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TMI BlogRESPONSES TO QUERIES RECEIVED ON SECRETARIAL STANDARDS ON BOARD MEETINGSX X X X Extracts X X X X X X X X Extracts X X X X ..... onsistent with the Act/Rules, the provisions of the Act/Rules shall prevail. Scope/3. Is SS-1 applicable to only statutory committees or also to those committees which are constituted by the company voluntarily? Further, is SS-1 applicable to Meetings of a Committee where Non-Directors are also members? Ans. "Committee" has been defined in SS-1 to mean a Committee of Directors constituted by the Board. SS-1 is thus applicable to Meetings of Committees fulfilling the following conditions: a) All the Members of the Committee are Directors and b) The Committee has been constituted by the Board. Such committees may be constituted by the company statutorily or voluntarily. In case there is any Committee in which a Non-Director such as CEO/Manager, is a member, SS-1 will not apply to such Committee. Scope/4. Will SS-1 be applicable for a Board meeting, the notice for which has been issued in the month of June, 2015? Ans. SS-1 shall apply only to those Board Meetings in respect of which Notices are issued on or after 1st July, 2015. 1/1. Are Independent Directors empowered to summon a Meeting of the Board under Para 1.1.1 of SS-1? Ans. "Independent Director" is also a Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinuous numbering from its incorporation or from Meetings held on or after 1stJuly, 2015. However, in this case the minutes of the first meeting held on or after 1st July, 2015 should include a mention about such serial numbering. (iii) Serially Numbering on financial year basis as follows: "1/2015-16", "2/2015-16", "3/2015-16" and so on….or 1/15-16, 2/15-16, 3/15-16 and so on In any case, the company should follow a uniform and consistent system. 1/6. How will companies which were incorporated quite some time back (for example 50 years ago) and where old Board Minutes are not available, ensure compliance with Para 1.2.1 of SS1? Ans. In case companies are unable to count and give continuous numbering from their incorporation, they may start giving serial numbers from Meetings held on or after 1st July, 2015. Otherwise, they may choose to follow any other system of numbering as given above. 1/7. What is the place where Board Meetings can be held? Ans. A Board Meeting may be held at any place, in India or abroad. 1/8. Unlike Companies Act, 2013, why does SS-1 restrict companies to hold Board meetings on a National Holiday? Ans. Section 174(4) of the Companies Act, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much as it allows directors to participate through electronic mode in discussions on restricted items, with the permission of the Chairman. How will companies ensure compliance with the requirements of both the Act and the Standards? Ans. This provision is not in conflict with law. Chairman has been given the discretion to allow such participation only over and above the physically present Quorum in case he needs to take views of any such Director on restrictive items to encourage informed decision making. Any such Director participating through Electronic Mode in respect of restricted items with the express permission of Chairman should neither be counted for the purpose of Quorum nor be entitled to vote in respect of such restricted items. 1/13. How can proof of sending Notice or Agenda or Notes on Agenda given by hand and its delivery be maintained by companies? Ans. While delivering Notice or Agenda or Notes on Agenda by hand, signature of the director or of his authorised representative can be taken on the office copy of the Notice or Agenda or Notes on Agenda as an acknowledgement, which can be maintained. In the alternative, companies may maintain a register for this pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependent Directors, the consent of at least one Independent Director is required. 1/19. As per Para 1.3.7 of SS-1, general consent for giving Notes on Agenda items which are UPSI in nature at a shorter Notice may be taken in the first Meeting of the Board held in each financial year. Considering that SS-1 is effective from 1stJuly 2015, what steps should the company take to comply with this requirement? Further will providing "financial results" to the Directors at the meeting itself be sufficient compliance of Para 1.3.7 of SS1? Ans. The effective date of SS-1 being 1st July, 2015, general consent for giving Notes on Agenda Items which are UPSI in nature at a shorter notice for the year 2015-16 may be taken at the first Meeting of the Board held after 1st July 2015. Further, providing "Financial results" is UPSI. Therefore, the financial results may be placed at the meeting with necessary consent being obtained before the concerned item is taken up for consideration at the meeting. 1/20. Para 1.3.8 of SS1 provides that 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. Is it neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs are held in a year where the gap between the 1st and the last meeting in a year exceeds 90 days then it shall be sufficient compliance. 2/3. Is the Board required to lay down the minimum number of meetings that should be held of a Board Committee? Ans. The Board may stipulate minimum number of Meetings to be held by the Committee and their frequency. 2/4. Why does Para 2.3 of SS-1 with respect to Meeting of Independent Directors refer to 'calendar year' and not 'financial year'? Ans. Schedule IV of the Companies Act, 2013 provide for holding of atleast one meeting of independent directors in a year. As per General Clauses Act, "Year" connotes "Calendar Year". Thus, Para 2.3 refers to 'calendar year' and not 'financial year'. 2/5. Is SS-1 applicable to the Meetings of Independent Directors like Meetings of the Committees? Further can companies pay sitting fees to the Independent Directors for attending such separate meeting and are companies required to maintain Minutes of such meeting? Ans. Meeting of Independent Directors is not a Meeting of the Board or of a Committee of the Board. Therefore, provisions of SS-1 would not be applicable to such Meetings. Such Meeting may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/1. Should the attendance sheets maintained in loose leaf be bound alongwith the related minutes or separately? Ans. The attendance register, if maintained in loose-leaf form, shall be bound separately. 4/2. Considering that Minutes of a meeting record the names of Directors present at the meeting, why does Para 4.1.1 of SS-1 require maintenance of a separate Attendance Register? Ans. Maintenance of Attendance Register is a good practice and helps in keeping proper record of the attendance in the Meeting, enables cross-verification and also protects interest of individual directors. It contains the signature of the Directors themselves present, which is not the case in Minutes. The Attendance Register is also contemplated in Article-65 of Table - F of Schedule I of the Act. 4/3. While Paras 4.1.4 & 7.1.7 of SS-1 requires the Minutes book and attendance register to be maintained at the registered office, Paras 4.1.8 & 8.3 requires such books to be kept in the custody of the company secretary. In case the company secretary of the company is not located at the registered office, how will compliance of these Paras be ensured? Ans. Custody doesn't mean that the company secretary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to be numbered - meeting wise or year wise? Ans. The pages of the Minutes Book should be consecutively numbered irrespective of break in the Minutes Book. This should also be followed irrespective of the number or year of Meeting. 7/2. Why does Para 7.2.2.1(h) of SS-1 require the Board to take note of the Minutes of the Committee meetings? Ans. The Board must know the discussions and decisions taken at Committee Meetings. This is also a good governance practice followed by the well governed companies. 7/3. What does recording of decisions in 'narrative form', as stated under Para 7.2.2.2 of SS-1, mean? Ans. The decisions of the Board 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. For instance: If Board approves a project, the decision of the Board may be mentioned in the following manner: "Project XYZ was approved by the Board after thorough discussion." 7/4. Since the Notes on Agenda contain background of the proposal in detail, is such background again required to be recorded in the Minutes? Ans. Yes, the Minutes should mention the background in brief. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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