UNIT 6 COMPANY lMEETINGS - I

Structure
6.0 Objectives
6.'1 Introduction
6.2 Company Meetings
6.3 Kinds .of Company Meetings
6.3.1 Statutory Meeting
6.3.2 Annual General Meeting
6.3.3 Extra-ordinary General Meeting
6.3.4 Meetings of Directors
6.3.5 Other Meetings
6.4 Requisites of Company Meetings
6.4.1 Notice
6.4.2 Quorum
a 6.4.3 Agenda
6.4.4 Proxies
6.4.5 Appointment of Chairman
6.5 Motions and Resolutions
6.5.1 Ordinary Resolutions
li 6.5.2 Special Resolutions
6.5.3 Resolutions Requiring Special Notice
6.6 Methods and Procedures of Voting in Company Meetings

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6.7 Minutes of Company Meetings
6.8 Let Us Sum Up
6.9 Key Words
6.10 Answers to Check Your Progress
1 6.11 Terminal Questions

After studying this Unit, you should be able to:

explain the purpose and importance of company meetings
distinguish between different types of company meetings
state the requisites of company meetings
explain the different types of resolutions and the purposes for which they are passed
describe the methods and procedures of voting in meetings
explain the legal provisions regarding minutes of meetings.

6.1 INTRODUCTION
The business of a company, which is an artificial person created by law, is conducted by the
elected representatives of its shareholders,known as 'directors'. To conduct the affairs of
the company, directors rake decisions at the meeting of the Board of Directors. But they are
. not entitled to take decisions on all matters relating to the company. There are certain
matters on which decisions are to be taken by the general body of shareholders, who are the
own6rs of the company. Sometimes the creditors and debentureholders of the company may
also be required to express their opinion on certain matters for which meetings have to be
held. In this unit, you will be acquainted with different types of company meetings, the
business transacted therein, and the requisites thereof, with special reference to relevant
provisions of the Companies Act.

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6.2 COMPANY MEETINGS

A company meeting, like that of any otber association of persons, implies coming together
of two or more persons for transacting any lawful business. For the proper conduct of a
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Meetings company's business, it is oecessary that directm and shareholders respectively d o u l d m a

as often as necessary,and take decisions on relevant matters after full discussion. In s b m , a
company must hold meetings for its proper functioning, and meetings have great importance
in the decision-making process. The shareholders, who are the owners o; the company, must
have the opportunity to collectively discuss the affairs of the company and exercise their
rights as regards the ongoing activities and future of the company. Meetings provide that
opportunity and enable shareholders to conmol the Board of Directors. The directors are
duty bound to follow the decisions taken at the meetings of shareholders. The management
of the company is vested in them. So they must also meet regularly to take collective
decisions and functions as a team.

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6.3 KINDS OF COMPANY MEETINGS
Company meetings may be broadly divided into three types: i) Meetings of shareholders or
members, ii) Meetings of Directors and iii) Other meetings.

Meetings of Shareholders: These meetings, also known as general meeting of members,

are held periodically to enable shareholders to exercise their collective rights. Four types of
shareholders meeungs may be distinguished as follows: C

i) Statutory Meeting; il) Annual General Meeting; iii) Extraordinary General Meeting; and
iv) Class Meetings.

Meetings of Directors: These meetings are held as often as necessary for collective
decisions to be made by the directors. Two types of meetings may be held by directors: (a)
Meetings of the Board of Directors and (b) Meeungs of committees of Directors.

Other Meetings: Besides meetings of shareholders and meetmgs of directors, meeting of

debentureholders, creditors and contributories may be held to take decisions on matters of
interest to the respective groups. Three types of such meeungs are : (a) Meetings of
Debentureholders, (b) Meetings of Creditors and (c) Meetings of Creditors and
contributories on the wrnding up of a company.

Figure 6.1 will help you in understanding the various types of meetings.

Con~panyMeetings
1
4 . 1
Shareholders Directors Others
(Nwbers)

re
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General
1 +l
Board of Directors

1
Class
Committee of
Directors

Meetings Meetings
I

1 .
1
Annual
1
Extra-ordinary
Statutory
Meeting Meeting Meeting
v
4 4
De binture- Creditors Creditors and
holders' contributors A

Figure 6.1: Types of Meetings

6.3.1 Statutory Meeting

f
Statutory meeting is the first meeting of the Shareholders of a public company having a share
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capital and is held once in the lifetime of the company. As required under Section 165 of the
46 Companies Act, every company limited by &ares or limited by meeting of members called
 'Statutory Meeting' within a period of not less man one monm and not more than six months Company MeUngs-1
from the date on which the company become entitled to commence business.

Purpose of holding a statutory meeting: The main purpose of the statutory meeting is to
inform members about rhe company's financial position and prospects. The meeting
provides an opportunity to the members to discuss matters relating to the formation of the
company, to know about the public subscription to its share capital, and to get an idea about
tbe assets and properties acquired or to be acquired.

Notice of the meeting: The notice of the statutory meeting must be sent to all members of
the company at least 21 days before the date of meeting. The notice must specify that it is a
statutory meeting. There must be 21 days clear notice. In calculating 21 days, the date on
which it is served and the date of the meeting are to be excluded. A shorter notice will be
valid if consent is given by members holding at least 95 p.c. of the paid up capital carrying
voting rights, or representing at least 95 p.c. of the voting power. The content for the shorter
notice may be given either at the meeting or before the meeting. The notice usually refers to
the agenda briefly as "To consider and adopt the Statutory Report and any other matter that
may be considered at such meeting." Amore detailed agenda may also be given indicating
the order in which tke items are to be taken up.

Statutory report: The Board of Directors have to place before the member at this meeting a
report, known as 'Statutory Report, which should contain particulars regarding allotment of
shares, receipt and payments of cash, preliminary expenses, details of contracts submitted for
approval, underwriting agreements etc. At the meeting, members may raise questions
relating to all matters arising out of the report, as well as on matters not set out in the report
after proper notice has been given about the intention to raise additional matters. No
resolution can be passed at the meeting unless due notice has been given thereof.

A copy of the Statutory Report must be sent to every member of the company along with the
notice of the statutory meeting atleast 21 days before the day of the meeting. If the report is
forwarded later, it will still be treated as valid if all the members entitled to attend and vote
at the meeting agree to it. A certified copy of the report must also be filed with the Registrar
of Companies after tne same has been sent tothe members.

At the commencement of the statutory meeting, the Board of Directors are required to
produce a list of membvs showing their names, addresses aod occupations, and the number
of shares held by them. This list is to remain open for inspection of members during the
continuance of the meeting.
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I If there is default in holding the statutory meeting and submitting the statutory report in
accordance with law, every director and other officer in default shall be punishable with fine
I up to Rs. 500. Further, tbe members have right to file a petition to the court for compulsory
winding up of the company for such default. The court, on application of the Registrar, or a
contributory, may order the whding up of the company, or may direct that the meeting be
held.

Cbeck Your Progress A

1) Make a list of the different types of shareholders' meetings.

