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RESPONSES TO QUERIES RECEIVED ON SECRETARIAL STANDARDS ON BOARD MEETINGS

SS - 01 - FAQ - Companies Law - SS - 01 - FAQ - (SS-1) Scope/1. Is SS-1 applicable to banking entities which are listed on Stock exchanges? Ans. SS-1 is applicable to all companies incorporated under the Act (for definition of Act refer Q.2). If a banking company is incorporated under the Act then SS-1 is applicable to such company. Scope/2. Para of SS-1 the Scope states that if due to subsequent changes in the Act, a particular Standard or any part thereof becomes inconsistent with the Act, the .....

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inconsistent 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 .....

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ces 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 of the company. As such, he may also summon a Meeting of the Board, unless otherwise provided in the Articles. 1/2. Can a Director send an oral requisition to the Company Secretary to convene a Board Meeting? Ans. A requisition by the Director to convene a Board Meeting should be in writing. However, if the req .....

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aging Director/Whole-time Director, as the case may be, refuses to convene the Meeting, the Articles of the company would prevail. In case the Articles are silent, a Company Secretary cannot convene a Meeting as requisitioned by the Director. He may communicate the same to the Director concerned. However, the Director may on his/her own convene a Meeting. 1/4. Para 1.1.2 of SS-1 refers to objection by the majority of Directors present at a Meeting for adjourning a Meeting. If they do not represe .....

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y new system of numbering, which would be distinct and enable ease of reference or cross-reference. Illustrations:- (i) Serially numbering on calendar year basis as follows: 1/2015 , 2/2015 , 3/2015 and so on…. In the next year, numbering would be 1/2016 , 2/2016 , 3/2016 and so on.. (ii) Continuous serially numbering across years: 120th Meeting, 121st Meeting, 122nd Meeting …………………………………to nth Meet .....

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istent 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 .....

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ture is to avoid holding Meetings on National Holidays. Therefore, it is thought fit to state assertively that Board Meetings shall not be convened on National Holidays. 1/9. Is it mandatory for companies to provide their directors with the facility of participation in meetings through electronic mode? Ans. It is not mandatory for companies to provide their directors with the facility of participation in meetings through electronic mode. 1/10. In case companies do not provide the directors with .....

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o attend the Board Meeting through electronic mode but it is not his right. This option may be exercised by the Director only when this facility is provided by the company to its director(s). If the company has not offered to provide facility of participation through electronic mode and the director insists to attend the meeting through electronic mode, the company may decide whether to provide the same or not. 1/11. Can a Director participate in a Board Meeting through electronic mode from his .....

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curity and identification procedures. 1/12. It appears that the explanation under Para 1.2.3 of SS-1 is in conflict with the law in as 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 a .....

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y 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 purpose where signature of the concerned director or his authorised representative could be obtained. 1/14. How can proof of sending and delivery be maintained when the Not .....

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How long are companies required to preserve proof of sending and delivery of Notices or Agenda or Notes on Agenda? Ans. Proof of dispatch and delivery of the Notice or Agenda or Notes on Agenda should be preserved in good order in physical or 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 in line with the requirements for the destruction of the other records of the company. 1/16. .....

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vision for fresh 7 days Notice. 1/17. Can Agenda and Agenda Notes of a Board Meeting be sent separately? Ans. There is no prohibition on sending Agenda and Notes on Agenda separately, subject to the condition that both should be sent atleast seven days before the meeting. 1/18. What will companies do if consent of Independent Director is not obtained for providing notes on items in the nature of Unpublished Price Sensitive Information (UPSI) at a shorter period of time? Ans. The Standard provide .....

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nsidering 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, pr .....

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not necessary that Board gives each and every approval only by way of Resolution. The decision shall be in the form of a Resolution, where it is statutorily or otherwise required. In other cases, decisions can be in narrative form. 1/21. Can any other item which is not included in the Agenda of a Board meeting be discussed at the said meeting? Ans. Yes. Any item not included in the Agenda can be taken up at the Meeting for consideration with the permission of the Chairman and with the consent of .....

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cribed in the Secretarial Standards for reckoning the minimum number of meetings? Ans. The Act requires that atleast 4 meetings of the Board shall be held in each year. Year is not defined in the Act and so the definition under the General Clauses Act, 1897 would be applicable. Further, the stipulation in the Act that it shall be sufficient if a One Person Company, Small Company or Dormant Company holds one Meeting of the Board in each half of a calendar year and the gap between the two Meetings .....

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t such companies cannot hold Meetings with a gap of less than 90 days between two Meetings? Ans. If a One Person Company, Small Company or Dormant Company holds only 2 meetings in a year, then the gap between these two meetings should be minimum 90 days. If more than 2 meetings 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 .....

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ar . 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 keep a record of its proceedings. Furthe .....

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s? Ans. Yes, it will also apply to Meetings of Committees defined under SS-1. The scope of SS-1 clearly states that The principles enunciated in this Standard for Meetings of the Board of Directors are also applicable to Meetings of Committee (s) of the Board, unless otherwise stated herein or stipulated by any other applicable Guidelines, Rules or Regulations. 3/2. How will items relating to approval or change of sitting fees of Directors etc. be transacted if the Interested Directors are not t .....

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g fees/change in sitting fees. 3/3. Para 3.5 of SS-1 states that 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 . Which are the other laws which may contain provisions relating to quorum for Committee meetings? Ans. Regulations framed under any other law may contain provisions for the Quorum of a Committee and such stipu .....

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ned 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, .....

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Custody doesn t mean that the company secretary should have physical custody of the documents. What the particular Standard signifies is the responsibility cast upon the Company Secretary with respect to the custody of Minutes Book and attendance register. The Standard re-emphasises the fact that Minutes are most important primary records and therefore it should be in the custody of a responsible officer. 4/4. Why are entries in the attendance register required to be authenticated by the Compan .....

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prior approval of the Board is necessary for their destruction. Yes. Any such Record destroyed after 1st July 2015 will require the Board s approval, even if it pertains to the prior period. 4/6. Can a request for leave of absence be given by a Director orally? Ans. Request for Leave of Absence by the Director may be oral or written. Any such request received should be mentioned at the Meeting by the Chairman of the Meeting or the Company Secretary and should be recorded in the Minutes. 5/1. Wil .....

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o be maintained? Ans. Proof of dispatch and delivery of the resolutions passed by circulation should be preserved in good order in physical or 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, in line with the requirements for destruction of other records of the company. 7/1. How are the pages of the Minutes Book required to be numbered - meeting wise or year wise? Ans. The pages of .....

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m , 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 .....

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SS-1 require companies to circulate draft Minutes to all Directors, why does Para 7.6.4 of SS-1 again require circulation of signed Minutes? Ans. The requirement of circulating signed copy of Minutes has been introduced with the aim of protecting the interest of individual directors including independent directors by requiring proper and adequate information in a transparent manner be provided thereby reducing areas of dispute and avoiding the associated risks, especially in the light of increa .....

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aging the associated risks, especially in the light of increased accountability of independent directors. Sharing current and past Minutes with the Directors would only strengthen corporate governance. It would be a great comfort for a director to have copies of critical minutes of meetings and chances of tampering with past minutes would be eliminated, as copies of the Minutes are available with them. In order to protect their interests, companies may introduce a system of requiring a past Dire .....

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