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COMPANY ADMINISTRATION
AND MEETINGS

CHAPTER – 13

GENERAL MEETINGS

INTRODUCTION
A meeting may be generally defined as a gathering or
assembly or getting together of a number of persons for
transacting any lawful business. There must be at least two
persons to constitute a meeting. Therefore, one shareholder
usually cannot constitute a company meeting even if he holds
proxies for other shareholders.
The decision-making powers of a company are vested in the
members and the directors. They exercise their respective
powers through resolutions passed by them. General meetings of the members provide a platform
to express their will in regard to the management of the affairs of the company.
Secretarial Standard on General Meetings of companies:

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Secretarial Standard on General Meeting (SS-2) is issued by the Institute of Company Secretaries
of India (ICSI) and approved by Central Government. Compliance of Secretarial Standards is a
must as per the provision of Section 118(10) of Companies Act, 2013.
This Standard is applicable to all types of General Meetings of all companies incorporated under
the Act except One Person Company (OPC) and class or classes of companies which are exempted
by the Central Government through notification.

Corporate Meetings and Collective Decision making

Members’ Meetings

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ANNUAL GENERAL MEETING (SECTION 96)

Section 96 provides that every company, other than a one-person company is
required to hold an annual general meeting every year.
Broadly there are two types of business that are transacted at an Annual General Meeting –
Ordinary Business and Special Business.

Consideration of financial statements & consolidated financial statements, reports of the Board of
Directors and the auditors, declaration of dividend, appointment of Directors in place of those
retiring and approval of appointment of the Auditors and fixing their remuneration are Ordinary
Business.

Holding of Annual General Meeting

 Annual general meeting should be held once in each calendar year.

 First annual general meeting of the company should be held within 9 months from the
closing of the first financial year. Hence it
shall not be necessary for the company to hold any annual general meeting in the year of its
incorporation.

 Subsequent annual general meeting of the company should be held within 6 months from
the date of closing of the relevant financial year.

 The gap between two annual general meetings shall not exceed 15 months

Extension of validity period of AGM

In case, it is not possible to hold a 2nd & subsequent AGM within the prescribed time, the
Registrar may grant extension of time. Such
extension can be for a period not exceeding 3 months.

Meaning of First Financial Year

As per Section 2(41) of Companies Act, 2013 "Financial year" in relation to any company or body
corporate means the period ending on 31st day of March every year, and where it has been
incorporated on or after the 1st day of January of year, the period ending on the 31st day of the
March of the following year, in respect whereof financial statement of company or body corporate
is made up.

Illustrations:
1. M/s XYZ Limited company was incorporated on 10th December 2018, “financial year” of that
company would end on 31st March 2019, in view of sub-section (41) of Section 2 of the Act and
therefore the last date for holding the first Annual General Meeting would be 31st December 2019
(9 months from 31st March 2019).

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2. If a company was incorporated on 10th April 2018, its first financial year would end on 31st
March 2019, only and therefore, the last date for holding the first Annual General Meeting will be
31st December 2019. In this manner, almost 21 months elapse between the date of incorporation and
date of first Annual General Meeting. In this case, the company need not hold any Annual General
Meeting in the year of its incorporation i.e. 2018.

Day, Time and Place for holding an Annual general Meeting

Date:
Every AGM should be held on any other day except on National Holiday as specified by the GOI.
(15th August, 26th Jan., 2nd Oct. or any other day as notified by the Central Govt.).
National Holiday means and includes a day declared as National Holiday by the Central
Government.
Time:
Every AGM should be held during the business hours on any day excluding national holiday. Here,
business hour is between 9.00 A.M. and 6.00 P.M.
Place:

Business to be transacted at Annual general Meeting: [ ADDA]

An AGM of a company must consider the following ordinary businesses:
(a) Annual Accounts; (A)
(b) Declaration of dividend; (D)

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(c) Appointment of directors (D) (retire by rotation); and

(d) Appointment and fixing of remuneration of the auditors. (A)
Other than the above mentioned businesses every other item of AGM and every item of EGM will
be treated as special business.

CASE LAWS
Where there was non-compliance of certain provisions of the Companies Act, 2013 in conducting
Annual General Meeting of the company, same amounted to an act of oppression or
mismanagement.
[Held by National Company Law Tribunal, Chandigarh Bench in the case of Ramprasad Dalmia v.
Board of Directors (2017)]

Penalty for default in holding the Annual general Meeting [Section 99] [ Nhi le paye AGM]
If any default is made in holding the annual general meeting of a company, any member of the
company may make an application to the NCLT to call or direct the calling of, an annual general
meeting of the company and give such ancillary or consequential directions as the Tribunal thinks
expedient.
Such directions may include a direction that one member of the company present in person or by
proxy shall be deemed to constitute quorum for the meeting.
Penalty:
The Company and every officer of the Company who is in default shall be punishable with fine
which may extend to Rs.1,00,000/- and in case of continuous default with a further fine which may
extend to Rs.5,000/- for every day during which such default continues.

EXTRA-ORDINARY GENERAL MEETING (SECTION 100) [ SPECIAL MULAKAT]

An extraordinary general meeting (EGM) is any general meeting of a company other than the
annual general meeting.
Generally, a company convenes an EGM to transact all urgent matter for which it cannot wait till
next annual general meeting.

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Who may convene an EGM?

■ By the Board of Directors
An extraordinary general meeting may be convened by the directors if some business of special
importance requires an approval from the members whenever required.

■ By Board on requisition of members:

The members of a company may ask for an extraordinary meeting to be held.

 Persons entitled to requisition: A requisition for convening an EGM may be made by

members:
(a) holding 10% of the paid-up share capital and having a right to vote of the Company or
(b) holding 10% voting rights, if the company has no share capital, at the date of the deposit
of requisition on the matter to be discussed.

 Compliance of requisition: The Board of Directors are under obligation to proceed within
21 days of the deposit of the requisition to convene an EGM which should be held within 45
days of such deposit of the requisition with the company.
Any reasonable expenses incurred by the requisitionists by reason of the failure of the
Board to call a meeting duly shall be repaid to the requisitionists by the company. Any sum
so repaid shall be recovered by the company from the Directors.

