entered in the register u/s.301 as provisions of neither S. 297 nor 299 are applicable to such transactions and, therefore, the number of parties involved and the amount of such transactions are not reported."

In the absence of any clear observation, comment or guidelines in the statement on CARO, it is conservative to report on all loans given to or taken from parties covered u/s.301, irrespective of the fact whether loan transactions are entered in the register u/s.301 or not.

BHAV SHARMA

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Shridhi Jain (Company Secretary) (1678 Points)
Replied 08 January 2011

Very well said by Jayashree ma'am....

Thanks ma'am for keeping the point of view of many of the freshers and trainees.

I have jst cleared my CS and its been a month that i m in job. Its a much responsible post therefore I will be needing help of experts like you.

Parashar (Company Secretary 2004) (1013 Points)
Replied 08 January 2011

Very true Jayashree

nupura (CA) (140 Points)
Replied 08 January 2011

Yes Jayashree Mam...its true....!!!! during initial days every1 has to face this situation though having professional qualification....but if every1 vl find encouraging seniors like u, it vl b a gr8 advantage...!!!!

Sharad Suman Das (art) (141 Points)
Replied 08 January 2011

Totally Agreed with Jayshree mam

Mr. Chirag if you konw the answer then please give the answers only, Dont give such a comment as this forum is for solving the problems of each other not for critising any one, so you must keep this in your mind, critising any one is easier than solving problem.