secretarial standard 1 and 2 relaxed amidst COVID 19

Secretarial Standards 1 and 2 relaxed amidst COVID 19

Section 118(10) of the Companies Act, 2013 provides for mandatory compliance of SS 1 and SS 2 by all companies.

Due to COVID 19, various provisions of Companies Act, 2013 and rules made there under are relaxed.

Thus for easy of stakeholders, various provisions of secretarial standards 1 and 2 are also relaxed.

The relaxations are voluntary in nature and will be applicable only for the period of relaxation given by MCA.

7 Important relaxations in Secretarial Standards amidst COVID 19

1. Original Provision in Secretarial Standards with regard to participation in meetings through electronic mode: 

Directors shall not participate through Electronic Mode in discussions on certain restricted items. Such restricted items of business include approval of the annual financial statement, Board’s report, prospectus and matters relating to amalgamation, merger, demerger, acquisition and takeover. 

Similarly, participation in the discussion through Electronic Mode shall not be allowed in meetings of the Audit Committee for consideration of annual financial statement including consolidated financial statement, if any, to be approved by the Board.

Relaxation by MCA: Through Video Conferencing, restricted business items can be transacted during the period of relaxation by MCA.

2. Original Provision in Secretarial Standards with regard to means of delivery of notice: 

Where a Director specifies a particular means of delivery of Notice, the Notice shall be given to him by such means. However, in case of a Meeting conducted at a shorter Notice, the company may choose an expedient mode of sending Notice.

Physical delivery of documents is not possible due to COVID 19, the company may choose an expedient mode of delivery in sending Notices, including through e-mail to the concerned directors.

Physical mode of delivery of documents, such as notice, agenda and minutes, etc, in the context of the meeting of the board of directors or committee thereof or resolution proposed to be passed by circulation, it shall be adequate and sufficient compliance, if such documents are served through e-mail instead of physical mode of delivery.

3. Original Provision in Secretarial Standards with regard to number and gap between Board Meetings: 

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.

Relaxation by MCA: maximum interval of 180 days is been relaxed by MCA.

4. Original Provision in Secretarial Standards with regard to committee meetings: 

Committees shall meet as often as necessary subject to the minimum number and frequency prescribed by any law or any authority or as stipulated by the Board.

Relaxation by MCA: As MCA has relaxed maximum gap between two board meetings thus relaxation applies on committee meetings as well.

5. Original Provision in Secretarial Standards with regard to meetings of independent directors: 

Where a company is required to appoint Independent Directors under the Act, such Independent Directors shall meet at least once in a Calendar Year.

MCA has already relaxed the provision in respect of meetings of Independent Directors.

6. Original Provision in Secretarial Standards with regard to matters unsigned: 

Wherever the decision of the Board is based on any unsigned documents including reports or notes or presentations tabled or presented at the Meeting, which were not part of the Notes on Agenda and are referred to in the Minutes, shall be identified by initialing of such documents by the Company Secretary or the Chairman.

As the meetings are conducted through Video Conferencing and the agenda papers are being circulated by e-mails. Any such documents which were not circulated with the agenda but placed at the meeting and referred to in the minutes, should be identified by the company secretary by initialing such documents after the normal situation is restored.

7. Original Provision in Secretarial Standards with regard to signing of Minutes: 

Within fifteen days of signing of the Minutes, a copy of the said signed Minutes, certified by the Company Secretary or where there is no Company Secretary by any Director authorised by the Board, shall be circulated to all the Directors, as on the date of the Meeting and appointed thereafter, except to those Directors who have waived their right to receive the same either in writing or such waiver is recorded in the Minutes.

The copy of the minutes can be signed digitally and circulated to all the directors. In case, minutes cannot be signed digitally, the same can be physically signed and copies of the signed minutes may be circulated to all the directors once normal situation is restored.

Compiled By

CS Ruchi Dawar

ruchi.dawar@gmail.com