Secretarial Standard 1
Meeting of the Board of Directors
As per Section 118(10)
of The Companies Act, 2013, every company shall observe
Secretarial Standards with respect to General Meetings and Board Meetings
specified by the Institute of Company Secretaries of India constituted under Section
3 of the Company Secretaries Act, 1980, and approved as such by the Central
Government.
MCA has notified the Secretarial Standard
1 (Meeting of the Board of Directors) vide LetterNo.1/3/2014/CL/I dated 10th
Day of April 2015 which got effective form 1st day of July 2015.
Steps involved in convening Board Meeting (SS-1)
Notice
Frequency of Meeting
Quorum
Convening
Attendance Register
Passing of resolution
Adjournment
Minutes
Disclosure
Board/Committee Meeting (SS-1)
Applicability:
Applicable to the Meetings of Board of Directors & Meetings of Committee(s)
of the Board of all Companies Incorporated in India.
Exemption:
One Person Company (OPC) in which there is only one director on its Board.
Kindly note that the OPC having more than one director shall have to comply with
SS-1.
Authority:
a)
Without requisition of
Director: any director may convene the meeting.
b) With requisition of
Director: Company Secretary or
where there is no Company Secretary, any person authorized by the Board in this
behalf, on the requisition of a director, shall convene the meeting of the
Board in consultation with the Chairman.
Notice:
Circulate Notice of meeting
along with the Agenda and notes on Agenda at least 7 days before the
meeting to every director, including the alternate director and also to
original director to such alternate director. In case notice is sent by
courier, speed post or registered post, then 9 days’ notice must be
given.
In absence of/ unavailability
of address or e-mail id, than it should be sent to address appearing in
Directors Identification Number (DIN) registration of the Director.
Notice must contain the serial
number, day, date, time, and venue for the meeting.
Company Secretary or any
Director of a company or any person authorized by the Board in this behalf
shall issue the notice of meeting.
Proof of sending the
notice, Agenda and notes to Agenda and its delivery shall be maintained by the
Company.
The Notice shall specify the serial number, day, date, time and full address of the venue of the Meeting.
Each item of business to be taken up at the Meeting shall be serially numbered.
Notice must also contain the contact
number or email-address of the Chairman or CS or authorized
person, to whom the director shall confirm in advance of his presence in
the meeting.
If majority of directors give
their consent the meeting can be held by giving shorter notice. The fact that
meeting is being held at shorter notice shall be stated in the notice.
Supplementary notes on Agenda
items can be circulated at or prior to the meeting with the permission
of chairman.
No leave of absence
shall be given in case no such advance confirmation and or permission have been
seeked for absence.
Seek the permission of
the Chairman and consent of majority of the Directors present in the Meeting,
including at least one Independent Director, if any, for taking up the matter
not included in the Agenda. (Director should disclose his interest in Notes to Agenda)
Time, place, Mode and Serial No.
of Meeting
Every
meeting should have a serial number.
A
meeting of the Board/Committee or adjourned thereof shall not be held on
National holiday.
A
meeting of the Board/Committee may be held anywhere across the globe and may be
held at any time. Kindly note that no restriction imposed on venue and time for
conveying on conducting the meeting.
Meeting
through electronic mode:
Restricted
Agenda for e-participation in the Board meeting.
a)
Approval
of Annual financial Statement
b)
Board
report
c)
Prospectus
d)
Matter
relating to amalgamation, merger, takeover etc...
Restricted Agenda for Audit Committee
a)
Approval
of Annual financial Statement
Frequency of Meetings
First
Board meeting should be held within 30 days of the incorporation.
Meetings of the Board: 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.
One
person Company, Small Company and dormant company requires holding one meeting
in each half of a calendar year (Gap b/w two meetings is not less than 90 days.)
Meetings of Committees: Committees shall meet as
often as necessary subject to the minimum number and frequency stipulated by
the Board or as prescribed by any law or authority.
Meetings of
Independent Director: Where a company is required to appoint
Independent Directors under the Act, such Independent Directors shall meet at
least once in a Calendar Year.
Quorum
Quorum shall be
present throughout the Meeting. Quorum shall be present not only at the time of
commencement of the Meeting but also while transacting business.
