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Accounting Standard And General Notes For Commerce Students

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Ind AS Vs AS: Relevance, Applicability and Critical Issues Maintenance of Registers and Returns Members' Meeting AS 10 (Revised) - Property, Plant and Equipment Companies (Accounting Standards) Amendment Rules, 2016 Management and Administration

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    MEMBERS' MEETINGS A company is required to hold meetings of the members to take approval of certain business items, as prescribed in the Act. The meetings to be held for seeking approval to ordinary business and special business are called annual general meeting and extraordinary general meeting. In certain cases, a company may have to hold a meeting of the members of a particular class of members. Members'meetings Extra-ordinary general meeting l) Class meeting Annual General Meeting ANNUAL GENERAL MEETING Annual general meeting (AGM) is an important annual event where members get an opportunity to discuss the activities of the company. Section 96 provides that every company, other than one person company is required to hold an annual general meeting every year. Following are the key provisions regarding the holding of an annual general meeting: 1. 2. 3. 4. Annual general meeting should be held once every year. First annual general meeting of the company should be held within 9 months from the closing of the first financial year. It shall not be necessary for the company to hold any annual general meeting In the year of its incorporation. Subsequent annual general meeting of the company should be held within 6 months from the closing of the financial year. The gap between two annual general meetings should not exceed 15 months. In case, it is not possible for a company to hold an annual general meeting within the prescribed time, the Registrar may, for any special reason, extend the time within which any annual general meeting shall be held. Such extension can be for a period not exceeding 3 months. No such extension of time can be granted by the Registrar for the holding of the first annual general meeting.
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    An annual general meeting can be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday. It should be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate. The Central Government is empowered to exempt any company from these provisions, subject to such conditions as it may impose. If any default is made in holding an annual general meeting of the company or in complying with any directions of the Tribunal, the company and every officer of the company who is in default shall be punishable with fine up to Rs. and in the case of a continuing default, with a further fine up to Rs. 5,000/- for every day during which such default continues. EXTRA-ORDINARY GENERAL MEETING All general meetings other than annual general meetings are called extraordinary general meetings. o By Board By board on requisition By requisionists By tribunal 1. BY BOARD The Board may, whenever it deems fit, call an extraordinary general meeting of the company. 2. BY BOARD ON REQUISITION The Board must call an extraordinary general meeting on receipt of the requisition from the following number of members: a) b) in the case of a company having a share capital: members who hold, on the date of the receipt of the requisition, not less than one-tenth of such of the paid-up share capital of the company as on that date carries the right of voting; in the case of a company not having a share capital: members who have, on the date of receipt of the requisition, not less than one-tenth of the total voting power of all the members having on the said date a right to vote.
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    The requisition should set out the matters to be considered at the proposed meeting and the same should be signed by the requisitionists and sent to the registered office of the company. The Board must, within 21 days from the date of receipt of a valid requisition, proceed to call a meeting on a day not later than 45 days from the date of receipt of such requisition. 3. BY REQUISITIONISTS If the Board does not within 21 days from the date of receipt of a valid requisition in regard to any matter, proceed to call a meeting for the consideration of that matter on a day not later than 45 days from the date of receipt of such requisition, the meeting may be called and held by the requisitonists themselves. However, in such case, the meeting should be held within a period of 3 months from the date of the requisition. Reasonable expenses incurred by the requisitionists in calling such a meeting shall be reimbursed by the company to the requisitionists. The company in turn recover such expenses from any fee or other remuneration under section 197 payable to such of the directors who were in default in calling the meeting. In case, the quorum is not present within half-an-hour from the time appointed for holding a meeting called by requisitionists, the meeting shall stand cancelled. 4. BY TRIBUNAL Section 98 provides that if for any reason it is Impracticable to call a meeting of a company or to hold or conduct the meeting of the company, the Tribunal may, either Suo moto or on the application of any director or member of the company who would be entitled to vote at the meeting order a meeting of the company to be called, held and conducted in such manner as the Tribunal thinks fit and give such ancillary or consequential directions as the Tribunal thinks expedient, including directions modifying or supplementing in relation to the calling, holding and conducting of the meeting, the operation of the rovisions of this Act or articles of the company. NOTICE OF MEETING A general meeting of a company may be called by giving not less than clear twenty-one days' notice either in writing or through electronic mode. Notice through electronic mode shall be given in such manner as may be prescribed. A general meeting may be called after giving a shorter notice also if consent is given in writing or by electronic mode by not less than 95% of the members entitled to vote at such meeting.