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2) What is a statutory meeting?
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3) Which of the following statements :Ire True and which are False?
i) A statutory meeting m.ust be held by all companies.
ii) The statutory meeting of a public company must be held within six months of the
date of incorporation.
iii) The notice of statutory meeting must he accompanied by a statutory report.
iv) The statutory report must be certified by not less than two directors including the
managing director if there is one.
v) The members present at a statutory meeting are free to discuss any matter relating
to the company.
vi) A copy of the statutory report inust be filed with the Registrar before copies thereof
are sent to the members.
vii) The auditors must certify the statutory report in respect of the shares allotted, cash
received on such shares and the receipts and payments of the company up to a date
within 7 days of the report.
viii) If default is inade in holding the statutory meeting, members have a right to file
petition to the court for compulsory winding up of tl~ecorrlpany.

6.3.2 Annual General Meeting

Every company, public or private, must hold an annual general meeting of shareholders
every calender year in addition to any other general meeting. This is a statutory
requirement. The purpose of the annaal general meeting is to enable members to discuss the
affairs of the company on the basis of the annual report of directors and audited accounts, a.
well as to exercise their rights and privileges of membership.

Provisions of the Companies Act: The Companies Act contains the following provisions
relating to Aiinual General Meeting.
i) The fust annual general meeting must be held within a period of not more than eighteen
months from the date of incorporation of the company. If the meeting is held within that
period, it shall not bc necessary for the company to hold any such meehng in the year of
incorporation and the next year. Thereafter (from 1993 onwards) an annual general
meeting must hc held every year and not more than 15 months must elapse between the
date of one annual general meeting and the next. Except in the caqe of the first annual
general meeting, the Registrar may, for any special reason, grant an extension of up to 3
months for holding the annual general meeting.
Suppose a company is incorporated on 15th October 1990 and holds its fust annual
general meeting on 10th March 1991 (i.e. within 18 months), it need not hold any annual
general meeting in 1991 and 1992.
ii) A notice specifying that it is annual general meeting and giving the date, time and place
of the mecling must he sent to every member at least 21 days before the date of the
meeting. At l a s t 21 clear days notice in writing is required to be given. It may be
called with a shorter notice if it is agreed to by all members entitled to vote at the
meeting.
iii) The mceting must be called on a working day during business hours either at the
registered office of the company or at some other place within the city or Lvwn in which
the registered office of the company is situated. If the Central Govenunent declares the
day to be a public holiday after issue of the notice, it shall not be deemed the day to be a
public holiday and the meeting could.be held on that day as scheduled.
iv) The notice of the annual general meeting must be accompanied by a copy of audited
balance sheet and profit and loss account for the previous financial year and also the
Annual Report of Directors.

Business Transacted at the Meeting: The business to be transacted at the annual general
meeting may include ordinary business and any other business termed 'special business.'
The ordinary business generally transacted in every annual general meeting are;
 I) consideratjon of the annual accounts, balance sheet and reports of the Board of D~rectors
and auditors;
ii! declaration of dividend;
~ i i appolnment
) of directors in place ol' lhose retiring; and
IV) al?pocnment ot the autlitors and I'lxir~ytheir remuneration

Special business can bc transacted at the meeting provided h e articles of assoclatior~do not
prohibit kt and the notice mentions it as special business. While an ordinary husiness
requires an ordinary resolution, for a special business either an ordinary business or a specid
resolution may have to be passed a$required by the Companies Act. These resolutions arc
discussed in Section 6.5 of this Unit.

Consequences of Default in Holding Annual General Meeting: Since the holding of

annual genernl meeting is a statutory requirement, if there is default in holding it as per Sec.
166 of Ule Company Act, the consequences will be as foliows:
i) The Central Government may, on the application of any member, call the meeting or
direct the company to call the meeting. The Central Government rnay also give any
ofher direction as it thinks tit, which may even include a direction that ont; person
present. in person or proxy shall constitute the annud general meeting.
ii) On the failure of the company to hold thc annual general meetiilg or to comply with the
directions given by the Central Government, then the company and every officer of thc
company in defaul! shall be punishable with fine up to Rs. 5.1100 and if the default
continues, with a further daily fine of upto Rs. 250 for the period that the default
continues.

A specimen of Notice for annual general meeting is given in Appndix 6.1

6.3.3 Extra-ordinary General Meeting

All general meetings of a company other than the statutory and annual general meeting are
called 'extraordinary meeting'. Extraordinary general meeting is a meeting which is held
between two annual general meetings. These meetings are called in emergencies or on
! special occasions. Such a meeting is called to discuss some urgent special busii~esswhich
cannot be postponed till the next annual general meeting, for example, alteration in the
memorandum or articles of association, reduction of capital, issue of debentures etc. All
business transacted at such meeting is deemed to be special business.

An extraordinary general meeting may be called by

i) Board of directors on its own motion;
ii) the Board of Directors on the requisition of members; or
iii) the requisitionists themselves; or
iv) the C:ompany Law Board.

By the Board of Directors: Clause 48 of the Table A of the Model Articles of Association
states that."the Board may, whenever it thinks fit, call an extraordinary general meeting".
however, the Board has to pass a resolution for convening any such meeting.

By the Board on requisition: According to Section 169 of the Act, the Board of directors
must call an extraordinary general meeting of the company on the requisition of members.
The requisition letter for calling this meeting must be signed by inembers holding at least
one-tenth of the paid-up capital and having a right to vote on the matter of requisition. In the
case of a company having no share capital, it must be signed by those members who have at
least one-tenth of the total voting power.

The requisition must state the purpose for which the meeting is requisitioned and it must be
deposited at the registered office of the company. Only such matter can be taken up at the
meeting whjch is specified in the requisition.
Meetings On receipt of a valid requisition, the Board of directors should, within 21 days, move to c -
a meeting and the meeting must actually be held within 45 days of the date of the deposit of
the requisition. A notice of 21 clear days is necessary for calling the extraordinary general
meeting. A duty has been imposed on the management to disclose in an explanatory
statement all material facts relating to every special business to enable the members to fonn
a judgement on the business.

By the requisitionists: If the Board of directors fails to call the meeting within 21 days and
the meeting is not held within 45 days of the deposit of the requisition, the requisitionists
must hold the meeting within three months from the deposit of the requisition. Such meeting
must, as nearly as possible, be held in the manner as called by the Board of Directors. When
the requisitionisk themselves call a meeting, they may recover the reasonable expenses
incurred from the company, and the company may deduct such amount from the amount of
remuneration payable to the directors in default.

If the meeting is called by requisitionisrs, it can only transact the special business for which
it has been expressly convened. The resolutions, which are properly passed at such
requisitioned meeting, shall be binding upon the company.

By the Company Law Board: Under Section 186, the Company Law Board is empowered
to call, hold or conduct such a meeting, if for any reason it is impracticable to call or conduct
an extraordinary general meeting. The term 'impracticable' means not possible to call, hold
or conduct the meeting in accordance with the provisions of the Act and Articles, for
example, if the meeting cannot be called because of the rivalry of two groups. The
Company Law Board may order for the calling, holding x!jconducting such a meeting
either on its own motion or on the application of any director of the company or any
members of the company who would be entitled to vote at the meeting. The Company Law
Board should use this power sparingly xrd on king convinced that it is in the large interest
of the company. While calling a meeting, the Company Law Board may give such
directions as it thinks fit, including the direction, that one member present ifi person or by
proxy would constitute tlie quorum.

Like any other general meeting, the notice of the extraordinary general meeting must also be
given at least 21 days before date of the meeting specifying the date, time and place of the
meeting. The notice must also specify the special business to be transackd at the meeting.
A specimen of the notice is given in.Appendix 6.2.

You should note that unlike an annual general meeting, extraordinary general meeting may
be held on any day including a public holiday. The meeting may be held at a place other '
than the registered office of the company or even outside the city in which the registered
office is situated.

Check Your Progress

1) What is an annual general meeting?

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2) What is the purpose of holding annual general meeting?

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3) What is an extraordinary meeting?

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 4) Who can call, an extraordlnary general rncetlng /

5) What is the rninimum nurnher of mcrnbcrs who can requisition an extrr~ordinarygeneral

meeting'?

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6) Sutc whether the follow~ngstatements are True or False:

i) The time interval between two annual general meetings shall not exceed fifteen
months.
ii) The lirst annual general meeting must be held wilhin lifteen months from Ule kite
ol'ih incorporation. 1
iii) An imllual general meiiiig may be called by giving a potice shorter than 21 days
if all members entitled to vote give their consent.
iv ) Declaration of dividend is an item of ordinary business.

I I ) One hundred members of a company can requlsltlon an extraordinary meeting.

vi) In an extraordinary general meeting ofa company all business transacted is
deemed to hc special b~~siness.
vii) The requisitionists may themselves convene an extraordinary general meeting
within six months of depositing the requisition.
viii) An extraordloary general meeting can be called o n a public holiday and at a place
other than thc registered officeof the coxnpany.

6.3.4 Meetings of Directors

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The directors of a company are required to meet frequently to discuss and decide upon
policy matters, to take decisions on matters relating to the management of the company, and
to review its progress. All powers of management granted to the directors by Lhe Companies
Act an3 the Articles of the company can be exercised only by passing resolutions at duly
coilstituted meeting of directors, known as Board Meetings. The rules reg'arding the
hoIding and conduct of Board meetings are laid down in the Act and the Articles. The Act
also permits the Board to frame its own rules and regulations (known as Standing Orders)
for the conduct of Board meetings where the Act and the Articles are silent.

The Companies Act require that a Board meeting must be held at least once in every three
calender months, and at least four such meetings must be held every year. But Board
meetings can be held more frequently, if necessary. The Central Government may exempt a
company from the requirement of holding quarterly meetings of the Board if company does
not have sufhcient work to justify it.

5 Notice of every Board meeting must be given in writing to every director who 1s present in
India at his usual address. Failure to give notice will make officer responsible for giving
notice liable to fine. If the Articles provide for holdmg of Board meetings on fixed days of
each month or at regular intervals, notice of the meetings may not be sent. However, notice
is sent even in such caises as areminder.

There IS no provision in the Act regarding the time, day and place of Board meetings. Thus,
;I Bn;ud meeting can be held at any place, in or outside the registered office, within or
ollbide business hours and even on a public holiday, except in the case of an adjourned 51
meeting,
A copy of the agenda of the Board meeting indicating the business to be transacted at the
meeting is generally sent along with the notice of the meeting although it is not compulsory
under law. The agenda should be complete and sufficiently explicit to enable the directors
lo give their considered opinion on the matters at the meeting. The agenda of Board
meetings usually include some routine items, such as approval of minutes, transfer and
trarlsmissio~lof shares, finance and accounts, report of committees, etc. There may be
special items also on the agenda relevant to particular meetings. These may be, for instance,
calls on and lorfeiture of shares, approval of contracts, convening of general meetings,
dividends, borrowings, investment of funds, etc. The agenda of the Fist Board meeting held
illst after. the i~rcnrporalionof the company include many important itelns, ~ o c hs election of
l i ~ eChalnr~:ui< i i the Board, appointment of the Managing Director, Secretary, bankers
auditors, approval of the draft prospktus for public release in the case of a public company,
adoption of preliminary contracts, company's seal, etc.

A specimen of nollce and agenda of Board Meetings are given in Appendix 6.3 aid 6.4.

Meetings of Committees of Directors

A
To facilitate decision-making by the Board, small Committees may be appointed consisting
of a few directors to examine and report on different matters. The Artlcles of Association
usually empower the directors to appoint such committees. Some of these committees are
appointed on a permanent basis and entrusted with work of a routine nature, such as transfer
of shares, raising of finance, etc. These are usually known as Standing Committees.
Committees may also be appointed occasionally to deal with special matters, such as
allotmeilt of shares, or matters which need to be investigated, and known as ad hoc
Committees. Pemanent Committees have to meet at regular intervals, while ad hoc
committees may meet as often as necessary. The rules and procedures for convening and
conducting committee meetings may be laid down by the Board or framed by the respective
committees.

6.3.5 Other Meetings

It has been mentioned earlier that Shareholders' meetings may be of two broad types: i)
General Meetings and ii) Class Meetings, i.e., meetings of particular class of shareholders.
In this latter category are meetings of Preference shareholders. Such a meeting may be held
for the purpose of making changes in the Articles of Association as regards the rights and
privileges of the particular class of shareholders, or for the purpose of conversion of one
class of shares into another. The Art~clesof Association of the company usually provide for
and lay down the ruies and procedure for holding c l a s meetings.

Meetings of Debentureholders and Creditors are other types of company meetings. These
meetings may be held for different purposes, e.g.,
i) Comprising a disputed matter with creditors or compounding of debts;
ii) Securing the consent of aeditors to any scheme of reorganisation, reconstruction, or
amalgamation; or
iii) Securing the consent of aeditors and debentureholders at the time of winding up of
company.
cownprornlse or reorganisation. A ccrtilicJ cx)py af lf~cortlzr I I I U S ~he tilctl \ \ . I ~ I il~cRcgiqtr;~~ C O ~ ~ I \l.,rfi~rc*--!
I!.
ant1 ;I copy annexed to Lhc Me~norlu~dum ol' Associalio~~.

A company nixy hold meetings ol'debcnturcholdcrs for the purpose o l i ) varyilly 111ctcnn; ol
the sccurtly, or ii) moclitying to en;tblc the company lo issuc fresh dc.hcnl~~rc\or 10 v;Liv !hc
rate of inlcrest payable 10 existing debentureboldcrs. The rules ; u ~ procc&~c
l ior llol(l~~lg
such mct:tings ;uc gcnerallv ]:lid down in the Pchcntarc l'rust nccti (11-c.ntlor.\ctl:tr t11c h:~cli
01' thc D r k ~ l t ~ Bond.
~rc

(.'heck \'our I'rogrt.ss

I) For what purpose are meetings of the Board of Directors held?

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2) At what intervals aie Board meetings required to be held?

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3) List the routine items on the agenda of Board meetings.

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4) State the purposes for which meetings of Debentureholders and creditors of a company
may be held.
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5) Which of the following staternents are True and which are False?

i) The Companies Act requires that a Boardmeeting must be held at least once a
month and four times a year.
ii) A Board meeting may be held at any time, on any day, and at any place.
iii) Standing Committees of directors are appointed occasionally to deal with special
matters which need to be investigated.
iv) Transfer and transmission of shares form an item on the agenda of Board meetings
held from time to time.
v) A Court Order is necessary before a company can hold any mcctinp o f
dcbcoturcl~oldcr!..

