MUST TO
KNOW:-
SS-1 have now been revised by
ICSI & the same have been approved by Ministry of Corporate Affairs (MCA)
vide its letter no.1/3/2014 CL.I dated 14th June, 2017.This revised standard shall be applicable to
all companies except exempt class of companies with effect from 1st
October, 2017 and accordingly all Board meetings including Committee meetings
in respect of which notices have been issued on or after 1st
October, 2017 need to comply with the revised SS-1.
CHANGES AS
COMPARE TO PREVIOUS STANDARD
SCOPE
This Standard is applicable to the Meetings of Board of
Directors of all companies incorporated under the Act except One Person Company
(OPC) in which there is only one Director on its Board and a company licensed
under Section 8 of the Companies Act, 2013 or corresponding provisions of any
previous enactment thereof. However, Section 8 companies need to comply with
the applicable provisions of the Act relating to Board Meetings.(Scope)
Interpretation :- Now this standard is not applicable
to companies licensed under section 8 of Companies Act, 2013 or section 25 of Companies Act, 1956.(Limiting
the scope)
DEFINITIONS
“Committee”
means a Committee of directors mandatorily required to be constituted by the
Board under the Act.
Interpretation :- Reworded for more clarifications.
“Secretarial
Auditor” means a Company
Secretary in Practice or a firm of Company Secretary(ies) in Practice
appointed in pursuance of the Act to conduct the secretarial audit of the
company
Interpretation
:- To include firm of Company
Secretaries into definition of Secretarial
auditor.
CONVENING A MEETING
A Meeting may be convened at any time and place, on any day.(refer
to 1.2.2 of SS-1)
Interpretation:-
Now a Board Meeting can be convened even on National Holiday.
Directors shall not participate through Electronic Mode in
the discussion on certain restricted items. Such restricted items of business
include approval of the annual financial statement, Board’s report, prospectus
and matters relating to amalgamation, merger, demerger, acquisition and
takeover. Similarly, participation in the discussion through Electronic Mode
shall not be allowed in Meetings of the Audit Committee for consideration of
annual financial statement including consolidated financial statement, if any,
to be approved by the Board(refer to 1.2.3)
Interpretation:- The Lines “unless
permitted by chairman” removed from above paragraph to prohibit participation
of director through electronic mode on certain items even if permission is
granted by chairman.
Where a Director specifies a particular means of delivery of
Notice, the Notice shall be given to him by such means. However, in case of a Meeting
conducted at a shorter Notice, the company may choose an expedient mode of
sending Notice. Proof of sending Notice and its delivery shall be maintained by
the company for such period as decided by the Board, which shall not be less
than three years from the date of the Meeting (refer to paragraph 2 of 1.3.1).
Interpretation:- Reworded to make some clarifications regarding
“Means of delivery of notice in case of
shorter notice” & in addition to this a new time period (3 year) is also introduced for minimum
preservation of proof of sending notice.
The Notice shall inform the Directors about the
option available to them to participate through Electronic Mode and
provide them all the necessary information. If a Director
intends to participate through Electronic Mode, he shall give sufficient
prior intimation to the Chairman or the Company Secretary to enable them to
make suitable arrangements in this behalf. The Director may intimate
his intention of participation through Electronic Mode at the beginning
of the Calendar Year also, which shall be valid for such Calendar Year (refer
to 1.3.4).
Interpretation:- Now a clear duty of Director “To give prior intimation to
chairman or CS about availing such facility introduced and now he/she can also
intimate at the beginning of the calendar year which shall be valid for such
calendar year .
Where a Director specifies a particular means of delivery of
Agenda and Notes on Agenda, these papers shall be sent to him by such
means. However, in case of a Meeting conducted at a shorter Notice, the
company may choose an expedient mode of sending Agenda and Notes on Agenda (
refer to 1.3.7 para 4)
Interpretation:- More clarity towards “means of delivery of Agenda” in
case of shorter notice.
Proof of sending Agenda and Notes on Agenda and their
delivery shall be maintained by the company for such period as decided by
the Board, which shall not be less than three years from the date of the
Meeting ( refer to 1.3.7 para 5)
Interpretation:- A new Time period of 3 year is introduced for minimum
preservation of proof.