 Notice issued by the requisitionists: The Board may call an extra-ordinary general meeting
(EGM) whenever they deem it fit.
They may also call EGM on the requisition of shareholders carrying at least 1/10th of paid-
up share capital or 1/10th of voting power.
The requisition shall set out matters for which the meeting is called and be sent to the registered
office. The Board has to call within 21 days of the receipt of the requisition an EGM not later than
45 days.

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■ Meeting to be convened by the requisitionists:

If the Board does not within 21 days from the date of receipt of a valid requisition in regard to any
matter, proceed to call a meeting for the consideration of that matter on a day not later than 45
days from the date of receipt of such requisition then the requisitionists may call an EGM
themselves within 3 months from the date of requisition.

■ By the Tribunal (Section 98):

If for any reason it is impracticable to call a meeting of a company or to hold or conduct the
meeting of the company, the Tribunal may, either suo motu or on the application of any director or
member of the company who would be entitled to vote at the meeting:
a) order a meeting of the company to be called, held and conducted in such manner as the
Tribunal thinks fit; and
b) give such ancillary or consequential directions as the Tribunal thinks expedient,
including directions modifying or supplementing in relation to the calling, holding and
conducting of the meeting. Such directions may include a direction that one member of the
company present in person or by proxy shall be deemed to constitute a meeting.
Meeting held pursuant to such order shall be deemed to be a meeting of the company duly
called, held and conducted.

Day, Time & Place

• Day:
An EGM can be held on any day including National Holiday as specified by the GOI. (15th August,
26th Jan., 2nd Oct. or any other day as notified by the Central Govt.).

• Time:
An EGM can be held on any time.

• Place of Meeting

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CLASS MEETINGS:
Class meetings are those meetings which are held by holders of a particular class of securities, e.g.
preference shares and debentures.
Need for such meetings arises when it is proposed to vary the rights of a particular class of shares.

MEETINGS OF DEBENTURE HOLDERS:

It is a meeting of debenture holders to protect their interest relating to redemption of debentures
and interest thereon.
As per the SEBI regulation, when a company issues debentures it provides in the trust deed
executed for securing the issue for the holding of meetings of debenture holders and also gives
power to them to vary the terms of security or to alter their rights in certain circumstances.

RESOLUTIONS
Decisions of a company are made by resolutions passed by the prescribed majority of the members
present at the meetings.
The purpose of a meeting is to arrive at decisions and the sense of a meeting is ascertained by voting
upon proposals put to the meeting.
A formal proposal put to the meeting is resolution.
A company expresses its will by the means of resolutions.
There are three types namely, ordinary, special and resolutions requiring special notice.

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ORDINARY RESOLUTIONS (Section 114 of the Companies Act, 2013)

A resolution shall be an ordinary resolution if the notice required under this Act has been duly
given and it is required to be passed by the votes cast (whether on a show of hands, or electronically
or on a poll) in favour of the resolution, including the casting vote (Chairman) by members who
vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the votes cast
against the resolution by members.

SPECIAL RESOLUTIONS (Section 114 of the Companies Act, 2013)

A resolution shall be a special resolution when it is duly specified in the notice calling the general
meeting and the votes cast in favour of the resolution (whether on a show of hands, or electronically
or on a poll) by members who vote in person or by proxy or by postal ballot are required to be not
less than 3 times the number of the votes cast against the resolution by members.

RESOLUTION REQUIRING SPECIAL NOTICE (Section 115 of the Companies Act, 2013)
Special notice is required of any resolution, notice of the intention to move such resolution shall be
given to the company by such number of members holding not less than 1% of total voting power
or holding shares on which such aggregate sum not exceeding Rs.5,00,000/- as may be prescribed
has been paid-up and the company shall give its members notice of the resolution in the following
manner as prescribed in Rules.

Procedure for special notice:

a) Eligibility for sending Special Notice:

A special notice required to be given to the company shall be signed, either individually or
collectively by such number of members holding not less than 1% of total voting power or
holding shares on which an aggregate sum of not less than Rs.5,00,000/- has been paid-up
on the date of the notice.

b) Notice Period:

Such notice shall be sent by members to the company not earlier than three months but at
least 14 days before the date of the meeting at which the resolution is to be moved, exclusive
of the day on which the notice is given and the day of the meeting.

c) Notice for holding meeting:

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The company shall immediately after receipt of the notice, give its members notice of the
resolution at least 7 days before the meeting, exclusive of the day of dispatch of notice and
day of the meeting, in the same manner as it gives notice of any general meetings.

d) Publication in the Newspapers:

If it is not practicable to give the notice of any general meetings, the notice shall be
published in English language in English newspaper and in vernacular language in a
vernacular newspaper, both having wide circulation in the State where the registered office
of the Company is situated.
Such notice shall be published at least 7 days before the meeting, exclusive of the day of
publication of the notice and day of the meeting.

Filing of Resolutions and Agreements with ROC (MGT-14) (Section 117 of the Companies Act,
2013)
Section 117 provides that a copy of every resolution and an agreement shall be filed in Form No.
MGT.14 with the Registrar, within 30 days of its passing or making thereof.
Resolutions and agreements to be filed with the Registrar are as under:
 Special resolutions;

 Resolutions which have been agreed to by all the members of a company, but which, if not
so agreed to, would not have been effective for their purpose unless they had been passed as
special resolutions;

 Any resolution of the Board of Directors of a company or agreement executed by a

company, relating to the appointment, re-appointment or renewal of the appointment, or
variation of the terms of appointment, of a managing director;

 Resolutions or agreements which have been agreed to by any class of members but which, if
not so agreed to, would not have been effective for their purpose unless they had been
passed by a specified majority or otherwise in some particular manner; and all resolutions
or agreements which effectively bind such class of members though not agreed to by all
those members;

 Resolutions requiring a company to be wound up voluntarily passed in pursuance of section

59 of the Insolvency and Bankruptcy Code, 2016;

 Resolutions passed in pursuance of sub-section (3) of section 179. No person shall be entitled
under Section 399 to inspect or obtain copies of such resolutions; this clause shall not apply
to a banking company in respect of a resolution passed to grant loans, or give guarantee or

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provide security in respect of loans under clause (f) of sub-section (3) of section 179 in the
ordinary course of its business. This sub-clause is not applicable to private.

