Overview of Secretarial Standard - I

All companies are required to conduct meeting as per the Companies Act and Board of Directors in the Board Meeting discuss and decide future action, present scenario and past events. There are certain compliances and procedure to hold Board Meeting and it is been prescribed in Secretarial Standard-I issued by Institute of Company Secretaries of India for holding, convening and conclusion of the Board Meeting of the Company. This Secretarial Standard – I not only provide for conduct of Board Meeting but also stipulates about the presence of directors, vacation of office, frequency of meetings, minutes, quorum, etc.

Convening of Meetings

1. Company Secretary or Director can summon the meeting.  The authority to be provided to person to give notice of the meeting and Director shall convene meeting after consulting Chairman or Managing Director in his absence or any Whole time Director in absence of both.

2. Notice of the meeting shall clearly state serial number, time, place and day of the meeting. Date of meeting shall not be the date of National Holiday i.e. 15th August, 26th January and 2nd October or any such other day as may be declared as National Holiday by the Central Government.

Note: Even the adjourned meeting cannot be held on National Holiday.

3. Directors are allowed to participate in the meeting through electronic mode unless restricted by Companies Act or other law specifically. If meeting is to be held through electronic mode then confirmation is required to be sought from the directors.

4. Notice and Agenda of the meeting shall be delivered by speed post, courier, fax, e-mail or hand delivery. In case the delivery is not made by hand or e – mail then 2 additional days to be provided for service.

5. Notice is to be given 7 days prior to the date of the meeting unless longer period prescribed by AOA.

6. Unpublished price sensitive information means any information which can affect the price of company like financial results of the company, dividends, change in capital structure, change in capital structure, mergers, demergers, acquisitions, change in key managerial personnel, etc.

7. There shall be at least 1 independent director present at the all time during the meeting. In case company does not have independent director then decision shall be final only on ratification by majority of directors.

Frequency of Meetings

1. There shall be at least 4 meetings in 1 calendar year and the gap between 2 meetings shall not exceed 120 days.
2. OPC, small company and dormant company are required to hold 1 meeting in half of the calendar year and the gap between shall not be less than 90 days.
3. Where company is required to appoint independent directors under the Act, shall meet at least once in the year (January - December).

Quorum

1. Quorum shall be present throughout the meeting.
2. Director or his relative shall not be counted in quorum if the resolution in which he is interested to be passed.
3. Quorum of the meeting shall of 1/3rd of directors on Board or 2 directors whichever is higher.

Attendance at Meetings

1. Every company shall maintain separate attendance register on Board Meetings and Committee Meetings.

2. Attendance Register shall contain following particulars:

• Serial Number
• Date of Meeting
• Type of Meeting
• Name of Directors, Company Secretary, invitees, if any.
• Time of Meeting
• Place of Meeting
• Signature

3. The director who is making attendance by electronic mode shall state his name and place from where he is participating to make his attendance on attendance. In this way he is deemed to have signed attendance register.

4. Attendance register shall be kept at registered office in the custody of Company Secretary or Chairman unless other director or place is approved by Board. This attendance registered is to be kept for the 8 years and after 8 years it can be destroyed with the approval of Board.

5. Attendance register can be inspected by directors, Secretarial Auditor and Statutory Auditor only.

6. Entries in attendance register are to be authenticated by the Company Secretary or Chairman by signing each page.

7. Leave of Absence is to be granted to the director only if such request is made. If the director absents himself for a year then office of the director shall be vacated.

Chairman

• Chairman of the Company will be Chairman of Board, if there is no Chairman in the Company or Chairman is absent then Board shall elect one.
• It is duty of Chairman to duly convene meeting with the assistance of Company Secretary in accordance of Act, Rules, Regulations and AOA.
• If the Chairman is interested in any item of business, he shall, with consent of members present, entrust conduct of proceedings in respect to such item to any disinterested director and resume the Chair after such item of business is transacted. The Chairman shall not be present during discussions on such items.

Passing of Resolution by Circulation

1. The matters which are of immediate necessity can be resolved by circulation unless otherwise stipulated in the Companies Act, 2013. Resolution passed by the circulation is equally valid like resolution passed at meeting.

2. Chairman or Managing Director in his absence or any Whole time Director in absence of both, who is disinterested shall approve draft resolution to be circulated.

3. The resolution will be passed by circulation unless not less than 1/3rd of the directors require resolution to be placed at meeting. In such case Chairman shall put same at the Board Meeting.

4. Draft Resolution is to be circulated by speed post, courier, fax, e-mail or hand delivery with necessary papers.

5. Not more than 7 days shall be given to directors to assent or dissent the draft resolution circulated.

6. Interested Director shall not vote on resolution. Interested Director means:

• Director or his relative is interested; or
• Director holds more than 2% of paid up share capital or he is promoter, CEO or manager; or
• Firm or entity, where such director or his relative is member, partner or owner.

7. Date of passing of resolution is when last assent or dissent is received from more than 2/3rd of directors. When vote is received after the last date it will be deemed as abstained from voting.

8. Resolution shall be recorded in the minutes of next meeting with assent, dissent and abstention.

Minutes

1. A company has to maintain minutes in physical in minutes book or in electronic form with timestamp.

2. Pages in minutes book shall be numbered.

3. If any page in Minutes book is blank it has to be scored out and initialed by Chairman who signs the minutes.

4. Minutes of the Board Meeting shall be kept at the Registered Office of the Company or any other place as approved by the Board.

5. General Contents of the Minutes

• Date of Meeting
• Time of Meeting
• Place of Meeting
• Serial Number
• Name of the Company
• Time of Commencement and Conclusion
• Name of Director present physically or through electronic mode (to be recorded alphabetically).
• Appointment of Cost Auditor, Secretarial Auditor, Internal Auditor, Key Managerial Personnel and Statutory Auditor.
• Invitees Present

6. All matters transacted meeting are to be recorded in fair and proper manner by the Company Secretary. It is duty of Chairman to ensure that matter are entered in correctly.

7. All the necessary papers placed before Board are initialed by Chairman or Company Secretary.

8. Where the resolution passed is superseded or modified shall contain reference of earlier resolution or decision.

9. Board shall take note of the last Board Meeting Minutes at immediately following Board Meeting.

10. Draft Minutes of the Meeting are to be circulated among Directors speed post, courier, fax, e-mail or hand delivery within 15 days from the conclusion of Meeting for their comments, in case of circulation by speed post or courier 2 additional days to be provided. If no comments are received within 7 days minutes are to be entered in minutes book within 30 days.

11. Chairman shall initial each page and sign last page of minutes.

Preservation of Minutes Book and Record

• Minutes recorded in physical or electronic time stamp – permanently
• Agenda, notice, Notes on Agenda and other relevant papers for 8 years.
• These records are to be kept in the custody of Company Secretary.

The disclosure of All Board Meetings and Committee Meetings held during financial year is to be made in the Annual Report and Annual Return of the Company indicating presence and absence of Directors during meeting.