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MEETINGS OF THE BOARD OF DIRECTORS
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....Act, 2013 or corresponding provisions of any previous enactment thereof. However, companies registered under Section 8 of the Companies Act, 2013 need to comply with the applicable provisions of the Act relating to Board Meetings. The exemption to a company registered under Section 8 of the Companies Act, 2013 as referred above and the specific exemptions given to a private company in this Standard shall be available only if it has not committed any default in filing its Financial Statements or Annual Return with the Registrar of Companies. 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. This Standard is in conformity with the provisions of the Act. However, if, due to subsequent changes in the Act, a particular Standard or any part thereof becomes inconsistent with the Act, the provisions of the Act shall prevail. DEFINITIONS The following terms are used in this Standard with the meaning specified: "Act" means the Companies Act, 2013 (Act No. 18 of 2013) or any pre....
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....r a firm of Company Secretary(ies) in Practice appointed in pursuance of the Act to conduct the secretarial audit of the company. "Secured Computer System" means computer hardware, software, and procedure that - (a) are reasonably secure from unauthorized access and misuse; (b) provide a reasonable level of reliability and correct operation; (c) are reasonably suited to performing the intended functions; and (d) adhere to generally accepted security procedures. "Timestamp" means the current time of an event that is recorded by a Secured Computer System and is used to describe the time that is printed to a file or other location to help keep track of when data is added, removed, sent or received. Words and expressions used and not defined herein shall have the meaning respectively assigned to them under the Act. SECRETARIAL STANDARD 1. Convening a Meeting 1.1 Authority 1.1.1 Any Director of a company may, at any time, summon a Meeting of the Board, and the Company Secretary or where there is no Company Secretary, any person authorised by the Board in this behalf, on the requisition of a Director, shall convene a Me....
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....specify the serial number, day, date, time and full address of the venue of the Meeting. 1.3.4 The Notice shall inform the Directors about the option available to them to participate through Electronic Mode and provide them all the necessary information. If a Director intends to participate through Electronic Mode, he shall give sufficient prior intimation to the Chairman or the Company Secretary to enable them to make suitable arrangements in this behalf. The Director may intimate his intention of participation through Electronic Mode at the beginning of the Calendar Year also, which shall be valid for such Calendar Year. Such intimation shall not debar him from participation in the Meeting in person provided he gives such intimation sufficiently in advance to the company. The Notice shall also contain the contact number or e-mail address(es) of the Chairman or the Company Secretary or any other person authorised by the Board, to whom the Director shall confirm in this regard. In the absence of an advance communication or confirmation from the Director as above, it shall be assumed that he will attend the Meeting physically. 1.3.5 The Notice of a Meet....
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.... which are in the nature of Unpublished Price Sensitive Information may be given at a shorter period of time than stated above, with the consent of a majority of the Directors, which shall include at least one Independent Director, if any. For this purpose, "Unpublished Price Sensitive Information" means any information, relating to a company or its securities, directly or indirectly, that is not generally available, which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to the following: - (i) financial results; (ii) dividends; (iii) change in capital structure; (iv) mergers, de-mergers, acquisitions, delistings, disposals and expansion of business and such other transactions; and (v) changes in key managerial personnel*. General consent for giving Notes on items of Agenda which are in the nature of Unpublished Price Sensitive Information at a shorter Notice may be taken in the first Meeting of the Board held in each financial year and also whenever there is any change in Directors. Where general consent a....
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....decisions taken at such a Meeting shall be circulated to all the Directors and shall be final only on ratification thereof by at least one Independent Director, if any. In case the company does not have an Independent Director, the decisions shall be final only on ratification thereof by a majority of the Directors of the company, unless such decisions were approved at the Meeting itself by a majority of Directors of the company. The fact that the Meeting is being held at a shorter Notice shall be stated in the Notice. 2. Frequency of Meetings 2.1 Meetings of the Board The company shall hold at least four Meetings of its Board in each Calendar Year with a maximum interval of one hundred and twenty days between any two consecutive Meetings. The company shall hold first Meeting of its Board within thirty days of the date of incorporation. It shall be sufficient if subsequent Meetings are held with a maximum interval of one hundred and twenty days between any two consecutive Meetings. Further, it shall be sufficient if a One Person Company, Small Company, Dormant Company or private company which is recognised as start-up holds one Meeting of the Board ....
