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Brief overview of secretarial standards SS1 and SS2

Rohit Jain  
on 14 May 2015

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The Institute of Company Secretaries of India is a statutory body in India to regulate the profession of Company Secretaries. From a start as a small body, the institute has grown to be a large professional body. Members of the Institute are playing key role in helping companies comply with the various laws, rules and regulations. The importance and position of company secretary has been further escalated due to the inclusion of Company secretaries as Key Managerial Personnel in the Companies Act 2013.

The Institute has framed and issued Secretarial standards to streamline and standardize  the diverse secretarial standards currently in vogue. 

The institute , after deliberations with the Industrial bodies and other professional institutes has recently issued two Secretarial standards which will be notified from July 01, 2015 onwards. These secretarial standards have been given statutory force and therefore non compliance with Secretarial standards can attract penalty and prosecution from the Registrar of Companies.

Following is a brief overview of the new Secretarial standards SS-1 and SS-2 issued by the ICSI

Serial

Description

Secretarial Standard

Changes from the prevailing practises

Actions needed

1

Every Board meeting and every meeting of a comittee should be uniquely numbered. Special code or description to be used for describing each kind of meeting.

Secretarial Standard-1

No such numbering system present or being used. 

2

Meeting to convened  on any day except a national holiday at any place and time.

Secretarial Standard-1

No change 

3

Notice of Meeting to mention the place, venue and details of the meeting.

Secretarial Standard-1

No change

4

The chairman of the meeting can specifically permit any Interested director to participate and vote at a meeting in which he is interested

Secretarial Standard-1

New provision related to Related Party transaction rules of Companies Act 2013.

5

To the extent possible, Company should maintain record of notice and receipt of it by the director and members

Secretarial Standard-1

No change

6

Every Notice of the Board Meeting to specify the fact that directors can participate in the meeting through electronic mode

Secretarial Standard-1

Most companies already specify this fact but this standard makes this a statutory obligation.

7

Notice to be given at least 7 days before the meeting. The day on which the notice is sent and the day of meeting shall be excluded. Agenda should also be sent at least 7 days before the meeting.

Secretarial Standard-1

The period of 7 days is exclusive of the day on which the notice is sent and the day of meeting.

8

Each agenda/ item of business should have a unique serial number and a continuous series to be maintained for different kind of meetings.

Secretarial Standard-1

Every resolution passed in a Board Meeting held on or after 1st July 2017 should have a unique serial number.

9

At least 4 Board Meetings to be held in a year

Secretarial Standard-1
1.2.1

No change 

10

Minutes for Board Committee Meetings to be maintained. The frequency of the number of meetings is to be decided based upon the nature of work

Secretarial Standard-1

1.3.3

At least one committee meeting to be held in a single calendar year.

11

Interested directors cannot vote in a Board meeting on a certain list of restricted items

Secretarial Standard-1

List includes

  • Approval of Annual financial statements
  • Board’s reports.
  • Other items as specified.

12

Quorum of the meeting to be two members or one third of the total strength whichever is higher

Secretarial Standard-1

No change

13

Every company to maintain an Attendance Register for Board meetings and Committee meetings. All directors present in the meeting should sign the Register. The register has to be authenticated by the chairman.

Signatures of Directors attending the meeting through electronic mode shall be deemed to be affixed, when the chairman acknowledges their attendance in the register & their presence is recorded in the Minutes

Secretarial Standard-1

4.1.3

At least three registers for every company

  1. Board Meeting Attendance Register.
     
  2. CSR Committee meeting attendance register
     
  3. AGM Attendance Register

14

Chairman or the Company Secretary of every meeting should authenticate all the entries in the Attendance Register.

Secretarial Standard 1

4.1.6

New rule

15

Directors will here onwards need to give advance intimation for leave of absence to the board before the meeting is held

Secretarial Standard 1

4.2

New rule.

16

Separate Minutes Books to be maintained for Committee meetings

Secretarial Standard

7.1.1

Separate register for CSR Committee meeting.

17

Pages in the Minutes Books to be serially numbered

Secretarial Standard 1

7.15

Irrespective of whether the minutes are loose leaf or bound, the pages have to be serially numbered in a Minutes Book.

18

Minutes of a meeting to contain the  whereabouts and locational details of the Director if he has participated in the Board Meeting through video conferencing or any other electronic audio visual mode

Secretarial Standard 1

7.2.2.1

Directors will need to mention the placer from where they are attending the meeting during the commencement of meeting itself.

19

Minutes of meetings to be finalized within 15 days from the date of meeting

Secretarial Standard 1

No change

20

Annual report of a company to contain the number and date of Board meetings/ Committee meetings and director wise attendance details at the meeting

Secretarial Standard 1

 

Annual report of a company must include these details , w.e.f 1st July 2015 and annual report which is filed in the year 2015 onwards

21

Government will notify the class of companies to which SS-2 will be applicable

Secretarial Standard 2

Government notification pending.

22

Notice of Annual general Meeting to be given to every auditor and director of company

Secretarial Standard 2

Notice of the meeting should also be given to the Auditors and Directors of the company as per the timeframe of the companies act 2013.

23

Accompanying documents to the AGM Notice including financial statements to be sent at least 21 days before the meeting.

Day of sending the notice and day of Meeting shall not be included in counting the 21 days period

Secretarial Standard 2

Notice should also be given to the auditor and directors of the company.

24

No items other than those specified in the notice or as per the Companies act to be conducted in the meeting

Secretarial Standard 2

1.9

All items to transacted at the meeting should be LISTED in the Agenda itself

25

Chairman needs to explain the absence of a director in an AGM  meeting

Secretarial Standard 2

4.1.1

Minutes should carry explanation / Brief statement to effectuate this.

26

Auditors should attend the AGM of the company unless exempted by the company

Secretarial Standard 2

4.2

Companies can exempt auditors from attending the Annual General Meeting

27

Rescinding of any previous  Board resolution can be done only by a counter resolution in a subsequent board meeting

Secretarial Standard 2

11

New clause

28

Auditors report / comments to be read at AGM

Secretarial Standard 2

A statement to that effect can be included in the minutes of the meeting.

29

Every resolution and transaction in Minutes book for AGM should be serially numbered and minutes have to be finalized within 30 days of meeting

Secretarial Standard 2

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(I believe in the Supreme court doctrine of 'If you do not like it , do not see it '. If you do not like this article or find it sub-standard or anything else, please do not waste your time commenting something out of context here. There are many other positive things that you can do :)  )

- Rohit Jain
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