 Any other resolution or agreement as may be prescribed and placed in the public domain

Q11. At a general meeting of a company, a matter was to be passed by a special resolution. Out of
40 members present, 20 voted in favour of the resolution, 5 voted against it and 5 votes were found
invalid. The remaining 10 members abstained from voting. The Chairman of the meeting declared
the resolution as passed. With reference to the provisions of the Companies Act, 2013, examine the
validity of the Chairman's declaration.
A11. In the given problem, the votes cast in favour (20) being more than 3 times of the votes cast
against (5) , if other conditions of Section 114 are satisfied, the decision of the Chairman is in order.

NOTICE (SECTION 101 OF THE COMPANIES ACT, 2013) [Invitation]

A general meeting of a company may be called by giving not less than clear 21 days' notice either in
writing or through electronic mode.
Where a notice of general meeting is sent by post, it shall be deemed to be served at the expiration
of 48 hours after the letter containing the same is posted.
In simple words, an extra 48 hours be granted in addition to 21 days.
The day on which the notice is deemed to be served on the member, and the day of the general
meeting have to be in addition to the 21 days.
In case of section 8 company, 14 days’ clear notice is required instead of 21 days.

Note: Any accidental omission to give notice to, or the non-receipt of such notice by, any member
or other person who is entitled to such notice for any meeting shall not invalidate the General
Meeting.
However, omission to serve notice of meeting on a member on the mistaken ground that he is not a
shareholder cannot be said to be an accidental omission.

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Shorter notice

CONTENTS OF NOTICE

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The notice of a general meeting shall specify the place, date, day and the hour of the meeting.
Agenda i.e. a statement of the business to be transacted at such meeting.
Proxy clause with reasonable prominence- a statement that a member entitled to attend and vote is
entitled to appoint a proxy.

RECIPIENT OF NOTICE
The notice of every meeting of the company shall be given to:
(a) every member of the company, legal representative of any deceased member or the assignee of
an insolvent member;
(b) the auditor or auditors of the company; and
(c) every director of the company.

Recipients as per Secretarial Standard on GM (SS-2) As stated in SS-2 Notice shall be sent to:
(a) Every member of the Company
(b) Legal representative of any deceased member
(c) Assignee of an insolvent member
(d) The auditor or auditors of the company
(e) Every director of the company
(f) Secretarial Auditor of the Company
(g) Debenture trustee
(h) To other specified persons

MODE OF NOTICE
A Company may give notice either in writing or through electronic mode.

Mode of Notice as per Secretarial Standard on GM (SS-2)

As stated in SS-2 Notice shall be sent by hand or by ordinary post or by speed post or by registered
post or by courier or by facsimile or by e-mail or by any other electronic means.
Notice shall be sent to Members by registered post or speed post or courier or e-mail and not by
ordinary post in the following cases:
• if the company provides the facility of e-voting ;
• if the item of business is being transacted through postal ballot;

Illustration
ABC Ltd. issued a notice on 1st August, 2020 to hold its AGM on 24th August, 2020. Check the
validity of the notice referring to the provisions of the relevant act, in case it is sent by post.

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Answer: Date of holding AGM: 24th August, 2020; Date of dispatch of notice: 1st August, 2020;
Days to be excluded:
(a) Day of holding AGM i.e 24th August, 2020.
(b) Day of dispatch of notice i.e. 1st August, 2020.
(c) 2 additional days for service of notice i.e 2nd & 3rd August, 2020 (SS-2 Para 1.2.6) Number of
days’ notice given: 20 days.
Number of days’ notice required under section 101 of the Act is 21 days. Therefore, it is not a case
of valid notice. However, shortfall of 1 day can be condoned if consent is given for such shorter
notice by at least 95% of the members entitled to vote at such AGM.

Explanatory Statement to be attached to Notice for Special Business Item

Section 102 requires that a statement detailing the material facts of the businesses to be transacted
as special business be annexed to the notice of the general meeting.

Explanatory Statement as per Secretarial Standard on GM (SS-2)

Every Special Business item shall be in form of a Resolution and shall be accompanied by an
explanatory statement which shall set out all such facts as would enable a Member to understand
the meaning, scope and implications of the item & to take a decision thereon.
In respect of Ordinary business items, explanatory statement is not required.
Resolutions format are not required in case of Ordinary Business Item except where the auditors or
directors to be appointed are other than the retiring auditors or directors.

QUORUM FOR MEETINGS (SECTION-103)

Quorum means presence of minimum number of members in a meeting. Quorum is required for
transaction of business.
Section 103 of the Companies Act, 2013 provides that where the articles of the company do not
provide for a larger number, there the quorum shall depend on number of members as on date of a
meeting.

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The above-mentioned minimum of members is required to be present personally in the General

Meeting for forming a Quorum. In other words, the proxies shall not be counted for the purpose to
form a quorum. Two joint holders shall be counted as two for quorum if both joint holders
personally present in the General Meeting.
The representative of Governor of any State or President of India or Company shall be counted as
member for the purpose of quorum and will have all rights of a member.

Quorum provisions in Secretarial Standard on GM (SS-2)

If the quorum provided in the Articles is higher than that provided under the Act, the quorum
should be as per the AOA. One person can be an authorized representative of more than one body
corporate in that case he will be counted separate members for the purpose of quorum.
But there should be at least one more individual present at the meeting other than the individual
A member who is not entitled to vote on any particular item of business being a related party, if
present, shall be counted for the purpose of quorum.