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....ody corporate, or he is a promoter, or manager or chief executive officer of that body corporate; or (b) with a firm or other entity, if such Director is a partner, owner or Member, as the case may be, of that firm or other entity. If the item of business is a related party transaction, then he shall not be present at the Meeting, whether physically or through Electronic Mode, during discussions and voting on such item. 3.3 Directors participating through Electronic Mode in a Meeting shall be counted for the purpose of Quorum, except for restricted items in which Quorum shall be ascertained on the basis of physical presence of Directors. 3.4 Meetings of the Board 3.4.1 The Quorum for a Meeting of the Board shall be one-third of the total strength of the Board, or two Directors, whichever is higher. Any fraction contained in the above one-third shall be rounded off to the next one. Where the Quorum requirement provided in the Articles is higher than one-third of the total strength, the company shall conform to such higher requirement. Total strength for this purpose, shall not include Directors whose places are vacant. If the number....
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....rough Electronic Mode. 4.1.3 The attendance register shall be deemed to have been signed by the Directors participating through Electronic Mode, if their attendance is recorded in the attendance register and authenticated by the Company Secretary or where there is no Company Secretary, by the Chairman or by any other Director present at the Meeting, if so authorised by the Chairman and the fact of such participation is also recorded in the Minutes. In case of Directors participating through Electronic Mode, the Chairman shall confirm the attendance of such Directors. For this purpose, at the commencement of the Meeting, the Chairman shall take a roll call. The Chairman or Company Secretary shall request the Director participating through Electronic Mode to state his full name and location from where he is participating and shall record the same in the Minutes. The proceedings of such Meetings shall be recorded through any electronic recording mechanism and the details of the venue, date and time shall be mentioned. 4.1.4 The attendance register shall be maintained at the Registered Office of the company or such other place as may be approved by the Board. Th....
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.... conduct the Meeting. The Chairman shall encourage deliberations and debate and assess the sense of the Meeting. If the Chairman is interested in an item of business, he shall entrust the conduct of the proceedings in respect of such item to any Non- Interested Director, with the consent of the majority of Directors present, and resume the chair after that item of business has been transacted. However, in case of a private company, the Chairman may continue to chair, be reckoned for quorum and entitled to participate in respect of such item after disclosure of his interest. If the item of business is a related party transaction, the Chairman shall not be present at the Meeting, whether physically or through Electronic Mode, during discussions and voting on such item. In case some of the Directors participate through Electronic Mode, the Chairman and the Company Secretary shall take due and reasonable care to safeguard the integrity of the Meeting by ensuring sufficient security and identification procedures to record proceedings and safe keeping of the recordings. No person other than the Director concerned shall be allowed access to the proceedings of the Meeting where Di....
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.... 6.2.1 A Resolution proposed to be passed by circulation shall be sent in draft, together with the necessary papers, to all the Directors including Interested Directors on the same day. 6.2.2 The draft of the Resolution to be passed and the necessary papers shall be circulated amongst the Directors by hand, or by speed post or by registered post or by courier, or by e-mail or by any other recognised electronic means. The draft of the Resolution and the necessary papers shall be sent to the postal address or e-mail address registered by the Director with the company or in the absence of such details or any change thereto, any of the addresses appearing in the Director Identification Number (DIN) registration of the Director. Proof of sending and delivery of the draft of the Resolution and the necessary papers shall be maintained by the company for such period as decided by the Board, which shall not be less than three years from the date of circulation of such Resolution. 6.2.3 Each business proposed to be passed by way of Resolution by circulation shall be explained by a note setting out the details of the proposal, relevant material facts that enable the....