Director
shall not be reckoned for Quorum in respect of an item in which he is
interested and he shall not be present, whether physically or through Electronic
Mode, during discussions and voting on such item.
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.
Meetings of the Board
1. The
Quorum for a Meeting of the Board shall be one-third of the total strength of
the Board (any fraction contained in that one-third being rounded off as one),
or two Directors, whichever is higher.
2. Where
the number of director is reduced below the minimum fixed by the Articles, no
business shall be transacted unless the number is first made up by the
remaining Director(s) or through a general meeting.
Meetings of Committees
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.
Attendance
Register
Prepare attendance register for separately
for Board and committee meetings containing serial number, date, time, place,
name of directors, invitees and Company Secretary along with their signatures.
Pages of attendance register shall have
serial number.
Check whether the attendance register is
signed at the meeting itself by the directors, invitees and Company Secretary,
and authenticated by the Company secretary or chairman (where there is no CS).
Attendance register shall be maintained at
the registered office of the company or at any place approved by the Board.
Chairman shall confirm the attendance of
the directors participating through electronic mode.
Only Director, PCS, Secretarial auditor,
Statutory Auditor can inspect the attendance registers.
Request for leave of absence must be
communicated to Company Secretary, if any, or chairman. The office of director
shall become vacant if director do not attend any of the board meeting held
during the period of 12 months or without seeking leave of absence of the
Board.
Attendance register shall be preserved for
a period of 8 financial years.
Chairman
Meetings
of the Board
1. The Chairman of the company shall be the Chairman
of the Board. If the company does not have a Chairman, the Directors may elect
one of themselves to be the Chairman of the Board.
2. The Chairman of the Board shall conduct the
Meetings of the Board. If no Chairman is elected or if the Chairman is unable
to attend the Meeting, the Directors present at the Meeting shall elect one of
themselves to chair and conduct the Meeting, unless otherwise provided in the
Articles
Meetings of Committees
A member of the Committee appointed by the Board or
elected by the Committee as Chairman of the Committee, in accordance with the
Act or any other law or the Articles, shall conduct the Meetings of the
Committee. If no Chairman has been so elected or if the elected Chairman is
unable to attend the Meeting, the Committee shall elect one of its members
present to chair and conduct the Meeting of the Committee, unless otherwise
provided in the Articles
Passing
of 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.
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.
A
Resolution proposed to be passed by circulation shall be sent in draft,
together with the necessary papers, individually to all the Directors including
Interested Directors on the same day.
The
draft of the Resolution to be passed and the necessary papers shall be
circulated amongst the Directors by hand, or by speed post or by registered
post or by courier, or by e-mail or by any other recognized electronic means.
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.
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.
The
Resolution, if passed, shall be deemed to have been passed on the last date
specified for signifying assent or dissent by the Directors or the date on
which assent from more than two-third of the Directors has been received,
whichever is earlier, and shall be effective from that date, if no other
effective date is specified in such Resolution.
Resolutions
passed by circulation shall be noted at the next Meeting of the Board and the
text thereof with dissent or abstention, if any, shall be recorded in the
Minutes of such Meeting.
Passing of Resolution by circulation shall
be considered valid as if it had been passed at a duly convened Meeting of the
Board.
Minutes
Maintenance
of Minutes
Minutes
shall be recorded in books maintained for that purpose.
A
distinct Minutes Book shall be maintained for Meetings of the Board and each of
its Committees.
Minutes
may be maintained in electronic form in such manner as prescribed under the Act
and as may be decided by the Board. Minutes in electronic form shall be
maintained with Timestamp.
The
pages of the Minutes Books shall be consecutively numbered.
Minutes
shall not be pasted or attached to the Minutes Book, or tampered with in any
manner.
Minutes
of the Board Meetings, if maintained in loose-leaf form, shall be bound
periodically depending on the size and volume coinciding with one or more
financial years of the Company.
Minutes of the Board Meeting shall be kept at
the Registered Office of the company or at such other place as may be approved
by the Board.
Content of 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 and conclusion of the
Meeting.
