Compliance Checklist
OP. ED.Practical Lawyer Archives

Minutes are summary of the proceedings of a meeting. According to the provisions of Section 118 of the Companies Act, 2013 (“Act”), every company shall maintain minutes prepare and maintain minutes of the proceedings of every general meeting of any class of shareholders or creditors, and every resolution passed by postal ballot and every Board meeting or committee meeting. Under the Act, the minutes of the meeting shall be evidence of the proceedings recorded therein. Where the minutes have been kept in accordance with the provisions of the Act, until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and the resolutions passed, all appointments of Directors, key managerial personnel, auditors or company secretary in practice, shall be deemed to be valid.

In Yamuna Reddy v. B. Sivaraman[1]  Madras High Court observed that:

 “A cursory perusal of Section 195[2] regarding the presumption to be drawn where minutes of the company duly drawn and signed, clearly proves that the presumption arising in this section is a rebuttable one by adducing contrary evidence; that if a proper minutes book is kept and proceedings of meetings are duly recorded, it shall be deemed that the meeting has been duly called, held and all proceedings thereat have duly taken place and the consequent appointment of Director or Directors has been validly made. If the minutes are not recorded or signed within the prescribed period, then it is to be presumed that it is not properly kept and it will not be receivable in evidence. However, the onus to rebut the presumption under Section 195 (of Companies Act, 1956) is on the person who challenges the resolution or the entering of the minutes on the ground of malpractice or misdeed. ”

Taking into account Covid-19 situation that requires social distancing with necessary precautions, Ministry of Corporate Affairs (MCA) allowed companies to conduct shareholders meeting through
Videoconferencing/Other Audio-Visual Means (VC/OAVM). This article is a checklist for preparation, signing and maintenance of minutes of annual general meeting (AGM) conducted through VC/OAVM under the relevant provisions. The listed entities shall ensure compliance with the relevant provisions of Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015.

  1. Applicability.—The provisions of Section 118 of the Act, read with the Rules and circulars issued by the MCA (w.r.t. general meeting through VC/OAVM) are applicable to all companies —private companies, public companies (listed and unlisted companies).
  2. Content to be included in Minutes of AGM through VC.—The minutes of AGM through VC shall provide a fair and correct summary of the proceedings of the meeting. All appointments (i.e. Chairman, Director appointment, retire-by-rotation, reappointment of independent Director, statutory auditors, cost auditors, etc.) made at AGM shall be included in the minutes of the meeting. There shall not be included in the minutes, any matter which, in the opinion of the Chairman of the meeting: (a) is or could reasonably be regarded as defamatory of any person; or (b) is irrelevant or immaterial to the proceedings; or (c) is detrimental to the interests of the company. The Chairman shall exercise absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes of meeting. In relation to the circulars issued the MCA, the minutes of the AGM conducted through VC/OAVM may include the following:

(a) The notice of the meeting, financial statements of the company were sent to all stakeholders concerned through electronic mode.

(b) Summary of instructions read out by the Chairman of the meeting conducted through VC/OAVM.

(c) The facility for joining the meeting was kept open at least 15 minutes before the time scheduled to start the meeting and was not closed till the expiry of 15 minutes after such scheduled time.

(d) Manner of appointment of Chairman of the meeting.

(e) Name and designation of the invitees present at the meeting i.e. statutory auditors, secretarial auditors, independent directors, chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee.

(f) The fact that before the actual date of the meeting, the facility of remote e-voting was provided in accordance with the Act and the Rules (if remote e-voting provisions are applicable).

(g) Number of members present for the meeting. The attendance of members through VC/OAVM shall be counted for the purpose of reckoning the quorum.

(h) Manner of voting i.e. show of hands or voting by poll.

(i) The fact that various documents and registers were available for inspection in accordance with the provisions of Companies Act and MCA circulars.

(j) Depending upon the provisions of the articles of association of the company, the name of proposer and seconder of the specific resolution shall also be included in the minutes of the meeting.

  1. Minutes Book.—A company may maintain a distinct minute book for each type of meeting, namely: (i) general meetings of the members; (ii) meetings of the creditors; (iii) meetings of the Board of Directors; and (iv) meetings of each of the committees.
  2. Date of Entry.—The minutes of proceedings of each meeting shall be entered in the books maintained for that purpose along with the date of such entry within 30 days of the conclusion of the meeting.
  3. Signing and Initials of Minutes of Meeting.—For general meeting, each page of every minutes book shall be initialled or signed and the last page of the record of proceedings of each meeting in such books shall be dated and signed by the Chairman of the same meeting within the period of 30 days or in the event of the death or inability of that Chairman within that period, by a Director duly authorised by the Board of Directors for the purpose.
  4. Place of Maintenance of Minutes of General Meeting.—The minute books of general meetings shall be kept at the registered office of the company. The same shall be preserved permanently and kept in the custody of the Company Secretary or any director duly authorised by the Board.
  5. Inspection of Minutes of General Meeting.—The minute books of general meeting shall be kept open, during business hours, to the inspection by any member without charge. Such right is subject to such reasonable restrictions as the company may, by its articles of association or in general meeting, impose. Any member shall be entitled to be furnished, within 7 working days after he has made a request in that behalf to the company, and on payment of such prescribed fees with a copy of minutes of meeting. A member who has made a request for provision of soft copy in respect of minutes of any previous general meetings held during a period immediately preceding 3 financial years shall be entitled to be furnished, with the same free of cost.
  6. Compliance with Secretarial Standards issued by Institute of Company Secretaries of India.—Every company shall observe secretarial standards with respect to general and Board meetings specified by the ICSI, and approved by Central Government.

