Key Changes / Clarification / new requirements under Secretarial Standard 1 & 2

Sending Notice, Agenda, Resolution by Circulation and Minutes of Board Meeting under SS-1-Secretarial Standard on Meetings of Board of Directors

♣ NOTICE – The Notice shall specify the serial number, day, date, time and full address of the venue of the Meeting.

♣  AGENDA- To send Agenda to the Directors at least seven days before the date of the Meeting, unless the Articles prescribe a longer period. [Notes on items of business which are in the nature of Unpublished Price Sensitive Information may be given at a shorter period of time than stated above, with the consent of a majority of the Directors, which shall include at least one Independent Director, if any. (such consent many be obtained at the beginning of financial year)]

In order to take the matter for discussion which was not there in Agenda – It may be takenup 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.

♣  RESOLUTION BY CIRCULATION – 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.

Every such Resolution shall carry a serial number.

♣  FINALISATION OF MINUTES- 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 to all the members of the Board or the Committee for their comments.

♣  SIGNED MINUTES CIRCULATION – A copy of the signed Minutes certified by the Company Secretary or where there is no Company Secretary, by any Director authorised by the Board shall be circulated to all Directors within fifteen days after these are signed.

♣  MODE OF SENDING –To send Agenda, Notice and Minutes by hand or by speed post or by registered post or by courier or by e-mail or by any other electronic means (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)

♣  Proof of sending Notice, Agenda and Minutes and its delivery shall be maintained by the company.

Clarity with respect to certain provisions of the Act:

♣  FOR PARTICIPATION THROUGH VIDEO CONFERENCE – Directors shall not participate through Electronic Mode in the discussion on certain restricted items, unless expressly permitted by the Chairman. 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, unless expressly permitted by the Chairman. (The Companies Act, 2013 restricts participation through video-conference for such items.)

♣  RATIFICATION BY MAJORITY OF DIRECTORS IF NO INDEPENDENT DIRECTOR IS THERE FOR SHORTER NOTICE, AGENDA – To transact urgent business, the Notice, Agenda and Notes on Agenda may be given at shorter period of time than stated above, 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 the company does not have an 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.

♣  IN CASE THE COMPANY IS INCORPORATE IN BETWEEN A YEAR – The Board shall hold its first Meeting within thirty days of the date of incorporation of the company. It shall be sufficient if one Meeting is held in each of the remaining calendar quarters, subject to a maximum interval of one hundred and twenty days between any two consecutive Meetings of the Board, after the first Meeting.

♣  INDEPENDENT DIRECTORS MEETING – Where a company is required to appoint Independent Directors under the Act, such Independent Directors shall meet at least once in a Calendar Year. Now the Company Secretary shall facilitate convening and holding of such meeting, if so desired by the Independent Directors. (though Section 205 of the Companies Act,2013 also prescribes duties of CS to include facilitate convening Board or Committee Meetings)

♣  The Notice shall also contain the contact number or e-mail address (es) of the Chairman or the Company Secretary or any other person authorised by the Board, to whom the Director shall confirm in this regard. (The Companies Act,2013 permits such option of confirmation to Chairperson or CS only)

Few other requirements –

• A Meeting may be convened at any time and place, on any day, excluding a National Holiday.
• 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.
• Maintenance of separate attendance registers for the Meetings of the Board and Meetings of the Committee.
• Every Director, Company Secretary who is in attendance and every Invitee who attends a Meeting of the Board or Committee thereof shall sign the attendance register at that Meeting.
• The attendance register is open for inspection by the Directors
• 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
• To be maintained for 8 years
• PRESERVATION OF SUPPORTING PAPERS – 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.
• MAINTENANCE OF MINUTES- A company may maintain its Minutes in physical or in electronic form with Timestamp. Timestamp is mandatory for electronic form.

“Timestamp” means the current time of an event that is recorded by a Secured Computer System and is used to describe the time that is printed to a file or other location to help keep track of when data is added, removed, sent or received.

Key Changes / Clarification / new requirement under Secretarial Standard-2 (SS-2) on General Meetings

Notice, Postal Ballot etc.

• Notice shall also be given to the Secretarial Auditor, to Debenture Trustees, if any, and, wherever applicable or so required, to other specified persons. (The Companies Act, 2013 does not prescribes so)

• Notice shall be sent by hand or by ordinary post or by speed post or by registered post or by courier or by facsimile or by e-mail or by any other electronic means. (The Companies Act, 2013 prescribes notice in writing and electronic means only)

• In all cases relating to the appointment or re-appointment and/or fixation of remuneration of Directors including Managing Director or Executive Director or Whole – time Director or of Manager or variation of the terms of remuneration, details of each such Director or Manager, including age, qualifications, experience, terms and conditions of appointment or re-appointment along with details of remuneration sought to be paid and the remuneration last drawn by such person, if applicable, date of first appointment on the Board, shareholding in the company, relationship with other Directors, Manager and other Key Managerial Personnel of the company, the number of Meetings of the Board attended during the year and other Directorships, Membership/ Chairmanship of Committees of other Boards shall be given in the explanatory statement.

• Further in case the company sends the Notice by post or courier, an additional two days shall be provided for the service of Notice. (The Companies Act, 2013 prescribes such addition only in case of ordinary post)

• No business shall be transacted at a Meeting if Notice in accordance with this Standard has not been given.

• No items of business other than those specified in the Notice and those specifically permitted under the Act shall be taken up at the Meeting.

• The Chairman shall explain the objective and implications of the Resolutions before they are put to vote at the Meeting

Attendance at the Meetings :

• If any Director is unable to attend the Meeting, the Chairman shall explain such absence at the Meeting.

• Directors who attend General Meetings of the company and the Company Secretary shall be seated with the Chairman.

• Secretarial Auditor to attend Meeting

Proxy :

• The Act requires that a Proxy can act on behalf of Members not exceeding fifty and holding in the aggregate not more than ten percent of the total share capital of the company carrying Voting Rights.

            However, a Member holding more than ten percent of the total share capital of the            company carrying Voting Rights may appoint a single person as Proxy for his entire    shareholding and such person shall not act as a Proxy for another person or shareholder.

            If a Proxy is appointed for more than fifty Members, he shall choose any fifty Members and confirm the same to the company before the commencement of specified period for inspection. In case, the Proxy fails to do so, the company shall consider only the first fifty proxies received as valid.

E-Voting

• The Companies which provides e-voting, shall also put every Resolution to vote through a ballot process at the Meeting.
• The Agency for e-voting shall be appointed by Board only. (The Companies Act does not prescribes so)

Ban on Gifts

No gifts, gift coupons, or cash in lieu of gifts shall be distributed to Members at or in connection with the Meeting.

Clarification

• Companies whose equity shares are listed on SME Exchange or on the Institutional Trading Platform are not required to provide e-voting facility.

• In case of companies having a website, Notice of the postal ballot shall also be placed on the website. (The Companies Act states that the Companies providing postal ballot shall post notice on its website i.e. it appears to be mandatory so far)

Custody of Minutes

• Minutes Books shall be kept in the custody of the Company Secretary.

• PRESERVATION OF SUPPORTING PAPERS – 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.

• MAINTENANCE OF MINUTES- A company may maintain its Minutes in physical or in electronic form with Timestamp. Timestamp is mandatory for electronic form.

“Timestamp” means the current time of an event that is recorded by a Secured Computer System and is used to describe the time that is printed to a file or other location to help keep track of when data is added, removed, sent or received.