Introduction: The Secretarial Standard on Meetings of the Board of Directors (SS-1), as approved by the Central Government, has been issued by the Institute of Company Secretaries of India (ICSI) under the provisions of Section 118(10) of the Companies Act, 2013 (the Act), vide ICSI Notification No. 1 (SS) of 2015 dated April 23rd, 2015 and published in the Gazette of India Extraordinary Part III - Section 4. SS1 has been formulated with a view to integrate, harmonise and standardise varied secretarial practises followed by various corporates. It prescribes a set of principles for convening and conducting meetings of the Board of Directors and matters related thereto. Applicability: The provisions of Section 118 (10) of the Companies Act, 2013 mandate the observance of Secretarial Standard on Board Meetings specified by The Institute of Company Secretaries of India and approved by Central Government. SS-1 is applicable to the meetings of Board of Directors of all companies incorporated under the Act, except One Person Company (OPC) in which there is only one Director on its Board. The principles enunciated in this SS1 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. Effective Date: SS-1 is effective from 1st July 2015. It shall apply only to Board Meetings, in respect of which Notices are issued on or after 1st July, 2015.
The detailed text of SS1 is available at http://www.icsi.edu/SecretarialStandards.aspx
|1. Convening a meeting|
|1.1.||Authority||1.1.1 Any Director may summon a Board Meeting at any time 1.1.2 Chairman may adjourn the Meeting at any time|
|1.2||Time, place, mode and serial number of Meeting||1.2.1 Every meeting shall have a serial number 1.2.2 Meeting (including adjourned meeting) may be convened at any time/place/on any day, excluding a National Holiday 1.2.3 Any Director may attend the meeting through Audio – Visual means except for restricted items (as covered under SS No. 3.3)|
|1.3||Notice||1.3.1 Written notice to be sent for every Meeting to every Director by hand/speed post/registered post/courier/fax/e-mail/any other electronic means; at the address registered with the Company or appearing in the DIN registration or as specified by the Director. - Proof of sending Notice and its delivery to be maintained for eight years 1.3.2 Notice to be issued by the CS/if no CS, any Director or person authorised by the Board 1.3.3 To specify serial number/day/date/time/full address of the venue of the Meeting 1.3.4 For meeting by Audio Visual means, notice should state the availability of such facility/seek advance confirmation for participation by such mode/contain the contact number or e-mail of the Chairman or CS or authorised person for confirmation. - In absence of advance confirmation from Director; it will be assumed that Director will be attending Meeting physically 1.3.5 To be given even if Meeting held on pre-determined dates/intervals 1.3.6 Notice period of seven days (even for adjourned meeting, unless date decided at the original Meeting), unless AOA prescribes longer period - If notice sent by registered post/speed post/courier additional two days to be added - Notice of adjourned meeting to be given to all Directors of the Company 1.3.7 Agenda/notes on agenda to be given seven days before, unless AOA prescribes longer period - Notes for unpublished price sensitive information may be given at a shorter period, with the consent of majority of Directors (should include at least one independent Director). Such consent can be obtained at 1st board meeting held in each financial year and also when there is change in Directors or before taking up concerned items for discussion 1.3.8 Each item of business requiring approval shall be supported by a detailed note/draft resolution, if any, 1.3.9 Each item of business, shall be serially numbered 1.3.10 Any other matters (outside agenda) may be taken up with the permission of chairman and with the consent of majority directors present (shall include at least one independent director, if any) 1.3.11 For transacting urgent business, the notice/agenda/notes on agenda may be given at a shorter notice, if at least one independent director, if any, shall be present at such meeting, else decisions of meeting to be circulated to all the directors and shall be final only on ratification by at least one independent director. - In case of no independent director, the decisions shall be final only on approval (at the meeting) or ratification thereof, by majority of the directors|
|2. Frequency of Meetings|
|2.1||Meetings of the Board||- Once in every calendar quarter - Maximum interval of 120 days between any two consecutive meetings - Such that at least 4 meetings in each calendar year - First meeting within 30 days of the date of incorporation. For adjourned meeting – interval period counted from the date of original meeting - One person company/small company/dormant company can hold one meeting in each half of a calendar year and gap between two meetings not less than 90 days|
|2.2.||Meetings of Committees||- As often as necessary - Subject to the minimum number/frequency stipulated by Board/any Law/any authority|
|2.3||Meetings of independent directors||- At least once in a year - Purpose of the meeting – (i) Review of performance of: non-independent directors, the board as a whole and chairman. (ii) Assess the quality, quantity and timeliness of flow of information between the company management and the Board|
|3.1||Presence of quorum||- To be present throughout the meeting|
|3.2||Interested Director||- Cannot be reckoned for quorum in respect of an item in which he is interested - Shall not be present in any manner (physically/ Audio-Visual means, during discussions and voting on such item|
|3.3||Directors participating through Audio-Visual Means||
- To be counted for quorum, unless they are to be excluded for any item under the Act/or any other law