6.4 REQUISITES OF COMPANY MEETINGS

The decision taken at any company become valid and binding only if the meeting has been
duly convened,~constitutedand conducted. Any irregularity in those respects will invalidate
the proceedings of the meeting. Company meetings must, therefore, be held in accordance 53
 Meetings with t l ~ crulcs and regulations laid down on the Companies Act and the Articles of
Asxocialion of the company. Sections 171 to 186 ofthe Act contain provisio.ns relating to
thc holding ot'gcneral meetings of public companies and subsidiary private c~~mpanies.
Howcvcr, these companies may also include additional rules in their Articlt:~for the condu~::t
ot'mccdups. Indcpeudent private companies are frce to make their own ruh:s in respect of
gc~~cr:tl mcctings and include !he s a n e in the Articles. The provisiorls of A~ctwill apply if
thcir Ardcles do not provide otherwise. In actual practice, the Articles of rrlost companies
co~icaunrcpulations governing thc convening aud conduct of ~neetings,

A company meering will be considered to have been validly lield if the fol'lowing requisites
arc t'ull'illcd:
I j The 111cctingmust have hccn convened by a proper authority.
2) Proper noticc must have been issued.
3) Thcrc is quorum at the meeting.
3j The Chairman to conduct thc proceedings is duly appointed.
5 ) The meeting is conducted according to n~les.
6) There is proper record of the proceedings of the meeting

Let us discuss the rclevance of thcse requisites.

Proper authority: A meeting shall he valid only when it is convened by proper aulhority.
Tlie proper authority to convene meetlngs is the Board of Director?,. The Board of Directors
should pass a resolution at its meetings to call m y general meeting, otherwise the notice
calling the meeting will become invalid, so also the proceedings off the meeting. Thus, a
notice issued by the secretary without the authority of a resolutiorl of the Board of Directors
is patently invalid.

Proper Notice: 'Notice' means an advance ~ntimationof the meeting so as to enable the ,
person concerned to prepare himself for it. A proper notice s h o ~ ~be
l d given to every
member, auditors, directors of the company and to every such pcrsou which is entitled to
arlend the meeting. The rrotice must he in writing and it must be given at least 21 clear days
hefore the date of the meeting.

Delihcrate omission to serve notice to onc or more m e m k r s ill invalidate the n...eting .
But an accidental omission will not render the meeting invalid. Similarly, non-receipt of
notice will not affect the validity of the meeting. The notice must state the date, time and
place of meeting.

Quorum: Quorum means the minimum numbers of membecs whose presence is necessary
at the meeting for transacting the business of the company. In the absence of a quorum, no
meeting can be held. Any resolution passed at a meeting without quorum shall be invalid.

Chairman: Every company meeting should be presided over by a duly elected chairman.
The chairman has to be there to conduct the meeting in aproper manner, the Articles usually
provide the mode of appointment of the chaim~anof a me~eting.

Tf the acliles do not provide otherwise the members who are personally present at the
meeting shall elect one among themselves to act as the chairman of the meeting. The
chairman should act bonafide in an impartial manner and in the interest of the company.

Properly conducted: It is essential that the business at the meeting must be conducted
according to rules. Company meetings are held for discussing particular issues relating to 4

the company's working and tiking decision on the same. The matter should be placed in the
fonn o f a resolution, it should be discussed thoroughly, amendments to it should be carefully
considered and then it should be decided by voting by show of hands or poll.

Proper record: A proper record of the proceedings should be kept in the Minutes Book.
Every company is required to maintain minutes of the proceedings of every general meeting
and meetings of the Board and its Committees. When the minutes are confirmed m d signed
54 by the chairman, they are acceptable in a court of law as evidence of the proceedings.
 6.4.1 Notice Company Meetings-I

The nonr~alrule for any meeting of shareholders of a public company is that the meeting
should be called by giving a notice of not less than 21 clear days. However, a private
company may provide in its articles for a shorter notice.

3 The ehaential:, ot a valld notice are:

is 1) It must clearly state the date, time and piace of the meeting as also the purpose of the
meetir.g.
2) The notice must be issued on the authority of'a resolution of the Board of directors.
!m 3) The nnuce should be signed by a person authonsed by the Board, or the company
secretary whould slgn the notlce.
4) It must he serlt to all persons who are entitled to recelve the notice.

The words. "clear (lays notice" indicate that the day of serving the notice and the day of
meeting are excluded. Thus, in normal practice, 21 clear days would mean 2 3 days. Further,
if the notice is to be sent by post, another 48 hours to be added to the 2 3 days. -Thus the
notice must be sent at least 25 days before the date of the meeting. A shorter notice can also
be given. In the case ot'annual general meeting, all the members shoold consent to the
shorter imtice and in the case of any other meeting, members holding not less than 95% of
the paid up share capital or voting rights hold consent to it. The consents can be given either
before or at the meting, and has to be given in the prescribed form.

'm ,
1
Persons Entitled to Notice: The persons who should be sent the notice of any general
meeting are:
i 1) Everl/memberofthecompany;
2) Persons entitled to a share in consequence of the death or insolvenc? of the member;
3) Auditors of the company for the time being;
4) Public trustees in respect of holdings to which Section 153B is applicable.

Further, if the notice pertains to the meeting of a particular class of shareholders,then it

should be sent only to the shareholders of that class.

6.4.2 Quorum

As explaired m Unit 4 (Section 4.6.4) a quorum is the minimum number of persons who
must be present in order to constitute a valid meeting. If there is no quorum, the meeting
shall not be valid and the business transacted at such,meeting will be invalid. The main
purpose ol'having a quorum is to avoid decisions being taken at a meeting by a small
minority vihich may not be acceptable to the majority of members.

Generally the quorum is fixed by the Articles of the company. According to Section 174 of
the Comp.mies Act, unless the Articles provide for a larger number, five persons personally
present (and not by proxyj in the case of a public company and two persons present in the
case of any other company, shall constitute the quorum for a general meeting of the
company .

If within half an hour from the tune appointed for holding a meeting of the company,
quorum iz: not present, the meeting, if called upon the requisition of members, shall stand
L dissolved.

In any other case, if there is no quorum within half an hour from the time appointed for
holding the meeting, then the members present shall f o h the quorum. But there must be at
least two persons to hold the meetmg. These provisions are also applicable to private
companies, if the articles do not provide otherwise.

According to Article 49 of Table A, the quorum most be present at the time when the
. meeting begins and proceeds to take up business. It means that the quorum must be present
at ~ h cbeginning o l the lneetings and it need not be present throughout or at the tirne oP
taking votes oil any resolution. But as regards the meetings of the Board of'Directors, thc
rluorum must bc present throughout the meeting. A quorum is presumed unless it is
clues~ionedat the meeting.

6.4.3 Agenda

The tcnn 'agenda' literally nieans things to be done'. The agenda of a company meetil::
rel'cr to lfle business to hc t~;ulsactedat the meeting. The Con~pmizsAct docs not mentioli
the word 'agcnda' h connection with meetings, but Sec. 172(1) has stipulated that every
llotice of a meeting should contain "a statement of the business to he transacted ;rt a
company meeting" i.e. agendamust be included in the notice of the meeting. [t is implied
that the busincss of the meeting must be conducted in tile same order in which the items arc
listed in the agenda. However, the order can be varied with the consent of the meeting.

6.4.4 Proxies

The term 'proxy' is used both for the person who is authorised to act atid vote for another at
a meeting of the company and the instrument through which such a person IS named and
authorised to attend the meeting. Section 176 of the Companies Act, states that any member
of a company who is entitled to attend and vote at a meeting of the company, is entitled to
appoint another person a?his proxy to attend and vote instead of himself. Thus, any person
inay be appointed a?a proxy whether he is a member ok the company or not.