Consequences Of No Quorum:
Unless otherwise provided in the Articles, if the quorum is not present within half-an-hour from the
time appointed for holding a meeting:
(a) The meeting shall stand adjourned to the same day in the next week at the same time and place,
or
(b) to such other date and such other time and place as fixed by the Board; or the meeting, if called
by requisitions shall stand cancelled.

Illustration:
The articles of association of XYZ Ltd. having 700 members as on cutoff date, prescribe for
physical presence of 7 members to constitute quorum of general meetings. Following are the status

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of persons present in a general meeting of XYZ Ltd to consider the appointment of MD. Check the
quorum of the meeting.
(a) Mr. A, the representative of Governor of Maharashtra.
(b) Mr. B & Mr. C are preference shareholders.
(c) Mr. D representing ABC Ltd. and SKY Ltd.
(d) Mr. E, Mr. F, Mr. G and Mr. H are proxies of shareholders.
solution:
(a) Since Mr. A is the representative of the Governor of Maharashtra, shall be treated as a member
personally present (Section 112).
(b) Preference shareholders can vote only in relation to such matters which directly affect their
rights.
In this case, meeting was called to take decision on appointment of MD, which does not affect their
rights. Therefore, Mr. B & Mr. C are not members personally present.
(c) Since Mr. D represents two body corporates, he would be treated as two members personally
present. (Section 113)
(d) Since Mr. E, Mr. F, Mr. G and Mr. H are proxies of shareholders and members are not
personally present. They are not considered while counting quorum.

Adjourned meeting
Notice of an adjourned meeting:
In case of an adjourned meeting or of a change of day, time or place of meeting, the company shall
give not less than 3 days' notice to the members either individually or by publishing an
advertisement in the newspapers (one in English and one in vernacular language) which is in
circulation at the place where the registered office of the company is situated.

Adjourned meeting provisions in Secretarial Standard on GM (SS-2)

Notice of Adjourned meeting to be served as follows:

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No quorum in an adjourned meeting:

If at the adjourned meeting also, a quorum is not present within 1/2 an hour from the time
appointed for holding meeting, the members present shall form the quorum.

Resolution passed at adjourned meetings.

As per Section 116 where a resolution is passed at an adjourned meeting of a company; or the
holders of any class of shares in a company; or the Board of Directors, the resolution shall be
treated as passed on the day it was actually passed and not on any earlier date.

Chairman of Meetings (Section 104)

The Chairman plays a crucial role in a company meeting and is usually appointed by the articles.
The members present in person at a meeting shall elect on a show of hands one of their members to
be the Chairman.
Unless the articles of the company otherwise provide, the members personally present at the
meeting shall elect one of themselves to be the Chairman thereof on a show of hands.
If a poll is demanded on the election of the Chairman, it shall be taken forthwith in accordance with
the provisions of this Act and the Chairman elected on a show of hands shall continue to be the
Chairman of the meeting until some other person is elected as Chairman as a result of the poll, and
such other person shall be the Chairman for the rest of the meeting.

Role of Chairman
The Chairman is responsible for the successful conduct of a meeting. The Chairman has a duty to
keep order, to see that the business is properly conducted and to ensure that the sense of the
meeting is properly ascertained in regard to any question before it.
Duties of Chairman

 He must ensure that the meeting is properly convened and constituted (i.e. proper notice
has been served and quorum has also been observed).

 He must ensure that the provisions of the Act and the articles in regard to the meeting and
its procedures are observed, and that the business is taken in the order set out in the
agenda, and that the business is within the scope of the meeting.

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 He must act at all times bonafidely and in the interest of the company as a whole.
He must give a reasonable chance to the members present, to discuss any proposed
resolution and ensure that views of all are adequately heard.

 He must decide questions arising for decisions during the meeting and must ensure that the
majority hears the minority.

 He must ensure that the sense of the meeting is properly ascertained in regard to any
question before it.

 He must exercise correctly his powers of adjournment. He has no powers to adjourn the
meeting at his own will and pleasure. It is his duty to preserve order and to see that the
business is properly conducted.

 He must ensure the preparation of the minutes of meeting.

PROXY (Section 105 of the Companies Act, 2013)

A member, who is entitled to attend to vote, can appoint another person as a proxy to attend and
vote at the meeting on his behalf.

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Provisions related to proxy:

(a) Any member of a company who is entitled to attend and vote at a meeting of the company shall
be entitled to appoint another person as a proxy to attend and vote at the meeting on his behalf.
(b) A proxy shall not have the right to speak at such meeting and shall not be entitled to vote except
on a poll.

Note:
 A member of a company not having share capital cannot appoint proxy except the articles
of such company provide otherwise.

 A proxy is not counted for the purpose of Quorum.

 A proxy need not be a member of the Company (In case of Section 8 Companies only
member can be appointed as a proxy).

 A person may act as proxy for maximum 50 members and holding in the aggregate not
more than 10% of the total share capital of the company carrying Voting Rights.
However, a Member holding more than ten percent of the total share capital of the
company carrying Voting Rights may appoint a single person as Proxy for his entire
shareholding and such person shall not act as a Proxy for another person or shareholder.

 The proxy form (MGT-11) shall be deposited with the Company 48 hours before the
general meeting of a company.

 Time limit for deposit of proxy forms: The instrument appointing the proxy must be
deposited with the company, 48 hours before the meeting. Any provision contained in the
articles, requiring a longer period than 48 hours shall have effect as if a period of 48 hours
had been specified.

 The instrument appointing a proxy shall:

(a) be in writing; and

(b) be signed by the appointer or his attorney duly authorised in writing or, if the appointer
is a body corporate, be under its seal or be signed by an officer or an attorney duly
authorised by it.
Revocation of proxy:
If after appointment of proxy, the member himself attends the meeting, it amounts to automatic
revocation of proxy. But once the proxy has voted, it cannot be revoked.
If a Proxy had been appointed for the original meeting and such meeting is adjourned, any Proxy
given for the adjourned Meeting revokes the Proxy given for the original Meeting, a proxy later in
date revokes any Proxy/Proxies dated prior to such Proxy.
Proxy is valid until written notice of revocation has been received by the Company before the
commencement of the Meeting or adjourned Meeting, as the case may be.