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    Every notice of a meeting shall specify the place, date, day and the hour of the meeting and shall contain a statement of the business to be transacted at such meeting. The notice of every meeting of the company shall be given to 1. 2. 3. every member of the company, legal representative of any deceased member or the assignee of an insolvent member; the auditor or auditors of the company; and every director of the company. BUSINESS TO BE TRANSACTED AT MEETING The businesses to be transacted in AGM are classified into two: 1. General Business 2. Special Business. The general businesses as specified in section 102 of the Act are; a) b) c) d) the consideration of financial statements and the reports of the Board of Directors and auditors the declaration of any dividend the appointment of directors in place of those retiring the appointment of, and the fixing of the remuneration of, the auditors. Any matter to be discussed in AGM other than those mentioned above are Special Business. All businesses items can be transacted at the extraordinary general meetings are special business. STATEMENTTO BE ANNEXEDTO NOTICE A statement setting out the following material facts concerning each item of special business to be transacted at a general meeting, shall be annexed to the notice calling such meeting, namely: 1. 2. 3. the nature of concern or interest, financial or otherwise, if any, in respect of each items of a. every director and the manager, if any b. every other key managerial personnel and relatives of the persons mentioned in sub-clauses (i) and (ii) c. any other information and facts that may enable members to understand the meaning, scope and implications of the items of business and to take decision thereon. Where any item of business refers to any document, which is to be considered at the meeting, the time and place where such document can be inspected.
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    QUORUM FOR THE MEETING Quorum refers to the minimum number of members required to constitute a valid meeting. Following are the minimum numbers provided in section 103, for various categories of companies. However, the Articles of Association of the company may provide for a higher number. Quorum for a private company is 2 members personally present. The quorum for a public company is as follows; No. of members as on the date of meeting Less than 1000 1000 to 5000 More than 5000 Quorum (members personally present) 5 members 15 members 30 members If the quorum is not present within half-an-hour from the time appointed for holding a meeting of the company: a) the meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine or b) the meeting, if called by requisitionists, shall stand cancelled. In case of an adjourned meeting or of a change of day, time or place of meeting, the company shall give not less than 3 days' notice to the members either individually or by publishing an advertisement in the newspapers (one in English and one in vernacular language) which is in circulation at the place where the registered office of the company is situated. If at the adjourned meeting also, a quorum is not present within half-an-hour from the time appointed for holding meeting, the members present shall be the quorum. CHAIRMAN OF THE MEETING Unless the articles of the company otherwise provide, the members personally present at the meeting shall elect one of themselves to be the Chairman thereof on a show of hands. If a poll is demanded on the election of the Chairman, it shall be taken forthwith in accordance with the provisions of this Act and the Chairman elected on a show of hands shall continue to be the
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    Chairman of the meeting until some other person is elected as Chairman as a result of the poll, and such other person shall be the Chairman for the rest of the meeting. PROXIES Any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person as a proxy to attend and vote at the meeting on his behalf. Every notice calling a meeting of a company which has a share capital, or the articles of which provide for voting by proxy at the meeting, should carry with reasonable prominence, a statement that a member entitled to attend and vote is entitled to appoint a proxy, or, where that is allowed, one or more proxies, to attend and vote instead of himself, and that a proxy need not be a member, A proxy shall not have the right to speak at the meeting. A proxy shall be entitled to vote only on a J/ poll. A member of a company registered under section 8 shall not be entitled to appoint any other person as his proxy unless such other person is also a member of such company. A person appointed as proxy shall not act as proxy on behalf of more than fifty members and members holding in the aggregate more than ten percent of the total share capital of the company carrying voting rights. The instrument appointing the proxy must be deposited with the company, 48 hours before the meeting. The instrument appointing a proxy must be in Form MGT. 11. It needs to be in writing and signed by the appointer or his attorney duly authorised in writing. If the appointer is a body corporate, the instrument should be under its seal or be signed by an officer or an attorney duly authorised by the body corporate. RESTRICTION ON VOTING RIGHTS A member shall not exercise any voting right in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or on which company has exercised any right or lien. No member can be prohibited from exercising his voting right on any other ground. VOTING BY SHOW OF HANDS At any general meeting, a resolution put to the vote of the meeting shall in the first instance be decided on a show of hands. A declaration by the Chairman of the meeting of the passing of a resolution or otherwise, by show of hands shall be conclusive evidence of the fact of passing of such resolution or otherwise, unless a poll is demanded before or immediately on declaration by Chairman.