Unlc.\\ clle ;uhcles provide otherwise: (a) a proxy a n n o t be appoinled in the case of a
comp:u\y having nc share capiQl and (i>) a member of a pfrvate company cannot appoint
more than one proxy to attend on the same occaion.

The instrument appointing a proxy must he in writing and signed by the appointed or his
attorney duly authorised in writing and must be stamped. The instrument appointing a proxy
should be deposited with the company right eight hours before the commencement of the
meeting. Any provision in the articles of the company requiring the proxy form to he
deposited earlier than 48 hours will be invalid.

The proxy has no right to speak at the meeting, bul he can put questions in writing and
sending the same io the Chairman for answer. For each meeting, a separate proxy is
required. A proxy can demand a poll and unless the articles. Otherwise provide a proxy is
not allowed to vote except on a poll.

Every notice of zmeeting must clearly state that a member is entitled to appo~nta proxy and
that the proxy need not be a member. If default is made, every officer in default shall be
punishable with tine upto Rs. 500. .Sut no invitation to appoint any person as proxy be made
at the expense of the company and in case any such invitation is issued, the officer in default
will be liable to tine upto Rs. 1,000.

Every member entitled to vote in the meeting of the company is entitled to inspect the
proxies deposited at any time during the business hours. A proxy is albays r-bvocable, but ~t
cat1 be revoked before the proxy has voted. For revoking the company must be informed. In
case of death or insanity of a member appointed, if the prosy personally attends and votes at
the meeting, the proxy shall stand revoked.

II
6.4.5 Appointment of Chairman

Chairma1 is thc person who has been designated or elected to preside over and conduct the
proceedings of a meeting. A chairman is necessary for conducting a mecting properly. He
is the chief authority in the meeting, he is the umpire of debates and he regulates the meeting.

Articles usually provide the mode of appoinunenl of .the chainman of a meeting. But if there
is nothing in the articles, the members personally present at the meeting shall elect one of
themselves to be the chairman of the meeting. [ f a poll is demanded on the election of die
chairman, it must be taken forthwith and a chairman is elected for the purpose. These
 .>
provisions :cs given in Sect~on175 of Ule Act are appl~cableonly if there is no provision in Cow"n~Meeting+=
the articles.

Regulations 50 to 52 of Table A state the ru~lesregard~ngthe appointment of chairman. I h e

articles are usually prov~dedat the general meeting of the comp;tny. 11' there is no such
chairmarl 01 if he is not present w~thintifleer; minutes of the tune fixed for holdmg the
meeting, nr is unwill~ngto act :is chairman or if no tlirector is present within (ifteen minutes
of the time kixed for holding the meeting, dle members present shall choose one of
themselves as the chairman.

The chairman has prima facie authority to decide all questions which arise at a meeting and
which require decision at the time. He hay the power to give his ruling on points of order, to
expel any unruly member. to adjourn the meeting if it becomes impossible to conduct the
meeting smoothly, to regulate the taking of poll, to sign and date the proceedings of the
meeting. It so authorised by the articles, the chairman may give his casting vote to decide
the issue where the members are equally divided for and against the resolution.

The chairman must see that the proceedings of the meeting are conducted according to the
rules, that proper order is maintained at the meeting, that proper opportunity is given to
members to express their views. He should see that die voting 1s fair and the sense of the
meeting is properly ascertained on each and every motion. He must act bonaiitle at all times
and in the interest of the company.

6.5 MOTIONS AND RESOLUTIONS

As explained in Unit 5 (Section 5.4.3) decistons of the members at a general meeting are
expressed by way of resolutions. At the meeting a definite proposal ir~the form of a
'motion' is placed, it is discussed thoroughly and finally is put to vote. When the motion is
passed by a majority it is called a resolution. In simple words, resolution meam the
decision taken a t the meeting.

Tbe Companies Act provides for three types of resolutions that may be passed at the general
meeting of a company (i) Ortlinary resoluhons; ii) Speslal resolutions; and iii) Resolutions
requiring special notice.

6.5.1 Ordinary Resolutions

An ordinary resolution is one which is pissed hy a simple majority, that is to say that the
votes cast in favour of the resolution exceed the votes ca$t against the resolution. For
examgle, if at a meeting whero, say 81 members cast their votes in a manner that 41 ca$t
votes in favour and 40 against the motion, the ordinary resolution is considered to be taken
as passed. The voting may be either by show of hands or by poll. An ordinary resolution is
required to pass the annual accounts, to declare dividend, to appoint auditors to elect
directors, Eo issue shares at a discount etc.

A special resolution is one which is required for transacting special business and is required
to be passed by a three-fourth maiority. The voting may be either by show of hands or by
polls. In determining the three-fourths majority, all the votes cast by members, whetber
2 personally or by proxy, are considered.

According to Section 189(2) cbf the Companies Act, a resolution shall be a special resolution
when:
i j the intention to propose Ure resolution as a special resolution has been duly specified in
the notlce calling the g e n t ~ ameetings.
l
ii) the notice has been duly g:iven'of the general meetings; and
iii) Ibe votes cast by members in fgvour of the resolution are not leoeleoetban
tbne times the
3Fnym-k of votes cast against the resolution. 57
 The special resolution is necessary to transact important business. The articles of b e
company may specify purposes for which a special resolution is required. The Company
Act has also expressly required the passing of special resolution on certain matters. The
following are some of the instances where special resolutions are necessary:
i) to alter the memorandum of association;
ii) to alter the articles of association;
iii) to create reserve capital;
iv) to reduce capital;
v) to pay interest out of capital;
vi) to allow a director to hold office in profit of the company;
vii) tor voluntary winding up of the company.

6.5.3 Resolutions Requiring Special Notice

A resolution requiring special notice is, in fact, not a type of resolution, but is a kind of
ordinary resolution for which a prior notice of intention to move the resolution has to be
given to the company. With regard to certain matters, a special notice is required to be given
of a resolution to be moved at a meeting of the company. The object is to.give members
sufficient time to consider the proposed resolution. Where special notice of a rmolution is
required by the Act or the articles, the notice of intention to move the resolution must be
given to the company at least 14 full days before the date of the meeting. On receipt of such
a notice the company must give notice of the resolution to ihe members at least seven days
before the meeting either individually or through an advertisement in a newspaper having an
appropriate circulation or in any other mode allowed by the articles.

According to the Companies Act, a resolution requiring special notice is required to transact
the following business:
i) to remove a director before expiry of his term;
ii) to appoint an auditor in place of the retiring auditor;
iii) to appoint a new director in place of the removed director;
..-
iv) to pass a resolution that retiring auditors shall not be Appointed.

6.6 METHODS AND PROCEDURES OF VOTING IN

COMPANY MEETINGS
Voting procedures and methods for ascertaining the size of a meeting have been explained in
f
unit 5. In company meetings the shareholders have the right to discuss every proposed
resolution and propose amendments therein. After the motion is discussed, it is put to vote.
The voting may be (a) by show of hands or (b) by taking a poll.

By show of hands: At any general meeting, a resolution put to vote is decided first by show
of hands. On a show of hands, each number shall have one vote. Unless the articles
otherwise provide, proxies are not entitled to vote in case of such voting. The chairman
counts the hands 'for' and 'against' a resolution and declares the result and when it is
recorded in the minutes it becomes a conclusive proof of the fact. However, the dissatisfied
shareholders may challenge the validity of the passing of the resolution or they may demand +

a poll.