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Note: A notice of revocation shall be signed by the same Member (s) who had signed the Proxy, in
the case of joint Membership.
A Proxy need not be informed of the revocation of the Proxy issued by the Member.

Question: (1) Mr. A holds 10% of the total share capital of the Company and appoints Mr. B as the
proxy holder. Can Mr. B accept appointment as proxy by any other shareholder?
Hint : Mr. B cannot accept appointment as proxy by any other shareholder.

Question: Annual General Meeting of a Public Company was scheduled to be held on 15.12.2020.
Mr. A, a shareholder, issued two Proxies in respect of the shares held by him in favor of Mr. ‘X’
and Mr. ‘Y’. The proxy in favor of ‘Y’ was lodged on 12.12.2020 and the one in favor of Mr. X was
lodged on15.12.2020. The company rejected the proxy in favor of Mr. Y as the proxy in favor of
Mr. Y was of dated 12.12.2020 and in favor of Mr. X was of dated15.12.2020. Is the rejection by the
company in order?

Hint: As per Section 105 of the Companies Act, 2013 a proxy should be deposited 48 hours before
the time of the meeting. In the given case, the proxies should have, therefore, been deposited on or
before 13.12.2020 (the date of the meeting being 15.12.2020). Mr. X deposited the proxy on
15.12.2020.
Therefore, proxy in favour of Mr. X has become invalid. Thus, rejecting the proxy in favour of Mr.
Y is unsustainable. Proxy in favor of Mr. Y is valid since it is deposited in time.

PROCESS OF CONDUCTING MEETING

The procedure for conducting the Annual General Meeting is explained in detail below:

 Conduct a Board Meeting [Section 173 and Secretarial Standard on Board Meeting
(SS-1)]

 To fix the day, date, time and agenda for the Annual General Meeting.
 To approve the draft notice of Annual General Meeting along with explanatory
statement.
 To authorize Company Secretary or any other officer to issue notice of Annual
General Meeting to every member or to every person entitled to receive this notice.
 To appoint a scrutinizer for scrutinizing the voting process, if providing e-voting
facility to the shareholders.

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 Every Annual General Meeting shall be called during business hours, that is, between 9
a.m. and 6 p.m. on any day that is not a National Holiday and shall be held either at the
Registered Office of the Company or at some other place within the city, town or village in
which the Registered Office of the Company is situated. For Unlisted company it may be
held at any place in India if consent is given in writing or by electronic mode by all the
members in advance.

 Notice of the meeting must be given at least 21 days before the Meeting either in writing or
through electronic mode.

 The Notice should specify the day, date, time and full address of the venue, Route Map of
the Meeting and procedure of e-voting and Proxy Form. A Meeting may be convened at any
time and place, on any day, excluding a National Holiday.

 Notice shall clearly specify the nature of the Meeting and the business to be transacted
thereat. In respect of items of Special Business, each such item shall be in the form of a
Resolution and shall be accompanied by an explanatory statement which shall set out all
such facts as would enable a Member to understand the meaning, scope and implications of
the item of business and to take a decision thereon. In respect of items of Ordinary
Business, Resolutions are not required to be stated in the Notice.

 Quorum should be present throughout the Meeting. No business should be transacted when
the Quorum is not so present.

 Presence of Chairperson must be required.

 Maintain the Minutes Book for Signing the minutes.

VOTING

Voting by show of hands: [Sonia Gandhi]

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In this method, the Chairman calls upon the persons present who are entitled to vote to raise hands
in favor of the motion and on counting them he proceeds to count the hands raised against the
motion also.
On comparison of the hands shown for and against the motion, the Chairman announces his verdict
whether the resolution is carried or lost.
Each member, irrespective of his shareholding, or voting right, has one vote.

Voting by poll: [Manmohan Singh]

Poll means counting of heads.

In this method, the poll is taken if the Chairman or a prescribed number of members are
dissatisfied with the result of voting by show of hands.
In a poll, since the votes are counted on the basis of shareholdings of members, the true sense of
meeting can be ascertained. Further in a poll proxies can also exercise their vote.
In this system, the poll papers are given to persons who are entitled to vote who indicate on them
their names and whether they are voting for or against the motion and also indicate there in the
number of votes which they are entitled to.
The Chairman appoints two scrutinizers to scrutinize these poll papers and submit the report to
him, who declares the result of the poll.

Who can demand Poll?

> In the case a company having a share capital:

By the members present in person or by proxy, where allowed, and having not less than 1/10th of
the total voting power or holding shares on which an aggregate sum of not less than Rs.5,00,000/- or
such higher amount as may be prescribed, has been paid-up.

> In the case of any other company:

By any member or members present in person or by proxy, where allowed, and having not less than
one-tenth of the total voting power.

Special Note: In case of Companies for which e-voting is mandatory, poll is the only method that
can be exercised in the meeting for casting votes by remaining shareholders.

Voting by Postal ballot: [home delivery]

Where a company decides to pass a resolution by postal ballot, it shall send notice to all the
shareholders along with a draft resolution.
In this method, MCA has notified certain business only to be transacted through the Postal Ballot
like merger & amalgamation.
In the notice, the shareholders are asked to send their assent or dissent in writing on a postal ballot
within a period of 30 days from the date of posting of the letter.
Such notice must be sent by registered post acknowledgement due or by any other method as may
be prescribed by the Central Government.

Voting by Electronic Mode: [Narendra Modi]

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Section 108 of Companies Act, 2013 read with Rule 20 of Companies (Management &
Administration) Rules, 2014, it is mandatory for the following companies to have e-voting facility:
□ Listed Companies
□ Companies having 1,000 or more Shareholders

A member may exercise his right to vote at any general meeting by electronic means and company
may pass any resolution by electronic voting system.
Voting by electronic or Electronic voting system means a 'secured system' based process of display
of electronic ballots, recording of votes of the members and the number of votes polled in favour or
against, such that the entire voting exercised by way of electronic means gets registered and
counted in an electronic registry in a centralized server with adequate 'cyber security'.