Taking into consideration the importance of minutes of general meeting, it’s evidentiary value, inspection rights of the members of the company, the minutes for the AGM conducted in the year 2020 shall be prepared in accordance with the provisions of the Act, Rules and MCA circulars (Circular No. 14 of 2020 dated 8-4-2020 and Circular No. 17 of 2020 dated 13-4-2020). It is necessary to ensure that all relevant and important points are included in the minutes of meeting. This may include question and answer session during the AGM of the company. In certain closely held companies, the members may conduct a roll-call of members, such facts shall also be included in the minutes of the meeting.


*Gaurav N Pingle, Practising Company Secretary, Pune. He can be reached at gp@csgauravpingle.com

[1] 1992 SCC OnLine Mad 400 : (1992) 75 Comp Cas 199.

[2]  Of the Companies Act, 1956, corresponding to S. 118 of the Companies Act, 2013.

COVID 19Hot Off The PressNews

General order for extension of time to hold AGM for FY 2019-20

A big relief is given by the Ministry of Corporate Affairs (MCA) to around 12 lakhs companies today by extending the timeline for holding Annual General Meeting till December 31st from September 30th.

MCA issued directions to RoCs to issue orders without the filing of formal application and payment of fee. Even applications already filed but not approved or rejected are also covered for this relief.

MCA is extending this timeline due to COVID-19 and Meeting the demand from various associations for extending time to hold AGM. This is for the first time that such relief generally is given to all companies.


Ministry of Corporate Affairs

[Press Release dt. 08-09-2020]

COVID 19OP. ED.Practical Lawyer Archives

Under the extant provisions of the Companies Act, 2013 (“the Act”), approval of the shareholders can be obtained by passing a resolution in general meeting or voting through electronic means (i.e. e-voting) or postal ballot. The Act read with the relevant Rules made thereunder provide for detailed procedures for obtaining shareholders’ approval. Under the extant provisions, only meeting of the board of directors can be held through videoconferencing (VC) and other audio-visual means (OAVM). In view of the current extra-ordinary circumstances due to the pandemic caused by COVID-19 prevailing in the country, requiring social distancing, it is difficult for companies to obtain shareholders’ approval by conducting general meetings. Taking into consideration this situation, the Ministry of Corporate Affairs (MCA) had provided a framework for conducting extra-ordinary general meeting of the company through VC or OAVM[1]. MCA issued another Circular and permitted the companies to hold the annual general meeting through VC or OAVM during the calendar year 2020[2].

This article is an analysis of certain provisions of the MCA directions and also address certain challenges for listed companies in conducting AGM through VC or OAVM.

Rights of shareholders: Before we discuss the procedure for conducting general meetings through VC or OAVM, let us first discuss the rights of shareholders. Chapter II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the SEBI Regulations) relates to ‘Principles governing disclosures and obligations of listed entity’. According to the provisions, the shareholders shall have the right to participate in, and to be sufficiently informed of, decisions concerning fundamental corporate changes. The shareholders shall also have an opportunity to participate effectively and vote in general shareholder meetings. Shareholders shall be informed of the rules, including voting procedures that govern general shareholder meetings. They shall have an opportunity to ask questions to the board of directors, to place items on the agenda of general meetings, and to propose resolutions, subject to reasonable limitations. Effective shareholder participation in key corporate governance decisions, such as the nomination and election of members of board of directors. The exercise of ownership rights by all shareholders, including institutional investors. Listed entity shall have adequate mechanism to address the grievances of the shareholders.

The SEBI Regulations also provide that the exercise of voting rights by foreign shareholders shall be facilitated and the processes and procedures for general meetings shall allow for equitable treatment of all shareholders. The procedures of listed entity shall not make it unduly difficult or expensive to cast votes. The listed entities shall also ensure the said rights prescribed in the SEBI Regulations are not affected when the AGM of the company is conducted through VC or OAVM.