By taking a poll: If there is dissatisfaction about the result of voting by show of hands a poll
is taken. The poll may also be demanded even before the declaration of d e result on a show
of hands.

In the case of a public company having a share capital, a poll may be demanded by any
member present personally or through proxy and holding shares having not less than one
58 tenth of the total voting power or, on wbich not less than Rs. 50.000 has been paid-up. In
 the of a private company having share capital, a poll may be demanded by one rnember Con11~anyMeetil1es-1
personally present or by proxy if seven such memben: are personally present in Ule meeting
or by two inembers if more than seven members are present.

In a poll, the voting rights sf member are in proporlion to his share of the paid-up equity
capital 01' the company. If the articles so provide member holding shares on which calls are
in arrear or in regard to which the company has r:ghl of lien. may not be allowed a vote in a
poll.

The charman of the meeting shall appoint two scrutineers to scrutinise the votes given on
the poll, and to report there on to him. Out of the two scrutineers, at least one shall be the
member of tile company but h e should not be an officer or an employee of the company.
The result of the poll shall be deemed to be a decision of the meeting on the resolution on

--
6.7 MINUTES OF COMPANY MEETINGS
The Company Act, provides that every company must keep the minutes of the meeting
containing a fair and correct summary of all proceedings of the meetings. The minutes of a
meeting should be recorded within 30 days of the meetir~gin the books called the minute
book, kept for the purpose. Each page of Lhe minute book should be initialled and last page
signed and dated by the chairman of the meeting. The.miiiutes duly signed by the chairnlan
are presumptive evidence that the meeting was duly called and held and all proceedings duly
carried out. The minutes book should be kept in the safe custody so as to avoidany
tampering of the same. The minutes of a general meeting sl~ouldalso be signed within 30
days of the meeting, by the chairman of the meeting or any other authorised person. The
minutes book relating to the general meeting is open to inspection of any member of the
company without charge during business hours at least tbr 2 hours.

Further, a member of the company is entitled to be furnished within seven days of his
request with a copy of any minutes of the general meeting on payment of such sum as may
he prescribed for every 100 words or part thereof.
,,
Checlc Your Progress

1) Define 'Quorum'.

2.) What do you understand by 'proxy'.

) What IS poll?
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
..............................................................................................................................................
 4) What is a resolution?

..............................................................................................................................................

5) List three instances which requ,ire a special resolution?

6) Why is a chairman necessary for a meeting of a company?

..............................................................................................................................................
.................................................................................................................................... !.........
..............................................................................................................................................
..............................................................................................................................................

7) State whether the following are True or False?

i) The quorum at a general meeting of a public company is the personal presence of

three members and in case of a private company the personal presence of two
members.
ii) For the purposes of quorum, only members present in person and not by proxies,
are to be counted.
iii) One person cannot conshtute quorum under any circumstances.
iv) The proxy must be a member of the company.
v) A proxy can speak at a general meeting and cast his vote on a show of hands.
vi) A resolution put to vote at a general meeting shall bc decided on a show of hands i.n
h e first instance.
vii) A poll can be demanded by any ten members of the company.
viii) An ordinary resolution is passed by a simple majority.
ix) A special resolution is required to be passed for changing the name of a compaIly.
x) An ord~naryresolution is necessary for issuing shares at a discount.
xi) For appointing another director in place of the removed director, a resolution
requiring special notice is necessary.

-
6.8 LET US SUM UP -
Y
Company meewrgs may be divided into three broad categories (i) Shareholders' meetings,
(ii) Meetings of Directors and (iu) Meetings of creditors and debentureholders.

The generaJ meeting of members are of great importance in the working of the company. 1I
The members in the general meetings glve the guidelines to the directors for carrying a, thc:
business.of the company.

The meeting of the members can be of three types: (a) statutory meetings (b) annual genaal
60 meeting (c)kxtraordinary general meeting.
Statutory meeting is the first meeting%f the shareholders of a public company and is held Con~panyMeetings-I
only once in the life time of the company. This meeting must be held not earlier than one
month axid not more than six months after the date on which it became entitled to commence
business. At least twenty one days clear notice must be given and the notice must be
accompanied by a statutory report. This report contains all the necessary information in
regard t c ~the formation of the company. The main purpose of holding this meeting is to
inform the shareholders about the progress of allotting the share and the position of the
compan v

An annual general meeting is required to be held each year to transact ordinary business,
such as presentation of audited accounts, declaration of dividends, appointment of directors
and auditors. The first annual general meeting must be held within a period of not more than
18 monLhs from the date of incorporation. The time gap between two annual general;
meetings must not be more than 15 months. Every person entitled to receive the notice.
must get a notice at least 21 clear days before the date of the meeting.

Any mee.ting other man the statutory and an annual general meeting is called an
extraordinary general meeting. Such meetings may be convened at any time to transact
some urgent business which cannot be postponed till the next annual general meeting. Such
meeting can be convened by the directors either on their own motion or on requisition from
members or by the requisitionists themselves on the failure of the Board to call the meeting
or by the Company Law Board.

Unless the articles provide for a large number, the quorum shall be two members personally
present in the case of a private company and five members personally present in the case of a
public company.

Members of a company having share capital have a statutory right to appoint proxies. A
proxy need not be a member of the company. A proxy cannot speak at the meeting but he
can vote at a poll. The voting at the general meetings may be either by show of hands or bv
taking a poll.

The decisions in meetings are taken in the form of resolutions. There are three types of
resolutions: (i) ordinary, (ii) special and (iii) resol~~tions
requiring special notice.

Ordinary resolution is one which is passed by simple majonty of votes of members present
in the meeting. An ordinarj resolution is needed to transact ordinary business. For example,
to pass annual accounts, declare dividends, etc.

Special resolution is one where it is specifically mentioned in the notice calling the meeting.
Such a resolution can be passed only by three-fourthsmajority. Special resolution is
necessary for altering the memorandum, for reducing share capital, for creating reserve
capital, for paying interest out of capital etc. A resolution requiring a special notice is one
where the mover of the resolution is required to give notice to the company at least 14 days
before the date of the meeting about h ~ intention
s to move the resolution. A p c i d notice is
required before moving a resolution for removing> director before the exp@ of his t m , for
appointing another person as a director in place of the remnved director, for protiding that
the retiring auditors shall not be reappointed etc.

g.9 KEY WORDS

Meeting An assembly of two or more persons for transacting some lawful business.
Statutory Report: A report containing vital information about the information of the
company.
Notice: An intimation in writing about the date, place and time of the meeting.
Quorum: Minimum number of members who must be present at a meeting to transact a -
business.
Agenda: Matters to be discussed at the meeting.
Chairman: The person who presides over the meeting
Motion: A proposal put before the meeting for consideration.
Resolution. When a motion is duly passed, it becomes a resolution or decision.
Proxy: An authority to represent and vote for another person at a meeting.
Poll: A method of voting where a member records the number of votes in proportion to
equity shares held by him.
Minutes: Written record of the proceedings of a meeting.

