Nitika Energies Ltd, is a growing company in non-renewable energy space. It has 9 directors on its Board, of which three are independent directors. As a good governance practice, the Company follows board procedures in t

As per Section 175 of the Companies Act, 2013 and Para 6 of the Secretarial Standard - 1 on Board Meetings, following procedure shall be followed by Minu for passing the Resolution of Board of Directors by circulation: The draft resolution, together with the necessary papers, if any, shall be circulated to all the Directors including Interested Directors on the same day, at their addresses (postal or e-mail) registered with the company in India by hand delivery or by post (speed or registered) or by courier, or e-mail or by any other recognised electronic means. In case of absence of such details or any change thereto, any of the addresses appearing in the Director Identification Number (DIN) registration of the Director may be used. Each business proposed to be passed by way of Resolution by circulation shall be explained by a note setting out the details of the proposal, relevant material facts that enable the Directors to understand the meaning, scope and implications of the proposal, the nature of concern or interest, if any, of any Director in the proposal, which the Director had earlier disclosed and the draft of the Resolution proposed. The note shall also indicate how a Director shall signify assent or dissent to the Resolution proposed and the date by which the Director shall respond. Not more than seven days from the date of circulation of the draft of the Resolution shall be given to the Directors to respond and the last date shall be computed accordingly. An additional two days shall be added for the service of the draft Resolution, in case the same has been sent by the company by speed post or by registered post or by courier. The provisions related to approval of resolution by circulation are as under: The Resolution is passed when it is approved by a majority of the Directors entitled to vote on the Resolution, unless not less than one-third of the total number of Directors for the time being require the Resolution under circulation to be decided at a Meeting. Interested Directors shall not be excluded for the purpose of determining the above one-third of the total number of Directors. However, an Interested Director shall not be entitled to vote on the resolution. In the present case, the Board comprises 9 Directors, of whom 3 Directors are interested in the proposed transaction. Accordingly, only 6 Directors are entitled to vote on the resolution. Since approval by a majority of the Directors entitled to vote is required, the resolution will be deemed to have been passed only if at least 4 out of the 6 non-interested Directors signify their assent within the prescribed period. Further, if not less than one-third of the total number of Directors, i.e. 3 Directors out of 9, require that the matter be considered at a Board Meeting, the resolution cannot be passed by circulation and must instead be placed before the Board at a duly convened meeting. The resolution, shall be deemed to have been passed on the earlier of the last date specified for signifying assent or dissent or the date on which assent has been received from the required majority. The resolution shall be effective from that date if no other effective date is specified in the resolution.