The Institute of Company Secretaries of India (“ICSI”) has rolled out the revised Secretarial Standard-1 (Secretarial Standard on Meeting of the Board of Directors) and Secretarial Standard-2 (Secretarial Standard on General Meetings). The revised Standards are slated to gain effect from 1st April, 2024.

The revisions have been made considering the following:

• Companies (Amendment) Act, 2017 and Rules notified by MCA
• MCA’s Exemption Notification dated 13th June, 2017
• Amendment in Schedule IV to the Companies Act, 2013 (Notification dated 5th July, 2017)
• Amendment in Companies (Meetings of Board and its Powers) Rules, 2014 (Notification dated 13th July, 2017)
• SEBI vide notification dated 31^st December, 2018 amended the definition of “Unpublished Price Sensitive Information”, effective from 1^st April, 2019.
• MCA notification dated 2nd March, 2020.
• Minor/factual change for better clarity and uniformity in practice.
• Language improvements.

Key revisions in Secretarial Standard-1

1. In sync with Companies (Meetings of Board and its Powers) Rules, 2014, where a proviso was inserted to Rule 3(3)(e), “Any director who intends to participate in the meeting through electronic mode may intimate about such participation at the beginning of the calendar year and such declaration shall be valid for one year. Provided that such declaration shall not debar him from participation in the meeting in person in which case he shall intimate the company sufficiently in advance of his intention to participate in person.”, accordingly, the proviso has been inserted in the revised Secretarial Standard-1.
2. In line with SEBI notification dated 31.12.18, which revised the definition of “Unpublished Price Sensitive Information” to remove “material events in accordance with the listing agreement”, the definition of UPSI in Secretarial Standard-1 has been revised accordingly.
3. c. Owing to Companies (Amendment) Act, 2017 and Rules, where a second proviso was inserted to Section 173 (2), “Provided further that where there is quorum in a meeting through physical presence of directors, any other director may participate through video conferencing or other audio visual means in such meeting on any matter specified under the first proviso” and owing to Companies (Meetings of Board and its Powers) Rules, 2014, where a proviso was inserted to Rule 4, “Provided that where there is quorum in a meeting through physical presence of directors, any other director may participate through video conferencing or other audio visual means”, the consequent paragraph of Secretarial Standard-1 has been revised accordingly.

Key revisions in Secretarial Standard-2

1. a. Referring to Companies (Amendment) Act, 2017, where two provisos were inserted to Section 96(2) and Section 100(1), “Provided that annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance” and “Provided that an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India.“, the proviso has been inserted in the revised Secretarial Standard-1 accordingly.
2. In line with Companies (Amendment) Act, 2017, where a proviso was inserted to Section 188 (1), “Provided also that nothing contained in the second proviso shall apply to a company in which ninety per cent. or more members, in number, are relatives of promoters or are related parties” and referring to Rule 15(3) of Companies (Meeting of Board and its powers) Rules, “In case of wholly owned subsidiary, the resolution passed by the holding company shall be sufficient for the purpose of entering into the transaction between the wholly owned subsidiary and the holding company.”, the proviso has been inserted in the revised Secretarial Standard-1, accordingly.

For a detailed read of the comparative analysis of the revisions of Secretarial Standard-1 and Secretarial Standard-2 each, please refer to the hyperlink below.

Source: Schedule of Amendments to SS-1 and Schedule of Amendments to SS-2

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