6.10 ANSWERS TO CHECK YOUR PROGRESS

A 3 i) False ii) False iii) True iv) True v) False vi) False vii) True viii) True
B 6 i) True ii) False iii) True iv) True v) False vi) True vii) False viii) True
C 5 i) False ii) True iii) False iv) True v) False
D 7 i) False ii) True iii) False iv) False v) False vi) True vii) False viii) True ix) False
x) True xi) True

6.11 TERMINAL OUESTIONS

1) State and explain the purpose of holding different types of company meetings.
2) What are the requisites to be fulfilled to ensure validity of company meetings?
3) What is statutory meeting? When is it held? State the provisions of the Companies Act
relating to statuttny meetings.
4) What is a statutory report? What are the particulars reqeired to be included in that
report? Can members raise any matter at the statutory meeting which is not related witb
the statutory report?
5) What is meant by 'notice' of ameeting? Discuss briefly the rules governing the notice
of general meeting of a public company.
6) What is the sigrufcance-of rbe annualgeneral meeting of a company? What bwiness i s
bansacM in such meetings? Repare the agenda of the annual gened meeting of a company.

7) State briefly the importance of board meetings. What are the items of agenda usually
included in the first meeting of the Board of Directors of a public company?
8) How often are Board meetings required to be held? Why are Committees of Directors
appointed by the Board?
9) What is a special resolution? For what purposes are such resolutions necessary?
10)Does a special resolution and a resolution requiring special notice mean the same thing?
Give four instances where special notice may be necessary.
11)What do you mean by 'Quorum'? What happens if there is no quorum at a meeting?
What are the statutory provisions relating to quorum for different types of company
meetings?
12)Write explanatory notes on: i) Proxies ii) Privileges in speech, iii) Extraordinary General
Meeting.

Note: These questions will help you to understand a unit better. Try to write answers for
them. But do not submit your answers to the University for assessment. These are for
your practice only.
 Appendix 6.1

Specimen of Notice for Annual General Meeting

GRAPCO GRANITES LIMITED

Regd. Office, Plot No. 4, Somnathpur Estate, Dist, Balasore, Orissa
Corporate Office: 'Circular Court', 8th Floor, 8, A.J.C. Bose Road, Calcutta - 700 017
Notice

The Members,
Notice is hercby given that the Fifth Annual General Meeting of the Members of the
company at Plot No. 4, Somnathpur Industrial Estate, Balasore, Orissa on Friday the 24th
September, 1993 at 3.00 p.m. to transact the following business.

As Ordinary Business

> 1) To receive, and adopt the audited Accounts for the year ended 31st March, 1993 and the
report5 01' the Directors and Auditors thereon.
2) To declare dividend.
f 3) To elect Ilircctors.

i) To appoint a Director in place of Mr. K.M. Poddar, who retires by rotation and
bc~ngeligible offers himself for re-appointment.
ii) To appoint a Director in place of Mr. Heinz Wolf who retires by rotation and
bcing eligible offers himself for re-appointment.
1) To appoint Auditors to hold ol't-ice from the conclusion of this meeting until the
conclusion of the next Annual General Meeting and to authorise the Board to fix up their
remuneration.

As Special Business
5) To consider and if thought tit to pass, with or without modification the following
resolu tion:

"RESOLVED hat pursuant to Section 293 (i)(a) of the Companies Act, 1956 or any
amendmentor modification thereof, consent be and the same is hereby accorded to the
B o i ~ dof Directors of Ule Company ('the Board') to mortgage and/or charge in such form
and on such tcnns and conditions and at such time or times and conditionsand ;I[ such time
or times as tlie Board may deem fit, the present and future properties whether moveable or
immovable belonging or to belong w the Company including the whole or subtantially the
whole of the undertaking(s) of the Company and/or conferring power to enter uponltake
possession of U I properties
~ of the Company in certain events tolor in favour of any financial
Institutions, Banks, other parties or persons and/or their agents and/or Trustees including
Trustees for the Debenture Holders of the Company.

Provided however, the Company shall create mortgage andor charge its properties
mentiond above for securing financial assistance upto Rs. 10,000 lacs.

RESOLVED FURTHER that the Board be and is hereby authonsed and they shall always be
deemed to have been authorised to tinalise the documents for creating the aforesaid
mortgage andor charge and to do all such act, deeds and things as may be necessary for
giving effect to the above resolution.

RESOLVED FURTHER that the mortgage/charge, if any, crea:ed by the Board, on any or
all the aforesaid immovable and/or movable properties, be and is hereby confm,ed and
approved.
6) To consider and, if thought fit, to pass, with or without modification, the following
resolution:
 As an Ordinary Resolution:
'RESOLVED and pursuant to the provisic~nsof Sections 198,269,309and other
applicable provisions, if any, of the Companies Act 1956 consent be and is hereby
accorded to the~appointmentandremuneration of Mr. T. Swaminathan as a Wholetime
Director of the Company with effect from 30th October, 1992, for a period of five years-
on terms and conditions including remuneration in accordance with the provisions of
Schedule XI11 of the Companies Act, 1956, .asset out in Uie agreement, entered into
between the Company and Mr. T. Swarninad~an,a copy whereof initialled by the
Chairman for identification is placed before this Meeting.
Provided that the salary of Mr. T. Swaminathan be reduced by ten per cent in the event
of loss or inadequacy of profit in any financial yeiu during the afores$d period of his
appointment as a Wholetime Director of the Company."
The Register of the Members of Company shall reniain closed from 16th September,
1993 to 24th September, 1993 (both days exclusive). Share Transfers received in order
at the Corporate Office: Circular Court, 8, A.J.C. Bose Road, Calcutta - 700 017 by
the close of business on 15th September, 1993, will be in time to be passed'for payment
of dividend, if declared, to the transferees to their mandates and the dividend, if declared,
will be paid on or after 25th September, 1993 to those Members entitled thereto and
whose names shall appear on the Register of Member of the company on 24th
September, 1993 or to their mandates, subject however, to the provisions of
Section 206A of the Companies Act, 1956 or any amendment or modification thereof.

By order of the Board

C.S. Panicker

Financial Controller &

Company Secretary

Place: Calcutta
Dated: 14th August, 1993

Notes
1) The Explanatory Statement as required under Section 173(2) of the Companies Act,
1956 is annexed hereto.
2) A member entitled to attend aid vote at the meeting is entitled to appoint a proxy lo
attend and vote instead of himself and such proxy need not be a member of the company.
Proxies in order to be effective must be received by the company not less than 48 hours
before the meeting.
3) Dividends, if declared, at the Annual General Meeting will be paid subject to deduction
of Tax at Source on the Equity Share CapitaI of the Company as on 31st March, 1993, to
those Members whose names appear in the Register of Members of the Company as on
24th September, 1993.
4) Members desiring to file Exemption Certificate issued by the Income-Tax Officer or the
duly completed Statemelits in Form 15G (in duplicate) under the Income-Tax Rules are
requested to forward the same to reach the Corporate Office of the Company on or
before 24 September, 1993, kt will not be possible for the company to act upon such
Certificates or Statements received after the date.
5 ) P~~rsuant
to amendments to Income Tax Rules Tax Deduction Certificate should contain
the Permanent Account Number of the person to whom the cer-dte is issued. For this
purpose the Permanent Account Number may be furnishes ta the Company by such of
those membvs in whose case deduction of tax equity share dwidend is involved.
6) Members are requested to notify cbange I?address, if.any, mediately to Company at
their Corporate office 8, A.J.C. Bose Road, Calcutta- 700 017.
 Explanatory statement and sraternent of ~llterestas required by section 173 of the Cornparlies Conlpany hleeungs--l
Act, 1956

Item No. 5

As part of the expansion plans of the company your Directors are considering several
altemallves to rase loans for th~eCompany. Such financing is usualky secured by creation of
mortgag,dchargesin properties and undertakings of the company in four of any Financial
Institutions, Banks, Other Parties or Person and/or their Agents and/or Trustees including
Trustees for the Debentureholders of the Company.