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.... on the resolution under circulation, along with the Directors who have expressed their desire that the resolution under circulation be decided at a Meeting of the Board, shall not be one third or more of the total number of Directors; and shall be effective from that date, if no other effective date is specified in such Resolution. Directors shall signify their assent or dissent by signing the Resolution to be passed by circulation or by e-mail or any other electronic means. Directors shall append the date on which they have signed the Resolution. In case a Director does not append a date, the date of receipt by the company of the signed Resolution shall be taken as the date of signing. In cases where the interest of a Director is yet to be communicated to the company, the concerned Director shall disclose his interest before the last date specified for the response and abstain from voting. In case not less than one-third of the Directors wish the matter to be discussed and decided at a Meeting, each of the concerned Directors shall communicate the same before the last date specified for the response. In case the Director does not respond on or before the l....
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....rm, shall be bound periodically depending on the size and volume and coinciding with one or more financial years of the company. 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 Minutes Books shall be kept at the Registered Office of the company or at such other place as may be approved by the Board. 7.2 Contents of Minutes 7.2.1 General Contents 7.2.1.1 Minutes shall state, at the beginning the serial number and type of the Meeting, name of the company, day, date, venue and time of commencement of the Meeting. In respect of a Meeting adjourned for want of Quorum, a statement to that effect by the Chairman or in his absence, by any other Director present at the Meeting shall be recorded in the Minutes. 7.2.1.2 Minutes shall record the names of the Directors present physically or through Electronic Mode, the Company Secretary who is in attendance at the Meeting and Invitees, if any, including Invitees for specific items. The names of the Directors shall be listed in alphabetical order or in any other logical manner, but in either case starti....
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....not participate. (m) The fact of the dissent and the name of the Director who dissented from the Resolution or abstained from voting thereon. (n) Ratification by Independent Director or majority of Directors, as the case may be, in case of Meetings held at a shorter Notice. (o) Consideration of any item other than those included in the Agenda with the consent of majority of the Directors present at the Meeting and ratification of the decision taken in respect of such item by a majority of Directors of the company. (p) The time of commencement and conclusion of the Meeting. 7.2.2.2 Apart from the Resolution or the decision, Minutes shall mention the brief background of all proposals and summarise the deliberations thereof. In case of major decisions, the rationale thereof shall also be mentioned. The decisions 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. Where a Resolution was passed pursuant to the Chairman of the Meeting exercising his second or casting vote, the Minutes shall record such fact. 7.3 Recording ....
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....e members of the Board or the Committee, as on the date of the Meeting, for their comments. Where a Director specifies a particular means of delivery of draft Minutes, these shall be sent to him by such means. Proof of sending draft Minutes and its delivery shall be maintained by the company for such period as decided by the Board, which shall not be less than three years from the date of the Meeting. The Directors, whether present at the Meeting or not, shall communicate their comments, if any, in writing on the draft Minutes within seven days from the date of circulation thereof, so that the Minutes are finalised and entered in the Minutes Book within the specified time limit of thirty days. If any Director communicates his comments after the expiry of the said period of seven days, the Chairman, if so authorised by the Board, shall have the discretion to consider such comments. In the event a Director does not comment on the draft Minutes, the draft Minutes shall be deemed to have been approved by such Director. A Director, who ceases to be a Director after a Meeting of the Board is entitled to receive the draft Minutes of that particular Meeting and to offer c....
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....ned Minutes and its delivery shall be maintained by the company for such period as decided by the Board, which shall not be less than three years from the date of the Meeting. 7.7 Inspection and Extracts of Minutes 7.7.1 The Minutes of Meetings of the Board and any Committee thereof can be inspected by the Directors. A Director is entitled to inspect the Minutes of a Meeting held before the period of his Directorship. A Director is entitled to inspect the Minutes of the Meetings held during the period of his Directorship, even after he ceases to be a Director. The Company Secretary in Practice appointed by the company, the Secretarial Auditor, the Statutory Auditor, the Cost Auditor or the Internal Auditor of the company can inspect the Minutes as he may consider necessary for the performance of his duties. Inspection of Minutes Book may be provided in physical or in electronic form. While providing inspection of Minutes Book, the Company Secretary or the official of the company authorised by the Company Secretary to facilitate inspection shall take all precautions to ensure that the Minutes Book is not mutilated or in any way tampered with by the p....
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....exure 'A' (Paragraph 1.3.8) Illustrative 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. Specific Items • 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 perso....