The highlights of the MCA Circular permitting companies to hold AGMs through VC or OAVM and certain challenges are as follows:

  1. Taking into consideration the difficulties involved in dispatching of physical copies of financial statements (including Board’s Report, Auditor’s Report, or other documents required to be attached), MCA has permitted sending such documents by e-mail to the members, trustees for the debenture-holders, or any other person entitled to receive such documents. The companies are required to give public notice by way of advertisement in vernacular language of the district in which registered office is situated and at least once in English language in English newspaper (preferably both newspapers having electronic editions). Considering this, the cost of conducting general meetings is significantly reduced for such listed companies.
  2. One of the biggest challenges for listed companies is to get the e-mail addresses of the members (holding shares in physical form) registered for sending financial statements. This will also enable the shareholders to cast their vote through remote e-voting or through e-voting during the meeting. Presently, even in the lockdown, the depositories, Registrar and share transfer agents and companies are taking adequate steps for the registration of e-mail addresses of such shareholders. However, for certain listed companies some shareholders are either not traceable or their contact details are not updated.
  3. According to MCA directions, the listed company shall provide two-way tele-conferencing facility or webex for ease of participation of the members and the participants are allowed to pose questions concurrently or given time to submit questions in advance on the e-mail address of the company. Such facility must have a capacity to allow at least 500 members or members equal to the total number of members of the company. According to the principles governing disclosures and obligations of listed entity under the SEBI Regulations (as discussed above), the shareholders shall have right to participate in, and to be sufficiently informed of, decisions concerning fundamental corporate changes. The shareholders shall also have an opportunity to participate effectively and vote in general shareholder meetings. The shareholders shall have an opportunity to ask questions to the board of directors, to place items on the agenda of general meetings, and to propose resolutions, subject to reasonable limitations. Considering the total number of shareholders and their participation, it would be quite difficult for listed companies to provide two-way tele-conferencing facility in the general meetings. Considering the participation of members and question-answer session, such meetings would take a long time to conclude. Presently, the companies/Registrar and share transfer agents are in the process of developing a system to answer/reply to the queries asked in the general meeting through VC or OAVM.
  4. According to the MCA directions, the process for election of Chairman depends upon the members present at the meeting i.e. if members present are less than 50, then the Chairman is appointed in accordance with Section 104 of the Act. And if the members present are more than 50, then the Chairman shall be appointed by a poll conducted through electronic voting system during the meeting. i.e. generally, in the case of listed entities, it will be compulsory to have a system of ‘electronic voting during the meeting’ for members attending electronically (i.e. VC or OAVM). This mandatory agenda item of electing the Chairman would consume a lot of time before discussing the agenda for the meeting. For listed entities (at least for 500-BSE companies), the participation in general meeting would be more than 50 members. The MCA direction with reference to the appointment of Chairman for the meeting directly conflicts with the provision in the Act. It would be quite challenging for the companies to comply with the said provision.
  5. According to the MCA directions, where less than 50 members are present in a meeting, the Chairman may decide to conduct a vote by show of hands (i.e. one member is equal to one vote, irrespective of shareholding), unless a demand for poll (i.e. one share is equal to one vote) is made by any member in accordance with Section 109 of the Act. In the VC system or OAVM system, the listed companies would be required to have a mechanism for demanding poll and the shareholders should be equipped to participate in the demand. Considering that e-voting (i.e. one share is equal to one vote) is open not less than 3 days before the general meeting, the MCA should have provided uniform method of voting for the general meeting through VC or OAVM.
  6. Under the Act, the register of directors and KMP and their shareholding shall be kept open for inspection at every annual general meeting of the company and shall be made accessible to any person attending the meeting. The VC system may have a facility of the company to upload the scanned copy of the register and members during the meeting through VC or OAVM may inspect the same. Similarly, if the articles of association of the company are being amended, the draft articles of association can be made available for inspection in the VC system.
  7. According to the extant provisions of the Act, the annual general meeting of the company shall be called during business hours i.e. between 9 a.m. to 6 p.m. According to the MCA directions, the convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting. Listed entities shall balance the two provisions for conducting the meeting, however ensuring convenience of shareholders in different time zones is difficult.
  8. In case of payment of final dividend, MCA has directed companies to pay dividend though electronic clearing service or any other means. Where the company is unable to pay the dividend to any shareholders by electronic mode, due to non-availability of bank details, the company are directed to dispatch the dividend warrant/cheque to such shareholder by post (i.e. upon normalisation of postal services). Post-lockdown and thereafter, if such dividend is not claimed by the shareholder then it may get credited in unpaid dividend account and then investor education and provident fund (IEPF) account which may be more difficult for the shareholders to claim such dividend.
  9. Considering the fact that the member would be attending the general meeting through VC or OAVM, the concept of proxy has become redundant. As per the MCA Circular, such member would be counted for the purpose of reckoning the quorum under the Act.
  10. Atleast an independent director and auditor/representative of auditor are mandated to attend the such meeting through VC or OAVM. Institutional investors are encouraged to attend and vote at the meeting.

Taking into consideration that MCA has permitted companies to hold the general meetings through VC or OAVM, SEBI may also relax certain provisions of the SEBI Regulations in due course. It will be interesting to see the effective implementation of the dynamic amendments introduced to the provisions of general meeting – i.e. calling of meeting, holding and conducting of meeting. Taking into consideration the current extra-ordinary circumstances due to the pandemic caused by COVID-19, for the general meetings for the year 2020 should be more of ‘shareholders co-operation’ than ‘shareholders activism’, except in exceptional circumstances.


*Practising Company Secretary, Pune. He can be reached at gp@csgauravpingle.com

[1] MCA General Circular No. 14/2020 dated April 8, 2020.

[2] MCA General Circular No. 20/2020 dated May 5, 2020.