The Notice, Agenda and Notes on Agenda shall be sent to the
Original Director also at the address registered with the company, even if
these have been sent to the Alternate Director. However, the mode of
sending Notice, Agenda and Notes on Agenda to the original director shall be
decided by the company. (refer to 1.3.7 para 6)
Interpretation:- More
clarification as this area was not touched earlier.
Where approval by means of a Resolution is required, the
draft of such Resolution shall be either set out in the note or placed at the
Meeting. However, any other decision taken at the Meeting may also be
recorded in the Minutes in the form of Resolution.(refer to 1.3.8 para 2)
Interpretation:- A new condition
“To record any other decision taken at
the meeting in Minutes in form of
Resolution”.
The decision taken in respect of any
other item shall be final only on its ratification by a majority
of the Directors of the company, unless such item was approved at the Meeting
itself by a majority of Directors of the company(refer to 1.3.10 para 2).
Interpretation:- Inclusion of Independent director in “Majority of the Directors” were removed
which results in more convenience to take any decision.
FREQUENCY OF
MEETINGS
The company shall hold at least four Meetings of
its Board in each Calendar Year with a maximum interval of one
hundred and twenty days between any two consecutive Meetings. The company
shall hold first Meeting of its Board within thirty days of the
date of incorporation. It shall be sufficient if subsequent Meetings are
held with a maximum interval of one hundred and twenty days between any
two consecutive Meetings.(refer
to 2.1)
Interpretation:- Need to conduct
Board Meeting at every quarter is now removed.
Committees shall meet as often as necessary subject to the
minimum number and frequency prescribed by any law
or any authority or as stipulated by the Board.(refer to 2.2)
Interpretation:- Reworded
The Company Secretary, wherever appointed, shall
facilitate convening and holding of such Meeting, if so desired by the
Independent Directors.(refer to 2.3)
Interpretation:- Reworded
QUORUM
A Director shall neither be reckoned for Quorum nor
shall be entitled to participate in respect of an item of
business in which he is interested. However, in case of a private
company, a Director shall be entitled to participate in respect of such
item after disclosure of his interest. For this purpose, a Director shall
be treated as interested in a contract or arrangement entered into or proposed
to be entered into by the company.(a) with the Director himself or his
relative; or(b) with any body corporate, if such Director, along with other
Directors holds more than two percent of the paid-up share capital of that body
corporate, or he is a promoter, or manager or chief executive officer of that
body corporate; or(c) with a firm or other entity, if such Director is a
partner, owner or Member, as the case may be, of that firm or other entity. If
the item of business is a related party transaction, then he shall not be
present at the Meeting, whether physically or through Electronic Mode, during
discussions and voting on such item (refer to 3.1 & 3.2)
Interpretation:- Exemption to Private Company is Introduced.
Directors participating through Electronic Mode in a Meeting
shall be counted for the purpose of Quorum, unless they are to be excluded for
any items of business under the provisions of the Act or any other law.(refer
to 3.3)
Interpretation :- Reworded to make it more clear as now Director cannot
participate even with permission of chairman .
Unless otherwise stipulated in the Act or the Articles or under
any other law, the Quorum for Meetings of any Committee constituted by the
Board shall be as specified by the Board. If no such Quorum is specified, the
presence of all the members of any such Committee is necessary to form the
Quorum.(refer to 3.5)
Interpretation:- Language changed for more clarity.
ATTENDANCE AT
MEETINGS
If an attendance register is maintained in loose-leaf form,
it shall be bound periodically, atleast once in every three years.(refer
to 4.1.1 para 3)
Interpretation:- New time limit
is introduced
The attendance register shall contain the following
particulars: serial number and date of the Meeting; in case of a Committee
Meeting name of the Committee; place of the Meeting; time of the Meeting;
names and signatures of the Directors, the Company Secretary and also
of persons attending the Meeting by invitation and their mode of presence,
if participating through Electronic Mode.(refer to 4.1.2)
Interpretation:- Now mode of
presence is also added in attendance register.
The attendance register shall be deemed to have been signed
by the Directors participating through Electronic Mode, if their attendance is
recorded in the attendance register and authenticated by the Company Secretary
or where there is no Company Secretary, by the Chairman or by any other
Director present at the Meeting, if so authorized by the Chairman and the fact
of such participation is also recorded in the Minutes.(refer to 4.1.3)
Interpretation:- Now any other director if so authorized by the chairman
can also authenticate the attendance.