Minutes
shall record the names of the Directors present physically or through Electronic
Mode, the Company Secretary who is in attendance at the Meeting and Invitees,
if any, including Invitees for specific items.
The
names of the Directors shall be listed in alphabetical order or in any other
logical manner, but in either case starting with the name of the person in the
Chair.
Minutes
shall contain a record of all appointments made at the Meeting.
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. All appointments made one level below Key
Managerial Personnel shall be noted.
Specific Contents
Record
of election, if any, of the Chairman of the meeting.
Record
of presence of Quorum.
The
names of Directors who sought and were granted leave of absence.
The mode of attendance of
every Director whether physically or through Electronic Mode.
In case of a Director
participating through Electronic Mode, his particulars, the location from where
and the Agenda items in which he participated.
The name of Company
Secretary who is in the attendance and invitees if any, for specific items and
mode of their attendance if through Electronic Mode.
Noting of the
Minutes of the preceding Meeting.
Noting of the
Minutes of the Meetings of the Committees.
The text of the
Resolution(s) passed by the circulation since the last meeting, including
dissent or abstention, if any.
The fact that an
interested Director was not present during the discussion and did not vote.
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.
If
any director has participated only for a part of the meeting, the Agenda items
in which he did not participate should be clearly specified.
The fact of the dissent
and the name of the Director who dissented from the Resolution or abstained
from voting thereon.
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.
The
time of commencement and conclusion of the Meeting.
Apart
from the Resolution or the decision, Minutes shall mention the brief background
of all proposals and summarize the deliberations thereof. In case of major
decisions, the rationale thereof shall also be mentioned.
The
decisions shall be recorded in the form of Resolutions, where it is statutorily
or otherwise required. In other cases, the decisions can be recorded in a
narrative form.
Where a Resolution was passed pursuant to the Chairman of the
Meeting exercising his second or casting vote, the Minutes shall record such
fact.
Recording of Minutes
Minutes shall contain a
fair and correct summary of the proceedings of the Meeting.
Minutes shall be written
in clear, concise and plain language.
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.
Minutes
shall be written in third person and past tense; however resolution shall be in
present tense.
Where
any earlier Resolution (s) or decision is superseded or modified, Minutes shall
contain a reference to such earlier Resolution (s) or decision.
Minutes of the preceding
Meeting shall be noted at a Meeting of the Board held immediately following the
date of entry of such Minutes in the Minutes Book.
The CS shall record proceedings of the meetings. If
there is no CS any person authorized by Board or Chairman shall record the
proceedings.
Finalisation of Minutes
Draft minutes shall be circulated within 15 days from the
date of conclusion of the meeting of Board or Committee.
Proof of sending the draft minutes and its delivery
shall be maintained by the Company.
The Directors (whether present or not) shall
communicate their comments in writing on the draft minutes within 7 days.
The
minutes shall be finalized and entered into minutes book within 30 days.
Signing of
Minutes
Minutes shall be signed
and dated by the Chairman of the Meeting or Chairman of the Next Meeting.
The Chairman shall
initial each page of the Minutes, sign the last page and append to such
signature the date on which and the place where he has signed the Minutes.
Minutes once signed shall
not be altered.
A copy of the 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
Directors within fifteen days after these are signed.
Inspection
and extraction of Minutes
A director is entitled to
inspect the minutes of a meeting held before his directorship.
A director is entitled to inspect the
minutes of a meeting held even after he ceases to be a director.
Extract of the minutes shall be given only
after the minutes have been duly entered in the minutes book, however certified
true copies of the resolution may be issued even earlier.
Preservation of
Minutes and other record
Minutes of all the meetings shall be
preserved permanently in physical or electronic form with Timestamp.
Office copy of the notice, agenda, notes
on agenda, and other related paper shall be preserved for as long as they
remain current or for 8 (eight) years, whichever is later. It may be destroyed
with the approval of the Board. (and permission of central government wherever
necessary.)
Disclosure
The Annual Report and Annual Return of a
company shall disclose the number and dates of Meetings of the Board and
Committees held during the financial year indicating the number of Meetings
attended by each Director.
*This
is merely a checklist; please refer the Secretarial Standards issued by ICSI
for more clarification.
No comments:
Post a Comment