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    VOTING THROUGH ELECTRONIC MEANS Every listed company or a company having five hundred or more shareholders, may provide to its members, facility to exercise their right to vote at general meetings by electronic means. A member may exercise his right to vote at any general meeting by electronic means and company may pass any resolution by electronic voting system. There are certain rules and procedures for casting votes through electronic voting systems. DEMAND FOR POLL Before or on the declaration of the result of the voting on any resolution on show of hands, a poll may be ordered to be taken by the Chairman of the meeting on his own motion/ and shall be ordered to be taken by him on a demand made in that behalf by the following person(s): a) in the case a company having a share capital: by the members present in person or by proxy, where allowed, and having not less than one-tenth of the total voting power or holding shares on which an aggregate sum of not less than or such higher amount as may be prescribed, has been paid-up and b) in the case of any other company: by any member or members present in person or by proxy, where allowed, and having not less than one-tenth of the total voting power. The demand for a poll may be withdrawn at any time by the persons who made the demand. A poll shall be taken forthwith, if it is demanded for adjournment of the meeting or appointment of Chairman of the meeting. The result Of the poll shall be deemed to be the decision of the meeting on the resolution on which the poll was taken. CIRCULATION OF MEMBERS' RESOLUTION As per Section 1 1, a company shall, on requisition in writing of certain number of members, give notice to members of any proposed resolution intended to be moved in the meeting or circulate any statement with respect to matters referred in proposed resolution. The company shall be bound to give notice of resolution only if the requisition requiring notice of resolution is deposited not less than six weeks before the meeting. In case of other requisition not less than 2 weeks before the meeting. The statement need not be circulated if the Central Government declares that the right conferred is being abused to secure needless publicity for defamatory matters. If default is made the company and every officer of the company shall be punishable with fine.
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    REPRESENTATION OF PRESIDENT AND GOVERNORS IN MEETINGS Section 112 of the Act provides that President of India or the Governor of a State, if he is a member of a company, may appoint such person as he thinks fit, to act as his representative at any meeting of the company. The person so appointed shall be deemed to be a member and have the same rights including the right vote by proxy or postal ballot, as the President or Governor could exercise as a member of the company. REPRESENTATION OF CORPORATIONS AT MEETING OF COMPANIES AND OF CREDITORS In terms of Section 113, where a body corporate is a member or a creditor including a holder of debentures of the company and it authorises any person as its representative at any meeting of the company or any class of members of the company or at any meeting of creditors of the company, such representative shall be entitled to exercise the same rights and powers including right to vote by proxy and by postal ballot on behalf of the body corporate which he represents. ORDINARY AND SPECIAL RESOLUTIONS Section 114 provides with regard to Ordinary and Special Resolution. ORDINARY RESOLUTION A resolution shall be an ordinary resolution if the notice has been duly given and it is required to be passed by the votes cast, in favour of the resolution, including the casting vote, if any, of the Chairman, the resolution. exceed the votes, if any, cast agai SPECIAL RESOLUTION A resolution shall be a special resolution when: a) the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution; b) the notice required under this Act has been duly given; and c) the votes cast in favour of the resolution, are required to be not less than 3 times the number of the votes, if any, cast against the resolution.