The attendance register is open for inspection by the
Directors. Even after a person ceases to be a Director, he shall be entitled to
inspect the attendance register of the Meetings held during the period of his
Directorship.(refer to 4.1.5)
Interpretation:- Now a person even after cessation from his directorship can inspect the
attendance register (Only for that specific duration of his tenure).
The attendance register shall be preserved for a period of at
least eight financial years from the date of last entry made therein and may be
destroyed thereafter with the approval of the Board.(refer to 4.1.7)
Interpretation:- Now the date from
which attendance register can
be preserved for 8 years is introduced
Leave of absence shall be granted to a Director only when a
request for such leave has been communicated to the Company Secretary
or to the Chairman or to any other person authorized by the
Board to issue Notice of the Meeting.(refer to 4.2)
Interpretation:- Reworded to make
some clarification regarding leave of absence & added a person authorized
by Board to accept leave of absence.
CHAIRMAN
If the Chairman is interested in an item of business, he
shall entrust the conduct of the proceedings in respect of such item to any
Non-Interested Director with the consent of the majority of Directors
present and resume the chair after that item of business has been
transacted. However, in case of a private company, the Chairman may
continue to chair and participate in the Meeting after disclosure of his
interest. (refer to 5.1.2 para 3)
Interpretation:- Reworded to make some clarification regarding
entrusting any other director to conduct proceedings in case of chairman is interested in an item of business & in
addition to this Private Company were exempted to comply this compliance.
The Chairman shall ensure that the required Quorum is present
throughout the Meeting and at the end of discussion on each agenda item the
Chairman shall announce the summary of the decision taken thereon.(refer to
5.1.2 para 6)
Interpretation:- Newly inserted
paragraph to make onus upon chairman to ensure required quorum present
throughout the meeting.
PASSING OF
RESOLUTION BY CIRCULATION
The Chairman of the Board or in his absence, the Managing Director or
in their absence, any Director other than an Interested Director, shall
decide, before the draft Resolution is circulated to all the Directors, whether
the approval of the Board for a particular business shall be obtained by means
of a Resolution by circulation.(refer to 6.1)
Interpretation:- Reworded to remove Whole time director for some
convenience.
Proof of sending and delivery of the draft of the Resolution
and the necessary papers shall be maintained by the company for such period as
decided by the Board, which shall not be less than three years from the date of
the Meeting.(refer to 6.2 para 3)
Interpretation:- New time period introduced 3 years.
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.(refer to 6.2 para 5)
Interpretation:- Newly Inserted paragraph for relaxation.
The Resolution, if passed, shall be deemed to have been
passed on the earlier of: a) the last
date specified for signifying assent or dissent by the Directors, or b) the
date on which assent has been received from the required majority,
provided that on that date the number of Directors, who have not yet responded
on the resolution under circulation, along with the Directors who have
expressed their desire that the resolution under circulation be decided at a
Meeting of the Board, shall not be one third or more of the total number of
Directors; and shall be effective from that
date, if no other effective date is
specified in such resolution.(refer to 6.3.2)
Interpretation:- Language changed
to make some convenience in respect of passing of resolution.
Resolutions passed by circulation shall be noted at a
subsequent Meeting of the Board and the text thereof with dissent or
abstention, if any, shall be recorded in the Minutes of such Meeting.(refer to
6.4)
Interpretation:- No need to record the fact that interested director did
not vote on resolution.
MINUTES
minutes shall state, at the beginning the serial number and
type of the Meeting, name of the company, day, date, venue
and time of commencement of the Meeting. In respect of a Meeting
adjourned for want of Quorum, a statement to that effect by the Chairman or in
his absence, by any other Director present at the Meeting shall be recorded in
the Minutes.(refer to 7.2)
Interpretation :- Language changed
Where the Minutes have been kept in accordance with the Act
and all appointments have been recorded, then until the contrary is proved, all
appointments of Directors, First Auditors, Key Managerial Personnel,
Secretarial Auditors, Internal Auditors and Cost Auditors, shall be deemed to
have been duly approved by the Board.(refer to 7.2.1.3)
Interpretation:- Now no need to note appointments of one level below KMP
by Board.
Specific Contents: a) The name(S) of Directors Present and
their mode of attendance, if through Electronic Mode. b) In case of a Director
participating through Electronic Mode, his particulars, the location from where
he participated and wherever required, his consent to sign the statutory
registers placed at the Meeting. c) The name of Company Secretary who is in
attendance and Invitees, if any, for specific items and mode of their
attendance if through Electronic Mode. d) Record of election, if any, of the
Chairman of the Meeting. e) Record of presence of Quorum. f) The names of
Directors who sought and were granted leave of absence. g) Noting of the
Minutes of the preceding Meeting. h) Noting the Minutes of the Meetings of the
Committees. i) The text of the Resolution(s) passed by circulation since the
last Meeting, including dissent or abstention, if any. j) The fact that an
Interested Director did not participate in the discussions and did not vote on
item of business in which he was interested and in case of a related party
transaction such director was not present in the meeting during discussions and
voting on such item. k) The views of the Directors particularly the Independent
Director, if specifically insisted upon by such Directors, provided these, in
the opinion of the Chairman, are not defamatory of any person, not irrelevant
or immaterial to the proceedings or not detrimental to the interests of the
company. l) If any Director has participated only for a part of the Meeting,
the Agenda items in which he did not participate. m) The fact of the dissent
and the name of the Director who dissented from the Resolution or abstained
from voting thereon. n) Ratification by Independent Director or majority of
Directors, as the case may be, in case of Meetings held at a shorter Notice. o)
Consideration of any item other than
those included in the Agenda with the consent of majority of the Directors
present at the Meeting and ratification of the decision taken in respect of
such item by a majority of Directors of the company. p) The time of
commencement and conclusion of the Meeting.
Interpretation:- A new content is introduced in content of minutes
i.e point (o)
Where any earlier Resolution(s) or decision is superseded or
modified, Minutes shall contain a specific reference to such earlier
Resolution(s) or decision or state that the Resolution is in supersession of
all earlier Resolutions passed in that regard.
Interpretation: Language changed
Within fifteen days from the date of the conclusion of the
Meeting of the Board or the Committee, the draft Minutes thereof shall be
circulated by hand or by speed post or by registered post or by courier or by
e-mail or by any other recognized electronic means to all the members of the
Board or the Committee, as on the date of the Meeting, for their comments.(refer
to 7.4)
Interpretation:- Now circulation to only those who were members as on
date of meeting
Proof of sending draft Minutes and its delivery shall be
maintained by the company for such period as decided by the Board, which
shall not be less than three years from the date of the Meeting.(refer to 7.4
para 4)
Interpretation:- New time period of 3 years is introduced.
Minutes, once entered in the Minutes Book, shall not be
altered. Any alteration in the Minutes as entered shall be made only by way of
express approval of the Board at its subsequent
Meeting at which the Minutes are noted by the Board
and the fact of such alteration shall be recorded in the Minutes of
such subsequent Meeting.(refer to 7.5.3)
Interpretation:- Now alteration of minutes shall also be recorded in the
minutes of such subsequent meeting.
.
Within fifteen days of signing of the Minutes, a copy of
the said signed Minutes, certified by the Company Secretary or where
there is no Company Secretary by any Director authorized by the Board, shall be
circulated to all the Directors, as on the date of the Meeting
and appointed thereafter, except to those Directors who have waived their right
to receive the same either in writing or such waiver is recorded in the Minutes
Proof of sending signed Minutes and its delivery shall be maintained
by the company for such period as decided by the Board, which shall not be less
than three years from the date of the Meeting.
Interpretation :- Reworded to make circulation of signed minutes only to
those directors as on date of meeting & appointed thereafter except to those who have waived their
right and a minimum time period of 3
year is introduced.
DISCLOSURE
The Report of the Board of Directors shall include a
statement on compliances of applicable Secretarial Standards(refer to 9)
Interpretation:- No need of disclosure in Annual report & Annual
return of the Company about
no. of meetings and dates of meetings held during F.Y indicating No. of
meetings attended by each Director.
By:- KUNAL SHARMA
Management Trainee
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