By Nidhi Agrawal
The Institute Of Company Secretaries Of India recently issued a clarification on SS-1 and SS-2 relating to the relaxations given by MCA in its circulars in respect of COVID-19.
The Secretarial Standards are issued by the ICSI and Section 118(10) of Companies Act, 2013 provides for mandatory abidance of SS-1 and SS-2 by the companies.
Secretarial Standards also states that wherever there is any inconsistency between the secretarial standards and the Companies Act, 2013, the Companies Act, 2013 will prevail.
Thereby, ICSI in its clarification states that the relaxed provisions issued by the MCA will prevail over the Secretarial Standards and the secretarial standards shall be ineffective till the time these relaxed provisions are in force.
Relaxation provided by ICSI w.r.t SS-1
(Meetings of Board of Directors)
· Participation of Directors through Electronic Mode for restricted items are allowed for Board As well as for the Audit Committee.
· Due to lockdown, physical delivery of notice is not possible, therefore company can now send notices and supporting documents through e-mail. Provided the company should ensure proper safeguard, including delivery and should maintain proof of sending and receipts of such e-mail communication.
· The maximum gap of 120 days between two board meetings has been extended to 180 days for the next two quarters till 30th September. This relaxation related to time gap has been extended to committee meetings also.
· Meeting of independent directors have been done away with for the FY 2019-2020, it will not be considered as a violation. If necessary, they can communicate electronically.
· Any agenda discussed in the meeting of directors and recorded in minutes but could not be circulated before the meeting i.e. tabled items should be identified by the company secretary by initialing as soon as normal conditions are restored.
· The Chairman and the directors can sign the minutes of the meeting digitally and copy of the minutes can be circulated in electronic form to all the directors but if digital signature is not possible, the same can be signed physically and the copies can be provided to the directors as soon as normal conditions are restored.
Relaxation provided by ICSI w.r.t SS-2 (General Meetings)
· Notice of general meeting can be sent through e-mail and EGM (Extraordinary general meeting) can be held through video conferencing or any other audio-visual mode. Provided the notice shall be given only through e-mails registered with the company or with the depository participant/depository.
· The requirement of route map of General Meeting has been done away with respect to notice.
· In the notice of general meeting where reference is given to inspection of documents such documents can be provided through electronic mode.
· No proxy shall be allowed in general meeting through audio-visual mode.
· Attending general meeting through video conferencing shall be counted for the quorum of the meeting. The Requirement of physical presence of quorum shall not apply.
· Unless otherwise provided by the articles, the chairman shall be appointed
– where there are less than 50 members present in the meeting, through section 104 of Companies Act,2013
– In any other case through a poll by the e-voting system.
· In case of postal ballot all the requirements of SS-2 shall be complied electronically.
· Representative in pursuance of Section 112 and Section 113 may be appointed and cast their vote electronically.
· One Independent Director (if there is one), Auditor shall attend meeting through VC.
· Where a poll is required on certain matters the members can cast their vote on the resolution only by sending e-mails through their e-mail addresses registered with the company.
· For ascertaining Voting Rights, as EGM can be conducted through video conferencing or other audio-visual means, the words “present in person or by proxy” shall be construed as “present in person or through video conferencing or other audio-visual means”.
· Due to the outbreak of Covid-19, the results of the general meeting of the company, poll and postal ballot could not be displayed on the notice board of the company. Therefore, it will be sufficient if the company declares such result on the website of the company.
· The company need not comply with “postage prepaid reply envelope” while sending the postal ballot form.
· The provision for physically recording, signing and circulating the minutes of the general meeting shall be replaced by digitally recording, signing and circulating the minutes for the time being until normal conditions are restored.
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