- For following restricted items – Not permitted to participate through Audio – Visual Means, If participating through such means with the permission of Chairman, shall not be entitled to vote nor be counted for the quorum
|3.4||Meetings of the Board - Number to form Quorum||3.4.1 1/3rd of the total strength of the Board or 2 directors, whichever is higher (fraction to be rounded off to the next one) excluding directors whose places are vacant - If AOA provides for higher quorum, then company to adhere to the same - If interested directors >/= 2/3rd of the total strength, then remaining directors, not less than 2, shall be the quorum - If no quorum, then unless otherwise provided in AOA, meeting adjourned to the same day next week/ same time/same place or if that day is a National Holiday to the next succeeding day which is not a National Holiday, at the same time and place - Meeting cancelled, if no quorum at the adjourned meeting 3.4.2 If number of Directors is reduced below the minimum number as fixed by the AOA, no business to be transacted unless the number is made up by the remaining Directors or approvals to be taken at the general meeting|
|3.5||Meetings of committees||- All members necessary to form the quorum, unless otherwise stipulated in the Act/any other law/AOA/or by the Board|
|4. Attendance at Meetings|
|4.1||Attendance registers||4.1.1 Separate attendance registers for the meetings of the board and committees
- Pages to be serially numbered
- If maintained in loose-leaf form, to be bound periodically
4.1.2 Attendance register to contain following:
|4.2||Leave of absence||- To be granted only on receipt of request by the Co. Secretary or Chairman - Office of a Director to become vacant if the Director absents himself from all the board meetings held during a period of 12 months with or without seeking leave of absence.|
|5.1||Meetings of the Board||5.1.1. Chairman of the company shall be the chairman of the Board. If no company chairman then directors may elect one of themselves 5.1.2 Chairman of the board shall conduct the meeting. Chairman (with assistance of Co. Secretary) to check that Meeting is duly convened as per Act/applicable guidelines/rules/regulations - If Chairman interested in any item of business, any dis-interested director to take over as chairman. - For directors participating through Audio – Visual means, – Chairman & Co. Secretary to ensure security and identification procedures. No person other than concerned director shall have access to the meeting, unless director is differently abled for whom accompanying person to maintain confidentiality - In case of equality of votes, chairman shall have a second/casting vote, unless otherwise provided in AOA|
|5.2||Meetings of committees||Member of the Committee appointed by the Board or elected by the committee to act as Chairman shall conduct the meeting. If no chairman elected or if elected chairman is absent, the committee shall elect one of its members present as Chairman, unless otherwise provided by AOA.|
|6. Passing of resolution by circulation|
|6.1||Authority for deciding if the resolution to passed by circulation||6.1.1. Chairman of the Board or in his absence, the MD or in his absence, the WTD and where is none, any Director other than interested director. 6.1.2. Not less than 1/3rd of the total number of directors (including interested directors) can require the resolution under circulation to be decided at a meeting.|
|6.2||Procedure||6.2.1 & 6.2.2. Draft resolution (along-with necessary papers) to be individually sent to all the directors (including interested director) on the same day, to the postal address or e-mail address registered by the Director with the company or in absence any of the addresses appearing in the DIN registration - Proof of sending/delivery to be maintained 6.2.3 Each such proposed resolution to be explained by a detailed note/relevant facts/scope and implications/nature of concern or interest of any director/draft of the resolution/how a director shall signify assent or dissent/date by which director shall respond - Decision of the directors shall be sought for each resolution separately within not more than 7 days from the date of circulation|
|6.3||Approval for passing of circular resolution||6.3.1 Approval required from majority of the directors entitled to vote on the said resolution, unless other specified in the AOA - Every resolution shall carry a serial number - Interested director cannot vote 6.3.2 Resolution deemed to have been passed (same shall be effective date, unless otherwise stated ) – on the last date as specified in the note or the date on which assent from more than 2/3rd of the directors received, whichever is earlier - Director to mention date of signing, if date not mentioned, the date of receipt by the company of signed resolution shall be taken as signing date - if director does not respond by last date as specified, it shall be presumed that the director has abstained from voting - if approval of majority directors not received by the last date then the resolution shall be considered as not passed|
|6.4||Recording of circular resolutions||- To be noted at the next board meeting, text thereof with dissent/abstention to be recorded in the minutes - Minutes should also record that interested director did not vote|
|6.5||Validity||- Considered valid as if passed at a duly convened board meeting. No dispensation for the board to meet at the specified frequency|
|7.1||Maintenance of minutes||7.1.1 – To be recorded in books maintained for that purpose 7.1.2 – Distinct minutes book to be maintained for board and committee meetings 7.1.3 - Can be maintained in electronic form, with timestamp - Uniform and consistent form should be followed. Any deviation to be authorised by the Board 7.1.4 Pages of the minutes books (including electronic form) shall be consecutively numbered irrespective of break in the book - If any page left blank, it shall be scored out and initialled by the chairman signing the minutes 7.1.5 Minutes not be pasted or attached to the minutes book or tampered in any manner 7.1.6 If maintained in loose-leaf form, shall be bound periodically. There shall be a proper locking device to ensure security and proper control to prevent removal or manipulation of the loose leaves 7.1.7 To be kept at the registered office of the company or such other place as approved by the Board|
|7.2||Contents of minutes||7.2.1 General contents 22.214.171.124 Minutes shall state sr. no/ type of the meeting/name of the company/day/date/venue/time of commencement and conclusion - Minutes to be entered for original as well as adjourned meeting. In respect of a meeting adjourned for want of quorum, a statement to that effect shall be recorded in the minutes 126.96.36.199 Minutes shall record the names of directors present physically or through Audio – Visual Means (in alphabetical or other logical order starting with the name of person in the chair), the company secretary and invitees (capacity/name of the entity of such invitee and relation of that entity to the company), if any 188.8.131.52 Minutes shall contain a record of all appointments made at the meeting like directors/first auditors/KMP/secretarial auditors/internal auditors/cost auditors/one below KMP 7.2.2 Specific contents 184.108.40.206 (a) Record of election of chairman (b) presence of quorum (c) leave of absence (d) mode of attendance of every director (physical or Audio-Visual means ) (e) particulars of director participating through Audio-Visual means (location and the agenda items) (f) name of co. secretary and invitees (mode of attendance) (g) noting of minutes of preceding board and committee meeting (h) text of the circular resolution passed since last meeting (i) fact that interested director not present (j) non-defamatory, non-detrimental, relevant, material views of the directors (k) part participation of the director, if any (l) fact of dissent and abstinence from voting (m) ratification of meetings held at shorter notice and transacting of any item other than agenda (n) time of commencement and conclusion of meeting 220.127.116.11 Brief background of all proposals and summarised deliberations thereof. Rationale in case of major decisions - Decisions to be recorded in the form of resolutions – if statutorily required. Other cases – decisions can be recorded in a narrative form - If Chairman exercises second or casting vote, the minutes shall record such fact|
|7.3||Recording of minutes||7.3.1 Minutes shall contain fair and correct summary of the proceedings of the meeting - Co. Secretary shall record the proceedings, in absence of CS any other person authorised by board or chairman - Chairman to ensure correctness of minutes and has power to exclude matters which are defamatory/irrelevant or immaterial or which are detrimental to the interests of the company 7.3.2 To be written in clear, concise and plain language in third person and past tense. Resolutions in present tense. Need not be exact transcript of proceedings. If director requires his views/opinions to be recorded verbatim then decision of chairman shall be final 7.3.3 All documents placed before the board and referred in minutes, shall be identified by initials of the CS or chairman 7.3.4 If any earlier resolution or decision is superseded/modified, reference should be made to such earlier resolution/decision 7.3.5 Minutes of preceding board/committee meeting to be noted at a meeting held immediately following the date of entry of such minutes in the minutes book|
|7.4||Finalisation of minutes||- Draft minutes to be circulated to all the members of the board/committee within 15 days of the conclusion of the board or committee meeting by hand or registered post or courier or email or any other recognised electronic means (unless specified by director) - If sent by speed post/registered post/courier, additional 2 days to be added for delivery. Proof of sending/delivery to be maintained by the company - Directors (whether present at the meeting or not/ who cease to be a director after a meeting) shall communicate their comments in writing within 7 days from the date of circulation. If comments received after 7 days, chairman shall have the discretion to consider. If no comments received from a director, it shall be deemed approved by him|
|7.5||Entry in the minutes book||7.5.1 To be entered within 30 days from the date of conclusion of the meeting (including adjourned meeting) 7.5.2 Date of entry shall be recorded by the CS, if no CS then can be entered by chairman or any other person authorised by the board 7.5.3 Minutes once entered in the minutes book cannot be altered, unless on express approval of the board at subsequent meeting|
|7.6||Signing and dating of minutes||7.6.1 Shall be signed and dated by the chairman of the said meeting at any time before the next meeting or chairman of the next meeting at the next meeting 7.6.2 Chairman shall initial each page, sign the last page along with the date and place where he has signed. If minutes maintained electronically, Chairman shall sign the minutes digitally 7.6.3 Minutes once signed cannot be altered, save as mentioned in this standard 7.6.4 Copy of the signed minutes certified by CS or if no CS then by Director authorised by the Board, shall be circulated to all directors within 15 days of signing|
|7.7||Inspection and extracts of minutes||7.7.1 Can be inspected by Directors (in physical or in electronic form), even for meetings held before the period of his directorship 7.7.2 Extracts of the minutes can be given only after the minutes have been entered in the minutes book. Certified True Copy of resolutions may be issued, earlier, if the text of that resolution had been placed at the meeting - Director can inspect or receive extracts of the minutes of the meetings held during his period of directorship, even after he ceases to be a director - CS in practise/secretarial auditor/statutory auditor/cost auditor/internal auditor can inspect the minutes as necessary for their duties, except members of the company - During inspection CS or any other authorised official to facilitate inspection and ensure minutes book is not mutilated or in any way tampered|
|8.||Preservation of minutes and other records||8.1 Minutes of all meetings of the company (including transferor company) shall be preserved permanently in physical or in electronic form with time stamp 8.2 Office copies of notices, agenda, notes on agenda and other related papers relating to the company (including transferor company) shall be preserved for as long as they remain current or for 8 financial years; whichever is earlier 8.3 Minutes book to be kept in the custody of the CS, if there is no CS then any Director authorised by the board.|
|9.||Disclosure||Annual Report and Annual Return shall disclose the number/dates of board and committee meetings held during the financial year indicating the number of meetings attended by each director|
|Annexure A||Illustrative list of items of business which shall not be passed by circulation and shall be placed before the Board at its meeting|
|Annexure B||Illustrative list of items of business for the agenda for the first meeting of the board of the company|
Annexure AIllustrative list of items of business which shall not be passed by circulation and shall be placed before the Board at its Meeting General Business Items
- Noting Minutes of Meetings of Audit Committee and other Committees.
- Approving financial statements and the Board’s Report.
- Considering the Compliance Certificate to ensure compliance with the provisions of all the laws applicable to the company.
- Specifying list of laws applicable specifically to the company.
- Appointment of Secretarial Auditors and Internal Auditors.
- Borrowing money otherwise than by issue of debentures.
- Investing the funds of the company.
- Granting loans or giving guarantee or providing security in respect of loans.
- Making political contributions.
- Making calls on shareholders in respect of money unpaid on their shares.
- Approving Remuneration of Managing Director, Whole-time Director and Manager.
- Appointment or Removal of Key Managerial Personnel.
- Appointment of a person as a Managing Director / Manager in more than one company.
- According sanction for related party transactions which are not in the ordinary course of business or which are not on arm’s length basis.
- Purchase and Sale of subsidiaries/assets which are not in the normal course of business.
- Approve Payment to Director for loss of office.
- Items arising out of separate meeting of the Independent Directors if so decided by the Independent Directors.
- Authorise Buy Back of securities
- Issue of securities, including debentures, whether in or outside India.
- Approving amalgamation, merger or reconstruction.
- Diversify the business.
- Takeover another company or acquiring controlling or substantial stake in another company.
- Approving Annual operating plans and budgets.
- Capital budgets and any updates.
- Information on remuneration of KMP.
- Show cause, demand, prosecution notices and penalty notices which are materially important.
- Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.
- Any material default in financial obligations to and by the company, or substantial non-payment for goods sold by the company.
- Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the company or taken an adverse view regarding another enterprise that can have negative implications on the company.
- Details of any joint venture or collaboration agreement.
- Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.
- Significant labour problems and their proposed solutions. Any significant development in Human Resources/ Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme etc.
- Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material.
- Non-compliance of any regulatory, statutory or listing requirements and shareholder services such as non-payment of dividend, delay in share transfer etc.
Annexure Bllustrative list of items of business for the Agenda for the First Meeting of the Board of the Company
- To appoint the Chairman of the Meeting.
- To note the Certificate of Incorporation of the company, issued by the Registrar of Companies.
- To take note of the Memorandum and Articles of Association of the company, as registered.
- To note the situation of the Registered Office of the company and ratify the registered document of the title of the premises of the registered office in the name of the company or a Notarised copy of lease / rent agreement in the name of the company.
- To note the first Directors of the company.
- To read and record the Notices of disclosure of interest given by the Directors.
- To consider appointment of Additional Directors.
- To consider appointment of the Chairman of the Board.
- To consider appointment of the first Auditors.
- To adopt the Common Seal of the company.
- To appoint Bankers and to open bank accounts of the company.
- To authorise printing of share certificates and correspondence with the depositories, if any.
- To authorise the issue of share certificates to the subscribers to the Memorandum and Articles of Association of the company.
- To approve and ratify preliminary expenses and preliminary agreements.
- To approve the appointment of the Key Managerial Personnel, if applicable and other senior officers.
- To authorise Director(s) of the company to file a declaration with the ROC for commencement of business