VOTING THROUGH ELECTRONIC MEANS (Section 108 of the Companies Act, 2013)

It is practically not possible for every member specially members holding minor shares to travel up
to the venue of GM to participate.
To eliminate this difficulty and to enhance the participation of minority members, concept of e-
voting has been introduced by the Companies Act, 2013.
E-voting does not eliminate member's right to physically attend and vote at the general meeting.
However, member can cast his vote through one mode only.
A member after casting his vote through e-voting can go and attend the general meeting but cannot
cast vote in that general meeting.

And if he casts his vote at the GM as well, his electronic vote will be considered as valid.

Applicability:
Section 108 of the Act shall apply to—
• All companies whose equity shares are listed on a recognized stock exchange; and
• All companies having
1000 or more members.

Non- Applicability:

Following companies are out of ambit of e-voting: —

• Companies having whose debenture/preference shares are only listed.
• Companies listed on SME trading platform.
• Companies listed on institutional trading platform.

PROCEDURAL REQUIREMENT OF E-VOTING FACILITY

 The Board shall appoint:

■ Any person as a scrutinizer who is a person of repute who is not in the employment of the
company and who can, in the opinion of the Board, scrutinise the e-voting process or the
ballot process, as the case may be, in a fair and transparent manner.

■ Appoint an Agency - NSDL, CDSL, etc.

 Additional Disclosure in Notice of GM

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The Notice shall additionally disclose the following:

 Indicate the process and manner for voting by electronic means;
 Indicate the time schedule including the time period during which the votes may be
cast by remote e- voting;
 Provide the details about the login ID;
 Specify the process for generating or receiving the password and for casting of vote
in a. secure manner.

 Public Notice by way of Advertisement

The public notice shall be published at least 21 days before the date of general meeting in a
vernacular newspaper and in English newspaper having country-wide circulation giving
details about availability of electronic voting.

 Remote E-Voting

The facility for remote e-voting shall remain open for not less than three days and shall
close at 5.00 p.m. on the date preceding the date of the general meeting.

 Voting at the General Meeting

The Company may provide either Physical or electronic voting at the General Meeting as
well. The Company which falls into ambit of Section 108 has to mandatorily follow voting
by Poll, i.e. they cannot carry out voting by show of hands.

DECLARATION OF RESULT OF VOTING

 The scrutinizer shall, immediately after the conclusion of voting at the general meeting, first
count the votes cast at the meeting, thereafter unblock the votes cast through remote e-
voting in the presence of at least two witnesses not in the employment of the company.
The Scrutinizer will submit the scrutinizer's report within 3 days of the conclusion of the
GM.

 The result should be displayed at Notice Board at Registered Office, Head Office, and
Corporate Office as well as on the website of the Company.
The resolution if passed shall be deemed to be passed on the date of relevant general
meeting. In case of listed Company report shall also be submitted to Stock Exchange.

PASSING OF RESOLUTIONS BY POSTAL BALLOT

Section 2(65) - "Postal Ballot" means voting by post or through any electronic mode.
Applicability:
The postal ballot is applicable to all types of companies except One Person Company, or a
Company having members up to 200.

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The Companies as stated above shall get following resolution passed by postal ballot, instead of
transacting the business in general meeting of the company:
a) Alteration of the Object Clause of Memorandum;
b) Alteration of Articles of Association in relation to defining private company;
c) Buy-back of own shares by the company;
d) Issue of shares with differential voting rights as to voting or dividend or otherwise;
e) Change in place of Registered Office outside local limits of any city, town or village;
f) Sale of whole or substantially the whole of undertaking of a company;
g) Giving loans or extending guarantee or providing security in excess of the limit;
h) Election of a director;
i) Variation in the rights attached to a class of shares or debentures or other securities.
Any item of business required to be transacted by means of postal ballot (as stated above), may be
transacted at a general meeting by a company which is required to provide the facility to members
to vote by electronic means under section 108, in the manner provided in that section.

PROCEDURE FOR CONDUCTING BUSINESS THROUGH POSTAL BALLOT

Notice:
Where a company is required or decides to pass any resolution by way of postal ballot, it shall send
a notice to all the shareholders in writing on a postal ballot or by electronic means within a period
of 30 days from the date of dispatch of the notice.
The notice shall be sent either:
a) by Registered Post or speed post, or

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b) through electronic means like registered e-mail id or

c) through courier service for facilitating the communication of the assent or dissent
of the shareholder to the resolution within 30 days.
Notice of postal ballot provisions in Secretarial Standard on GM (SS-2)
Notice shall also specify the mode of declaration of the results of the voting by postal ballot. Notice
shall also be given to the Directors and Auditors of the company, to the Secretarial Auditor, to
Debenture Trustees, if any, wherever required.
In case the facility of e-voting has been made available, the information about its availability and
details thereof should be mentioned.
Notice shall clearly specify that any Member cannot vote both by post and e-voting and if he votes
both by post and e-voting, his vote by post shall be treated as invalid.
Advertisement:
An advertisement shall be published at least once in a vernacular newspaper in the principal
vernacular language of the district in which the registered office of the company is situated, and
having a wide circulation in that district, and at least once in English language in an English
newspaper having a wide circulation in that district.

Notice to be placed on the website:

The notice of the postal ballot shall also be placed on the website of the company forthwith after the
notice is sent to the members.
Such notice shall remain on such website till the last date for receipt of the postal ballots from the
members.

Appointment of scrutinizer:
The Board of Directors shall appoint one scrutinizer, who is not in employment of the company and
who, in the opinion of the Board can conduct the postal ballot voting process in a fair and
transparent manner.

Submission of report of the scrutinizer:

The scrutinizer shall submit his report as soon as possible after the last date of receipt of postal
ballots but not later than 7 days thereof.
Declaration of result:
The results shall be declared by placing it, along with the scrutinizer's report, on the website of the
company.