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    RESOLUTIONS REQUIRING SPECIAL NOTICE Section 115 provides that where, by any provision contained in this Act or in the articles of a company, special notice is required of any resolution, notice of the intention to move such resolution shall be given to the company by such number of members holding not less than 1% of total voting power or holding shares having aggregate paid-up value not exceeding Such notice shall be sent by members to the company not earlier than three months but at least 14 days before the date of the meeting at which the resolution is to be moved, exclusive of the day on which the notice is given and the day of the meeting. The company shall immediately after receipt of the notice, give its members notice of the resolution at least seven days before the meeting, exclusive of the day of dispatch of notice and day of the meeting, in the same manner as it gives notice of any general meetings. RESOLUTIONS PASSED AT ADJOURNED MEETING As per Section 116 where a resolution is passed at an adjourned meeting of a company; or the holders of any class of shares in a company; or the Board of Directors, the resolution shall be treated as passed on the day it was actually passed and not on any earlier date. RESOLUTIONS AND AGREEMENTS TO BE FILED WITH THE REGISTRAR Section 117 provides that a copy of every resolution and an agreement in respect of matters specified therein together with an explanatory statement shall be filed in Form MGT. 14 with the Registrar within thirty days of its passing. The Registrar shall register the same and in case of any default, a company and every officer who is in default including the liquidator shall be punishable with fine which shall not be less than Rs. but which may extend to Resolutions or agreements to be filed with registrar as per section 117 are; a) b) c) d) special resolutions; resolutions which have been agreed to by all the members of a company, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions; any resolution of the Board of Directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a managing director; resolutions or agreements which have been agreed to by any class of members but which, if not so agreed to, would not have been effective for their purpose unless they had been passed by a specified majority or otherwise in some particular manner; and all resolutions or
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    e) f) g) h) agreements which effectively bind such class of members though not agreed to by all those members; resolutions passed by a company according consent to the exercise by its Board of Directors of any of the powers under clause (a) and clause (c) of sub-section (1) of section 180; resolutions requiring a company to be wound up voluntarily passed in pursuance of section 304; resolutions passed in pursuance of sub-section (3) of section 179; and any other resolution or agreement as may be prescribed and placed in the public domain. MAINTENANCE OF MINUTES OF MEETINGS Section 118 provides that every company shall prepare, sign and keep minutes of proceedings of every general meeting, including the meeting called by the requisitionists and all proceedings of meeting of any class of shareholders or creditors or Board of Directors or committee of the Board and also resolution passed by postal ballot within thirty days of the conclusion of every such meeting concerned. In case of meeting of Board of Directors or of a committee of Board, the minutes shall contain name of the directors present and also name of dissenting director or a director who has not concurred the resolution. The chairma shall exercise his absolute discretion in respect of inclusion or non-inclusion of the matters which is regarded as defamatory of any person, irrelevant or detrimental to company's interest in the minutes. Minutes kept shall be evidence of the proceedings recorded in a meeting. A distinct minute book shall be maintained for each type of meeting namely: 1. 2. 3. 4. general meetings of the members; meetings of the creditors; meetings of the Board; and meetings of the committees of the Board. Minutes to be maintained according to the Secretarial standard and shall be recorded in the relevant book within 30 days from the close of the said meeting. INSPECTION OF MINUTE BOOK OF GENERAL MEETING In terms of Section 119, the minute's book of general meetings shall be kept at the registered office of a company and shall be open for inspection to members during business hours without any charge subject to such restrictions as the company may impose. A member shall be entitled for a copy of any minutes, subject to payment of fees as may be specified in the Articles of Association of the company,
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    but not exceeding a sum of Rs. 10/- for each page or part of any page. The copy should be made available to him within seven days of his making request. MAINTENANCE AND INSPECTION OF DOCUMENT IN ELECTRONIC FORM According to section 120 the documents, records, registers, minutes may be kept and inspected in electronic form. According to Rule 27, every listed company or a company having not less than one thousand shareholders, debenture holders and other security holders, shall maintain its records, as required to be maintained under the Act or rules made there under, in electronic form. REPORT ON ANNUAL GENERAL MEETING In terms of section 121(1) every listed public company required to prepare a report on each annual general meeting including the confirmation to the effect that the meeting was convened, held and conducted as per the provisions of the Act and the rules made thereunder. A copy of the report is to be filed with the Registrar in Form MGT. 15 within thirty days of the conclusion of annual general meeting along with the prescribed fee.


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