Alchemy Pharmaceuticals Ltd. is a listed company and is one of the leading pharma companies, having multiple factories across India. It is currently contemplating to further expand its operations. In April 2026, the stat

CS Professional · Environmental, Social and Governance (ESG) Principles and Practice · PYQS · June 2026
Alchemy Pharmaceuticals Ltd. is a listed company and is one of the leading pharma companies, having multiple factories across India. It is currently contemplating to further expand its operations. In April 2026, the statutory audit and annual activities by the secretarial team were in full swing as the financial year 2025-26 was over recently. Sashi, the Company Secretary of the Company, had a detailed meeting with Sumana, the Secretarial Auditor about the upcoming Secretarial Audit. He mentioned to Sumana that, Mannan, one of the independent directors had not attended the board meetings since last many quarters and does not appear to be interested to continue on the Company's Board. There were also media news about his involvement in activities / businesses with other companies, apparently compromising his integrity and independence. On the point relating to independent directors and their role, Sumana highlighted that, as per SEBI (LODR) 2015, every listed entity should disclose in its report, a chart or a matrix setting out the skills, expertise and competence of the board of directors. And, with reference to the board's competency diversity, SEBI (LODR) 2015, with the objective of improving transparency, has widened the perspective of board diversity by adding skill diversity as an element of board composition. Therefore, building the right Board requires an understanding of director's competencies. He also emphasised that director's competencies encompass technical and behavioural competencies. He also suggested that the Company's Board can consider appointing a lead independent director, as done by many large corporates. In last week of April 2026, the Board decided to appoint a new director and even considered convening a board meeting at short notice. Sashi was on a personal emergency leave, hence this matter was being handled by Arul, Sashi's assistant, a newly qualified Company Secretary, who joined the Company recently. Arul served the notice of the proposed board meeting to be held on 3rd May 2026 through speed post on 1st May 2026 stating in subject line as 'Proposed board meeting on 3rd May 2026' to discuss appointment of new independent director and to discuss other matters, on a plain paper mentioning the Company's name and date. One of the Directors, who was very senior and experienced, called Sashi, expressing concern about the validity of the notice stating that there should be a clear 7 days' notice and that the notice did not contain anything about the meeting being called at a shorter notice. Arul contended that there is a provision in the articles of association for a shorter notice, hence meeting can be held at shorter notice. Considering his absence, Sashi asked Arul to consult you, a Senior Company Secretary on this matter. Based on the above facts, answer the following: Examine the validity of the notice narrating the irregularities, if any, and the consequences thereof.

Answer & Explanation:

Provisions related to Notice of Board Meeting: As per Section 173 of the Companies Act, 2013 read with Para 1.3 of the Secretarial Standard-1 (SS-1), the Notice of Board Meeting shall be given in writing by the Company Secretary or where there is no Company Secretary, by any Director or any other person authorised by the Board, specifying the serial number, day, date, time and full address of the venue of the Meeting. The notice shall be served at least seven (7) days before the date of the Meeting, unless the Articles of Association prescribe for a longer period, in which case the Articles should be complied with. Further, in case, the Company sends the Notice by speed post or by registered post, an additional two days shall be added for the service of Notice, as provided in para 1.3.6 of the SS-1. However, a Board meeting may be called at a shorter notice to transact urgent business subject to the condition that the Articles of Association of the Company provide for giving such notice to transact urgent business. In accordance with para 1.3.11 of SS-1, the fact that meeting is being convened at a shorter notice shall be stated in the notice of the Meeting. Irregularities in the Notice Following are irregularities in the notice sent by Arul: The serial number, day, time and full address of the venue of the Meeting and the fact that the meeting was being convened at a shorter notice was not mentioned therein. In the absence of Sashi, Company Secretary of the Company, Arul must have been authorised by the Board to send the Notice of Board Meeting. The Notice of meeting does not state the name of the person sending the notice and whether he is the authorised person. The notice of the meeting to be held on 3rd May, 2026 was sent through speed post on 1st May 2026. In this case, the two days for serving the notice through speed post was not provided and therefore, there is a possibility that one or more of the directors might not have received the notice in time to attend the board meeting. The notice should contain detailed agenda and notes on agenda items. The facts indicate only a brief mention of appointment of a director and other matters. The notice is procedurally defective and does not fully comply with Section 173 of the Companies Act, 2013 and SS-1. Consequences of Irregular Notice The irregularity in the Notice of the Board Meeting may affect the validity of the Meeting itself and the decisions taken thereat. Also, where the notice of meeting is not properly sent to all the Directors, Resolutions passed at such a meeting are not valid. Therefore, the Company and the officers of the Company may be exposed to penalties for non-compliance.

Topics: Company Law, Secretarial Standards

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic