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Top Fifty Points on Secretarial Standard on Meetings of The Board of Directors.

In terms of the requirement of section 118 of the Companies Act 2013, every company is required to comply with the Secretarial Standards issued by ICSI with the approval of the Central Government. In the said respect, ICSI has issued a Secretarial Standards on board meetings (SS-1) and general meetings (SS-2).

In order to provide a crisp view of the SS-1, we have summarized below the top fifty points which we feel are important and necessary for an overall understanding.

Pre Board Meeting or Meetings of Committee(s) Procedures

A meeting can’t be called on a national holiday (1.2.2)
Notice in writing of every meeting shall be given to every director by hand or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means. Section 173 provides for sending the notice through post or electronic mode (1.3.1)
In case the director has not provided any address, the notice shall be sent to addresses appearing in the Director Identification Number (DIN) registration. (Expl. 1.3.1)
Notice shall be issued by the company secretary or where there is no company secretary, any Director or any other person authorised by the Board for the purpose. (1.3.2)
In case the company provides facility of video conferencing then the note should contain contact number or email id of the chairman or the company secretary or any other authorized person (Expl. 1.3.4)
The agenda, setting out the business to be transacted at the meeting, and notes on agenda shall be given to the Directors at least seven days before the date of the Meeting, unless the Articles prescribe a longer period. (1.3.7)
In case the company sends the notice by speed post or by registered post or by courier, an additional two days shall be added for the service of Notice. Same is applicable in case of agenda or notes to the agenda, if send by speed post or by registered post or by courier. In such case the notice should be send atleast nine days before the date of the meeting. (Expl. 1.3.7)
To transact urgent business, the notice, agenda and notes on agenda may be given at shorter period of time than stated than a period of at least seven days before the date of the Meeting, or the period as may be prescribed in the Articles of the Company, if at least one Independent Director, if any, shall be present at such Meeting.

If no Independent Director is present, decisions taken at such a Meeting shall be circulated to all the Directors and shall be final only on ratification thereof by at least one Independent Director, if any. In case there is no Independent Director, the decisions shall be final only on ratification thereof by a majority of the Directors of the company, unless such decisions were approved at the Meeting itself by a majority of Directors of the company. It is important to note that approval of majority of directors of the company is not required and not majority of directors in present in the meeting. (1.3.11)
Notes on items of business which are in the nature of unpublished price sensitive information may be given at a shorter period of time than a period of at least seven days before the date of the Meeting, with the consent of a majority of the Directors, which shall include at least one Independent Director, if any. (Expl. 1.3.7)
General consent can be in taken in the first board meeting of the financial year for providing Notes on items of Agenda which are in the nature of Unpublished Price Sensitive Information at a shorter Notice. Such consent shall also be taken afresh whenever there is any change in Directors. In case the consent is not taken as such then it would be required to be taken at the meeting. . (Expl. 1.3.7)
Supplementary Notes on any of the Agenda Items may be circulated at or prior to the Meeting but shall be taken up with the permission of the Chairman and with the consent of a majority of the Directors present in the Meeting, which shall include at least one Independent Director, if any. (Expl. 1.3.7)
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. (Expl. 1.3.8)
Each item of business to be taken up at the Meeting shall be serially numbered. Either it can be consecutive numbering to be followed for each meeting or it can be fresh numbering for each meeting. (1.3.9)
The Board shall meet at least once in every calendar quarter, with a maximum interval of one hundred and twenty days between any two consecutive Meetings of the Board, such that at least four Meetings are held in each Calendar Year.

An adjourned Meeting being a continuation of the original Meeting, the interval period in such a case, shall be counted from the date of the original Meeting. As per section 173 atleast four board meeting should be held each year there is no mandatory requirement of holding a meeting every quarter. (2.1 and Expl.2.1)
Every company shall maintain separate attendance registers for the Meetings of the Board and Meetings of the Committee.(4.1.1)
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 of the Directors and signature of each Director present; name and signature of the Company Secretary who is in attendance and also of persons attending the Meeting by invitation.(4.1.2)
Entries in the attendance register shall be authenticated by the Company Secretary or where there is no Company Secretary, by the Chairman by appending his signature to each page and it shall be preserved for at least eight financial years and may be destroyed thereafter with the approval of the Board.(4.1.6 and 4.1.7)
Leave of absence shall be granted to a Director only when a request for such leave has been received by the Company Secretary or by the Chairman. (4.2)

Conduct of Board Meeting or Meetings of Committee(s)

The Chairman may, unless dissented to or objected by the majority of Directors present at a Meeting at which a Quorum is present, adjourn the Meeting for any reason, at any stage of the Meeting. (1.1.2)
Directors shall not participate through Electronic Mode in the discussion on certain restricted items, unless expressly permitted by the Chairman. Under the Companies Act 2013 (‘the Act’), such participation is expressly prohibited even with the permission of the chairman. (Expl. 1.2.3)
In audit committee, participation in the discussion through Electronic Mode shall not be allowed for consideration of annual financial statement including consolidated financial statement, if any, to be approved by the Board , unless expressly permitted by the Chairman (Expl. 1.2.3)
Any item not included in the Agenda may be taken up for consideration with the permission of the Chairman and with the consent of a majority of the Directors present in the Meeting, which shall include at least one Independent Director, if any.(1.3.10)

In absence of Independent Directors, if any, at such Meeting, the Minutes shall be final only after at least one Independent Director, if any, ratifies the decision taken in respect of such item. (Expl.1.3.10)

In case there is no Independent Director, the Minutes shall be final only on ratification of the decision taken in respect of such item 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. It is important to note that approval of majority of directors of the company is not required and not majority of directors in present in the meeting. (Expl.1.3.10)
A director shall be deemed interested in contract or arrangement to be entered into with any firm or other entity, if such Director or his relative is a partner, owner or Member, as the case may be, of that firm or other entity. Under Section 184, the relatives are not covered under this category.(Expl. 3.2)
In case any director attending a meeting through video conferencing participates in matter in which he is not allowed to participate, with the permission of the chairman, he will not be counted in quorum and he can’t vote on such matter. (Expl. 3.3)
The presence of all the members of any committee constituted by the board is necessary to form the quorum for meetings of such committee unless otherwise stipulated in the Act or any other law or the Articles or by the Board. (3.5)

Resolution by Circulation:

The chairman of the Board or in his absence, the managing director or in his absence, the whole-time director and where there is none, 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. (6.1.1)
Where 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, the chairman shall put the resolution for consideration at a meeting of the Board. (6.1.2)
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. (6.2.3)
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.(Expl.6.2.3)
The standards provides detailed procedure for passing the resolution by circulation. (6.2)

Post Board Meeting or Meetings of Committee(s) Procedures

A company may maintain its Minutes in physical or in electronic form with Timestamp.(Expl.7.1.3)
The pages of minutes book shall be consecutively numbered irrespective of break in the book arising due to periodical binding. (7.1.4 and Expl.7.1.4)
Loose minutes leaves shall kept in a proper locking device to ensure security and proper control to prevent removal or manipulation.(Expl.7.1.6)
Among other things, the minutes shall state, at the beginning the time of commencement and conclusion of the Meeting. (7.2.1.1)
While mentioning the names of directors present in the meeting, the name of person in chair shall come first.(Expl.7.2.1.2)
If any Director has participated only for a part of the Meeting, the Agenda items in which he did not participate shall be mentioned in the minutes. {7.2.2.1 (l)}
The fact of the dissent and the name of the Director who dissented from the Resolution or abstained from voting thereon shall be mentioned in the minutes. {7.2.2.1 (m)}
Fact of ratification by Independent Director or majority of Directors, as the case may be, in case of Meetings held at a shorter Notice and the transacting of any item other than those included in the Agenda shall be mentioned in the minutes. {7.2.2.1 (n)}
Apart from the Resolution or the decision, Minutes shall mention the brief background of all proposals and summarise the deliberations thereof. In case of major decisions, the rationale thereof shall also be mentioned. (7.2.2.2)
The fact of consent having been taken for circulating notes to agenda which are in the nature of Unpublished Price Sensitive Information at a shorter notice shall be recorded in the Minutes. (Expl. 1.3.7)
Text of the resolution passed through circulation along with dissent or abstention, if any, shall be recorded in the minutes. {7.2.2.1 (i)}
Any document, report or notes placed before the Board and referred to in the Minutes shall be identified by initialing of such document, report or notes by the Company Secretary or the Chairman. (7.3.3)
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 recognised electronic means to all the members of the Board or the Committee for their comments. If the draft Minutes are sent by speed post or by registered post or by courier, an additional two days may be added for delivery of the draft Minutes.(7.4 and Expl.7.4)
The directors, whether present at the meeting or not, shall communicate their comments, if any, in writing on the draft minutes within seven days from the date of circulation thereof, so that the Minutes are finalised and entered in the Minutes Book within the specified time limit of thirty days.(Expl.7.4)
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 in which such minutes are sought to be altered.(7.5.3)
Minutes shall contain two date i.e. date of entering in the minute book and date of signing by the chairman. (7.5.2. and 7.6.1)
Office copies of notices, agenda, notes on agenda and other related papers shall be preserved in good order in physical or in electronic form for as long as they remain current or for eight financial years, whichever is later and may be destroyed thereafter with the approval of the Board.(8.2)
Where, under a scheme of arrangement, a company has been merged or amalgamated with another company, Minutes of all Meetings of the transferor company, as handed over to the transferee company, shall be preserved permanently by the transferee company, notwithstanding that the transferor company might have been dissolved.(Expl.8.1)
A Director is entitled to inspect the Minutes of a Meeting held before the period of his Directorship.(Expl.7.7.1)
A Director is entitled to inspect the Minutes of the Meetings held during the period of his Directorship, even after he ceases to be a Director.(Expl.7.7.1)

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