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Heroba

Comparative analysis of SS

    Written by "CS Priyanka Yadav" Practicing Company Secretary in Navi Mumbai and Mumbai

Comparative analysis of existing text, revised text, and rationale under Secretarial Standard-1 (SS-1).

Sl. No.Para No.Existing Text of SS-1Text of Revised SS-1Rationale
1Scope (Paragraph 1 & 2)This Standard is applicable to the Meetings of Board of Directors of all companies incorporated under the Act except One Person Company (OPC) in which there is only one Director on its Board and a company licensed under Section 8 of the Companies Act, 2013 or corresponding provisions of any previous enactment thereof.

However, Section 8 companies need to comply with the applicable provisions of the Act relating to Board Meetings.		This Standard is applicable to the Meetings of Board of Directors of all companies incorporated under the Act except One Person Company (OPC) in which there is only one Director on its Board and a company registered under Section 8 of the Companies 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.		Amendment in law.
To reflect the effect of MCA’s Exemption Notification dated 13th June, 2017 in respect of Section 8 Company and Private Company. Now, the exemption is compliance based.

The exemptions stated under notification dated 5th June, 2015 and 13th June, 2017 shall be available only to those companies which have not committed a default in filing its financial statements under Section 137 or annual return under Section 92 of the Act with the Registrar.
21.2.3Any Director may participate through Electronic Mode in a Meeting unless the Act or any other law specifically prohibits such participation through Electronic Mode in respect of any item of business.

Directors shall not participate through Electronic Mode in the discussion 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.		Any Director may participate through Electronic Mode in a Meeting unless the Act or any other law specifically prohibits such participation through Electronic Mode in respect of any item of business.

Directors shall not participate through Electronic Mode in the discussion on certain restricted items unless there is a Quorum in a Meeting through physical presence of Directors.

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.		Amendment in law.

Companies (Amendment) Act, 2017 and Rules.

Section 173(2) - 2nd proviso inserted allowing video conferencing where physical quorum is met.
31.3.4 (After 3rd Paragraph)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.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.		Amendment in law.

Amendment in Companies (Meetings of Board and its Powers) Rules, 2014 (Notification dated 13th July, 2017), Rule 3(3)(e).
41.3.7 (8th Paragraph)“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: –
- financial results;
- dividends;
- change in capital structure;
- mergers, de-mergers, acquisitions, delistings, disposals and expansion of business and such other transactions;
- changes in key managerial personnel; and
- material events in accordance with the listing agreement*.		“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: –
- financial results;
- dividends;
- change in capital structure;
- mergers, de-mergers, acquisitions, delistings, disposals and expansion of business and such other transactions;
- changes in key managerial personnel*; and
- material events in accordance with the listing agreement*.		Amendment in law.

SEBI vide notification dated 31.12.18 amended the definition of “Unpublished Price Sensitive Information”, effective from 01.04.19.
52.1 (2nd Paragraph)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 or Dormant Company holds one Meeting of the Board in each half of a Calendar Year and the gap between the two Meetings of the Board is not less than ninety days.		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 a private company which is recognised as a start-up holds one Meeting of the Board in each half of a Calendar Year and the gap between the two Meetings of the Board is not less than ninety days.

An adjourned Meeting being a continuation of the original Meeting, the interval period in such a case, shall be counted from the date of the original Meeting.

For the purposes of this Standard, the term “start-up” means a private company incorporated under the Act and recognised as start-up in accordance with the notification issued by the Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India.		Amendment in law.

MCA Exemption Notifications dated 13th June, 2017 (Exemption to Private Company / Start-up).
62.3Where a company is required to appoint Independent Directors under the Act, such Independent Directors shall meet at least once in a Calendar Year.Where a company is required to appoint Independent Directors under the Act, such Independent Directors shall hold at least one Meeting in a financial year without attendance of Non-Independent Directors and members of management.Amendment in law.

Amendment in Schedule IV to the Companies Act, 2013 (Notification dated 5th July, 2017).
73.2A Director shall neither be reckoned for Quorum nor shall be entitled to participate in respect of an item of business in which he is interested. However, in case of a private company, a Director shall be entitled to participate in respect of such item after disclosure of his interest.A Director shall neither be reckoned for Quorum nor shall be entitled to participate in respect of an item of business in which he is interested. However, in case of a private company, a Director shall be reckoned for Quorum and entitled to participate in respect of such item after disclosure of his interest.Amendment in law.

MCA Exemption Notifications dated 13th June, 2017 (Exemption to Private Company regarding interested directors and quorum).
83.3Directors participating through Electronic Mode in a Meeting shall be counted for the purpose of Quorum, unless they are to be excluded for any items of business under the provisions of the Act or any other law.Directors participating through Electronic Mode in a Meeting shall be counted for the purpose of Quorum, unless they are to be excluded for any items of business under the provisions of the Act or any other law except for restricted items in which Quorum shall be ascertained on the basis of physical presence of Directors.Amendment in law.

Companies (Amendment) Act, 2017 - Section 173(2).
95.1.2 (3rd Paragraph)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 and participate in the Meeting after disclosure of his interest.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 the Meeting in respect of such item after disclosure of his interest.Amendment in law.

MCA Exemption Notifications dated 13th June, 2017 (Exemption to Private Company).
106.2.2 (3rd Paragraph)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 the meeting.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.Minor/factual change.

Clarification that resolutions passed by circulation do not have a "meeting" date, hence circulation date applies.
11Effective Date (After Paragraph 9)This Standard shall come into effect from 1st October, 2017.This Standard shall come into effect from 1st April, 2024.Effective date update.
12AnnexuresAnnexure ‘A’ (Para 1.3.8)
Annexure ‘B’ (Para 1.3.8)		Annexure ‘A’ (Paragraph 1.3.8)
Annexure ‘B’ (Paragraph 1.3.8)		Language improvement. Use of term "Paragraph" instead of "Para".
13Annex-A (Specific items 9th Bullet point)In case of a public company, the appointment of Director(s) in casual vacancy subject to the provisions in the Articles of the company.In case of a public company, the appointment of Director(s) in casual vacancy subject to the provisions in the Articles of the company. To be subsequently approved in the immediate next general meeting.Amendment in law.

Companies (Amendment) Act, 2017 - Section 161(4).
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