Mortgaging by the Company of its properties or the wholk or substantially the whole of any
or all of the undertaking of the Company in favour of the Financial Institutions, Banks, Other
Parties or Persons and/or their Agents and/or Trustces including Trustees, for the Debenture
holders in order to secure debt financing (within the overall limit of the Borrowing powers of
the DGectors) may be regarded as disposal of the company's properties in terms of Section
293(1)('3 of the Companies Act 1956. It is, therefore, cons~derednecessary for the Members
to authcjrise the Board to create rnortgagdcharges in the manner proposed in the resolution
set out in item (5) of the Notice.

Your D~rectorsrecommend that the resolution be passed.

None of the Direcmrs are interested in the resolution save w d except nominee Director who
may be deemed to be interested to the extent of mortgage tobe created in favour of ICICI.

'Item No. 6

Mr. T. Swaminathan held the office of President of the Company prior to the appointment as
9birector. He has been associated with the Company for the Iast three years and has gained
intimate knowledge of the operations of the Company in all its facets. He ha- vast
experience of the Grarlite Industry and a wide knowledge of the Indian Economy.

At a Board Meeting held on 30th October, 1992 the Directors appointed Mr. T.
Swaminathan as a Wholetime Director of the Company, subject to the approval of members,
for a period of five years on the terms and conditions as set out below:

Terms and Conditions

il Sal;uy not exceeding Rs. 15,0001- per month.
ii) Perquisites subject to the conditions that the aggregate amount of the perquisiteshenefits
stated under Part A shall be restricted to an amount equal to the annual salary of Mr.
Swaminathan or Rs. 1,35,000/- per annum whichever is less and that perquisiteshenefits
shall be reckoned on the basis of actual expenditure or liability incurred by the Company.
Your Directors recommend that the resolution be passed.
Apart from Mr. T. Swaminathan no other Directors is concerned or interested in the
resolution.
Tht: Agreement entered into by the Company with Mr. T. Swaminathan will be available
for inspection by rhe members on any working day between 10 a m . & 12 a.m.

By order of the Board

C.S. Panicker
Finance Controller &
Company Secretary

Place: Calcutta
Dated: 14th August, 1993.
 Appendix 6.2

Specimen of Notice of Extraordinary General Meeting

STANDARD FABRICS LIMITED

Notice of Extraordinary General Meeting

An extraordinary General Meeting of Standard Fabrics Ltd. will be held at the Registered Office,
58 Baker Street, Fort, Bombay-1, on Friday, 25th June 1993 at 3 p.m. for considering and, if
thought fit, passing the followir~gResolution which will be proposed as a Special Resolution.
1) "That sub-clause i) of Article 29 of the Company's Articles of Association be deleted
and the following substituted thereof:
"i) On the death of a member, the survivor or survivors where the member was i joint
holder, and his legal representatives where he was a sole holder, shall be the only person
recognised by the Compmy as having any title to his interest in the shares"

By order of the Board

S.C. Damania
Secretary

Fort, Bombay400 001

Dated: 2 June 1993.

Note: ,,. ,

1) A member entlued to attend and vote at the meeting is entitled to appoint a proxy or
proxies to attend and vote instead of himself and the proxy or proxies need not be a
memberlmembers.
2) The relevant Explanatory Statement pursuant to Section 173(2)of the Companies Act
1956, in respect of the above mentioned resolution is annexed hereto.

Explanatory Statement as required under Sec. 173(2) of the Companies Act 1956.
As required by Sec. 173(2)of the Companies Act 1956, the following explanatory statement
sets out all material facts relating to the special business mentioned in the accompanying
notice of the Extraordinary General Meeting to be held on 25th June 1993.

Special Resolution No. 1

Regulation 29(i) of the Company's Articles of Association provided that hl the case of
shares registered in the name ofqwo or more holders, the survivor or survivors, or the legal
representatives of the deceased holder jointly with the survivor or survivors, shall be the
person($) recognised by the Company as having title to the interest of the deceased in the
shares. The effect of this provision is that the automatic devolution of the interest of the
deceased in the shares on the survivor or survivors, is not recognised but the company haq
been given discretion in the matter. This usually complicates and delays the process of
transmission of shares. -
In gder to simplify and expedite the process, it is proposed to amend regulation 29(i) of the
Articles of Association of the company on the lines of regulation 25(1) of Table A of the
Companies Act 1956, so as to provide for automatic devolution of the deceased's interest in
the shares on the survivor or survivors.
A copy of the Articles of Association of the Company, with the proposed amendment may
be inspected at the Registered Office of the Company between 10. A.M. on any working day
except Saturday.

By Order of the Board

omb bay S.C. Damanii

66 Date& 2,Jtme 1993 Secretary
 Appendix 6.3 lcompany Meeangs-1

SPECIMEN OF NOTICE AND AGENDA OF FIRST BOARD MEETING

DCL SYNTHETIC FIBRES LIMITED

Regd. Office: "Usha Complex" 2nd Floor, 245 R Kingsway, Nagpur - 440 001.

Dear Sir,

I have to inform you that the fust meeting of the Board of Directors will be held at the
Registered Office of the Company on 4th August 1992, at 3 p.m. to transact the following
r business.
Agenda:
r-'
1) E,lectionof the Chairman of the meeting.

2) T b produce the Certificate of Incorporation, P.4emorandum and b c l e s of

P.ssociation.

3) Appointment of the fust Directors.

4) Election of the Chairman of the Board.

5) Appointment of Pdanaging Director, Secretary, Solicitors, Auditors and Bankers.

6) Adoption of the company's seal.

7) Fixing a quorum for the Board meetings.

8) (:onsideration and adoption of the Preliminary Contracts and Underwriting

contract.
9, C'onsideration and approval of the draft prospectus.

10) C'onslderation of the application to the stock exchange for listing of shares.
11) Any other business.

12) Fixing the date of the next Board meeting.

You are requested to please attend the meeting.

Yours faithfully

(Secretary)
 Appendix 6.4

SPECIMEN OF NOTICE AND AGENDA OF SUBSEQUENT BOARD MEJTIING

DCL. SYNTHETIC FIBRES LIMITED

Regd. Office: "Usha Complex", 2nd Floor,
245 R Kingsway, Nagpur
-
To

Shri J.N.Dastur,
1016 Church Road.
Baswan Gudi,
Bangalm-560 004

Dear Sir,

This is to info* you that the next meeting of the Board of D i t o r s will be held at the
Registered Office of the Company on Friday, 1st January 1993 at 4 p.m. to transact the
following business. You are requested to be present.
Agenda: 1) To read and approve the minutes of the last Board meeting.
2) To consider applications for transfer of shares.
3) To consider letter of resignation of the Manager of h e Branch.
4) List of accounts for payment to be produced and passed.
5 ) ?.ay other business with the wrmission of the Chair.
6) Fixing the date of the next Board meeting.

Yours faithfully,