Miscellaneous Postal ballot provisions in Secretarial Standard on GM (SS-2)

 Rescinding of Resolution
A Resolution passed by postal ballot shall not be rescinded otherwise than by a Resolution
passed subsequently through postal ballot.

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 Modification to the Resolution

No amendment or modification shall be made to any Resolution circulated to the Members
for passing by means of postal ballot.

PROCESS FOR POSTAL BALLOT

> Step-1:
Where a company decides to pass any resolution by resorting to postal ballot, it shall send a notice
to all the shareholders, along with a draft resolution explaining the reasons therefore, and
requesting them to send their assent or dissent in writing on a postal ballot within a period of 30
days from the date of posting of the letter.
> Step-2:
The notice shall be sent by registered post acknowledgement due, or by any other method as may
be prescribed by the Central Government in this behalf.
Also with the notice, there shall be included a postage pre-paid envelope for facilitating the
communication of the assent or dissent of the shareholder to the resolution within the said period.
> Step -3:
If resolution is assented to by a requisite majority of the shareholders by means of postal ballot, it
shall be deemed to have duly passed at general meeting convened in that behalf.

> Other Important Steps:

 The board of directors shall appoint one scrutinizer, who is not in employment of the
company;
 The scrutinizer shall submit his report as soon as possible after the last date of receipt of
Postal Ballots;

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 The scrutinizer will be willing to be appointed and he is available at the Registered Office of
the company for the purpose of ascertaining the requisite majority;
 The scrutinizer shall maintain a register to record the consent or otherwise received,
including electronic media, mentioning the particulars of name, address, folio number,
number of shares, nominal value of shares, whether the shares have voting, differential
voting or non-voting rights and the Scrutinizer shall also maintain record for postal ballot
which are received in defaced or mutilated form.

MINUTES OF PROCEEDINGS OF MEETINGS (Section 118)

Every company is required to keep minutes of the proceedings of general meetings and of the
meetings of Board of Directors and its committees.

➢ Important provisions relating to the Minutes of the Meeting:

Every company shall record minutes of the proceedings of every general meeting of any class of
shareholders or creditors, and every resolution passed by postal ballot and every meeting of its
Board of Directors or of every committee of the Board.
a) Record minutes within 30 days: Every company shall record within 30 days of the
conclusion of every such meeting concerned, or passing of resolution by postal ballot in
books kept for that purpose with their pages consecutively numbered.

b) Fair and Correct Summary: The minutes of each meeting shall contain a fair and correct
summary of the proceedings.

c) Appointment to be included: All appointments made at any of the meetings shall be

included in the minutes of the meeting.

In the case of a meeting of the Board of Directors or of a committee of the Board, the minutes shall
also contain—
(a) the names of the directors present at the meeting; and
(b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting
from, or not concurring with the resolution.
The Chairman of the meeting has the authority to add or delete anything which:
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.

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d) The minutes kept shall be evidence of the proceedings recorded therein.

No document purporting to be a report of the proceedings of any general meeting of a
company shall be circulated or advertised at the expense of the company, unless it includes
the matters required by this section to be contained in the minutes of the proceedings of
such meeting.

e) Compliances with Secretarial Standard: Every company shall observe secretarial standards
with respect to general and Board meetings specified by the ICSI.

Note: Every company has to follow the Secretarial Standard for convening its General Meeting
and preparing its Minutes.
f) Fine & Punishments: If any default is made in complying with the provisions of this section
in respect of any meeting, the company shall be liable to a penalty of Rs.25,000/- and every
officer of the company who is in default shall be liable to a penalty of Rs.5,000/-.

g) Fine & Punishment for Tampering of minutes: If a person is found guilty of tampering with
the minutes of the proceedings of meeting, he shall be punishable with imprisonment for a
term which may extend to two years and with fine which shall not be less than Rs.25,000/-
which may extend to Rs. 1,00,000/-.

Minutes provisions in Secretarial Standard on GM (SS-2)

■ A distinct Minutes Book shall be maintained for Meetings of the Members of the company,
creditors and others as may be required under the Act. Resolutions passed by postal ballot shall be
recorded in the Minutes book of General Meetings.
■ Every company shall follow a uniform and consistent form of maintaining the Minutes.
■ The pages of the Minutes Books shall be consecutively numbered.
■ Minutes shall not be pasted or attached to the Minutes Book, or tampered with in any manner.
■ Loose Leaf- Minutes of Meetings, if maintained in loose-leaf form, shall be bound periodically
depending on the size and volume. There shall be a proper locking device to ensure security and
proper control to prevent removal or manipulation of the loose leaves.
■ Place of keeping minutes: Minutes Books shall be kept at the Registered Office of the company or
at such other place, as may be approved by the Board.
■ In case a Meeting is adjourned, the Minutes in respect of the original Meeting as well as the
adjourned Meeting shall be entered in the Minutes Book within thirty days from the date of the
respective Meetings.
■ Minutes of all Meetings shall be preserved permanently at the registered office of the Company
with the Custody of Company Secretary in physical or in electronic form with Timestamp.

REPORT ON ANNUAL GENERAL MEETING (Section 121 of the Companies Act, 2013)

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Every listed public company is required to prepare a report on each annual general meeting
including the confirmation to the effect that the meeting was convened, held and conducted as per
the provisions of the Act and the rules made thereunder.

Filing with ROC:

A copy of the report is to be filed with the ROC in Form No. MGT. 15 within 30 days of the
conclusion of annual general meeting along with the prescribed fee.
Rule 31 of the Companies (Management and Administration) Rules, 2014 The report shall be
prepared in the following manner:
a) A report shall be prepared in addition to the minutes of the general meeting.

b) The report shall be signed and dated by the Chairman of the meeting or in case of his
inability to sign, by any two directors of the company, one of whom shall be the Managing
director, if there is one.

c) Such report shall contain the details in respect of the following:

The day, date, hour and venue of the annual general meeting.
Confirmation with respect to appointment of Chairman of the meeting.
Number of members attending the meeting.
Confirmation of quorum.
Confirmation with respect to compliance of the Act and the Rules, secretarial
standards made There under with respect to calling, convening and conducting the
meeting.
 Business transacted at the meeting and result thereof.
 Particulars with respect to any adjournment, postponement of meeting, change in
venue.
 Any other points relevant for inclusion in the Report.
d) Such Report shall contain fair and correct summary of the proceedings of the meeting.

Default in filing the Report:

If the company fails to file the report with the prescribed period then the company shall be liable
for fine not less than Rs.1 lac but not more than Rs.5 lacs and every officer who is in default shall be
punishable with fine not less than Rs.25,000/- but not more than Rs.l,00,000/-

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VIRTUAL MEETINGS:
Present-day shareholders are spread across the country
and also in different countries, and as the AGMs can only
conducted in the city or place in which the registered office
of the company is located, it makes it more difficult for the
shareholders located in faraway locations and cites to
attend the meetings as it involves lot of travel time and cost.
Virtual meetings will help in increasing shareholder
participation as compared to physical meetings because of
improved access, shareholders who cannot attend in person
due to location or other reasons can attend virtually and do not have to incur the time and costs of
travel to a physical meeting.

Advantages of virtual AGM/EGMs

 Increase shareholder participation in meetings.

 Save time on travel and cost because of remote voting.
 Encourages more participation by investors across the world.
 Provides greater accessibility to shareholders who cannot be physically present due to
distance.
 Enables institutional investors to attend more than one meeting in a day and protect
shareholder’s interest.
 Reduce the cost of holding and conducting shareholder meeting, including the costs of the
venue, stationary, transport and refreshments.
 Saves time of the Company’s personnel.

Difficulties in holding virtual Meetings of Members:

 Security of the systems used.

 Streaming with quality without interruption.
 Providing with secure login and shareholder authentication for attendance, with ease of
access for shareholders, and remote voting.
 Combined registration, voting and reporting software.
 Customized instant results screen and detailed audit reporting.
 Data Security of Logins and Passwords.
 Allowing the shareholders, the choice of device.
 The technology used must give all shareholders a reasonable opportunity to participate.
 The company must provide a digital record of the meeting.

As per Regulation 44 of the SEBI (LODR) Regulations, 2015 the top 100 listed entities shall provide
one-way live webcast of the proceedings of the annual general meetings.

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Practical Situations arising in Meetings through video-Conferencing

a) How to accommodate the shareholders who wants to ask questions in view of the large
attendance of shareholders throughout the length and breadth of the country?
Ans In the notice to the AGM it may be mentioned that shareholders whoever wants to speak to get
their names registered and it’s also to be mentioned that at the discretion of the Chairman the
speakers will be allowed to speak depending upon the availability of time.

b) Why the proxy provisions are dispensed with in case of general meetings held through video
conferencing?
Ans. In case of VC meetings there is no question of proxy attendance. A shareholder can himself
attend the meeting from wherever he is located. Same applies to the case with e-voting. In case of e-
voting also there is no proxy to vote on behalf of the shareholder.

c) Is it required to give venue of the meeting in the Notice? If so what would be the venue of
the meeting, for meetings held through video conferencing?
Ans. Yes, place of the meeting shall be provided in the Notice. In case of virtual meetings deemed
venue is to be given.

d) For conduct of AGMs through VC/OAVM, can the Companies mention in their AGM
notices that the Company holds the right to restrict the number of speaker shareholders
depending on the availability of time. Are the companies allowed to restrict speakers?
Ans. Yes, companies can restrict the speakers depending upon the availability of time. The notice
calling for meeting should require the speaker shareholders to register themselves in advance and
depending upon the time availability, it shall be at the discretion of the Chairman to allow the
speakers.

e) The number of speakers registering to speak at the meeting has gone up considerably.
Companies are forced to choose those speakers who are favorably disposed to the company.
Is this a correct practice? How can this be managed?
Ans. If the number of speaker’s shareholders registering is considerably more, the Chairman
should put a cut-off as it may not be feasible to allow all the registered speakers due to time
constraints.

f) Is it mandatory to share the question / query well in advance with the Company by the
Shareholder at the time of registering himself as speaker. Can a shareholder refuse to share
the question, even if asked to share, by the Company?

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Ans. Shareholder may share his query well in advance with the Company so that even if he could
not get connected, his query may be read out and answered. However, the shareholder may prefer
to raise his query at the meeting only and in such case, he need not share his query in advance with
the Company.

g) How can the companies keep registers open for inspection at the AGM held via VC or
OAVM, if the Company does not maintain the registers in electronic form and nor the
company has scanned the same?
Ans. In case the registers are not maintained in an electronic form, the physical
registers/documents should be scanned for uploading in a virtual data room established for the
purpose. Login ID and password can be provided for inspection and it is to be ensured that only
view rights are given for inspection and the registers/documents cannot be deleted, copied or
downloaded or the register/ documents may be made available for inspection on a virtual platform
(e.g., Zoom, Microsoft teams, etc.), and displayed in a presentation form.

h) What are the consequences if during the AGM held through VC or OAVM, the Chairman
gets disconnected due to poor net connectivity etc. and unable to join again? How can the
Company proceed with the AGM for remaining items?
Ans. In case, the Chairman of the meeting gets disconnected due to poor connectivity, etc. for 5-10
minutes, it does not necessarily lead to adjournment of the meeting. However, if the Chairman is
unable to join again and depending on the size, structure, dynamics of the company, there are two
options available: either adjourn the meeting or if the meeting so decides elect another Chairman to
proceed with the AGM, the company is required to follow the Articles/Section 104 of the
Companies Act, 2013 and proceed accordingly.

i) Do Shareholders and Directors have any rights to ask recording of AgM conducted through
VC or OAVM?
Ans. Recording of the General Meetings held through VC or OAVM is not mandatory as per law
and only the recorded transcript has to be maintained. Therefore, a shareholder/director cannot
ask for the recording of meeting conducted through VC or OAVM. Even if the company records
the meeting its only for their internal purpose.

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