MINUTES OF THE MEETING OF THE BOARD

[Mr. M. GOVINDARAJAN]

Rule 3(11) (a) of Companies (Meetings of Board and its Powers) Rules, 2014 provides that at the end of the discussion on each agenda item, the Chairperson of the meeting of the Board shall announce the summary of the decision taken on such item along with names of different directors, if any, who dissented from the decisions taken by the majority.  Rule 3(11)(b) provides that the minutes shall disclose the particulars of the Directors who attend the meeting through Video Conferencing or through audio visual means.

Rule 3(12) (a) provides that the draft of the minutes of the meeting shall be circulated among all the directors within 15 days of the meeting either in writing or in electronic mode as may be decided by the Board.  Rule 3 (12) (b) provides that every director who attended the meeting either in person or through video conferencing/audio visual means shall confirm or give his comments in writing,  as to the accuracy of the recording of the proceedings of the particular meeting in the draft minutes.   The confirmation or comments shall be given within seven days or some reasonable time as decided by the Board from the date of receipt of the draft minutes.   If no comments or confirmation is given it shall be presumed that the concerned director has given his consent to the minutes.

The minutes of the Board Meeting shall be entered in the minute book and signed by the Chairperson.

Secretarial Standard -1, framed by the Institute of Company Secretaries of India, provides that every company shall keep minutes of all board meetings in a minute book.  The minutes shall be kept in accordance with the provisions of the Companies Act, 2013.  The minutes will be the evidence for the proceedings recorded therein.  It will be helpful in understanding the deliberations and decisions taken at the meeting. The minutes  gives a detailed discussion as to-

• Maintenance of minutes;
• Contents of minutes;
• Recording of minutes;
• Entry in the minutes book;
• Signing and dating of minutes;
• Inspection and extracts of minutes;
• Preservation of minutes

Maintenance of minutes

The Secretarial Standard -1 provides the following for the maintenance of minutes of Board Meeting:

• The minutes shall be recorded in books maintained for that purpose;
• A distinct minutes book shall be maintained for meetings of the board and each of its committees;
• A company may maintain its minutes in physical or electronic form with timestamp;
• A company has to follow a uniform and consistent form of maintaining the minutes.   Any decision in such form of maintenance shall be authorized by the Board;
• The pages of the minutes book shall be serially numbered irrespective of a break up in the book in the physical form as well as in the electronic form with time stamp;
• If any page or part thereof in the minutes book is left blank it shall be scored out and initialed by the Chairman who signs the minutes;
• Minutes shall not be pasted or attached to the minutes books or tampered with in any manner;
• If the minutes are maintained in loose leaf form, the same shall be bound periodically depending on the size and volume and coinciding with one or more financial years of the company;
• There shall be a proper locking device to ensure security and proper control to prevent removal or manipulation of the loose leaves;
• The minutes of the Board meeting shall be kept at the Registered Office of the company or at such other place as may be approved by the Board.

Contents of minutes

The contents of minutes may of two types – one, general contents and the other is specific contents.

General contents

• At the beginning the minutes shall state the serial number and type of the meeting, name of the company, day, date, venue and time of commencement and conclusion of the meeting;
• The minutes shall contain the details the names of the directors present physically or through electronic mode, the Company Secretary and the invitees, if any;
• The names of the Directors shall be listed in alphabetical order or in any other logical manner.  In either case the name of the person in the Chair  shall be placed first;
• The capacity in which an invitee attends the meeting and where applicable, the name of entity such invitee represents and the relation, if any, of that entity to the company shall also be recorded;
• All the appointments made in the Board meeting, such as the appointment of directors,  first auditors, Key Managerial Personnel, Secretarial Auditors, internal auditors and cost auditors shall be recorded.  Unless the contrary is proved the above appointments shall be deemed to have been duly approved by the Board;
• The Board shall note all appointments made one level below Key Managerial Personnel;

Specific contents

The minutes shall contain the following specific contents:

• Record of election, if any, of the Chairman of the meeting;
• Record of presence of quorum;
• The names of directors who sought and were granted leave of absence;
• The mode of attendance of every Director whether physically or through electronic mode;
• If the Director participates through electronic mode, his particulars, the local from where and the Agenda items in which he participated;
• Name of the Company Secretary and invitees and mode of their attendance, if through electronic mode;
• Noting of the minutes of the previous meeting;
• Noting the minutes of the meetings of the Committees;
• Text of resolution passed by circulation since the last meeting, including dissent or abstention, if any;
• The fact that an interested director was not present during the discussion and did not vote;
• The views of the Directors particularly the independent director, if specifically insisted upon by such Directors, provided these, in the opinion of the Chairman, are not defamatory of any person, not irrelevant or immaterial to the proceedings or not detrimental to the interests of the company;
• The agenda items in which any director has not participated;
• The name of the director who dissented from the resolution or abstained from voting;
• Ratification by independent director if the meeting was convened at  a shorter notice and transactions of any item other than those included in the agenda;
• The time of commencement and conclusion of the meeting;
• The brief back ground of the proposal shall be mentioned in the minutes.  It shall also summarize the deliberations.  In case of major decisions the rationale thereof shall also be mentioned;
• The decisions shall be recorded in the form of resolutions;
• If a resolution is passed pursuant to the Chairman of the meeting exercising his second or casting vote, the minutes shall record such fact.

Recording of minutes

The responsibility of recording of minutes is on the Company Secretary.  If no company secretary is appointed any other person duly authorized by the Board or by the Chairman in this behalf shall record the proceedings.  The Chairman shall ensure that the proceedings of the meetings are correctly recorded.  He has absolute discretion to exclude from the minutes, matters which in his opinion are or could reasonably be regarded as defamatory of any person, irrelevant or immaterial to the proceedings or which are detrimental to the interests of the company.

The minutes shall be written in clear, concise and plain language.  It shall be written in third person and past tense.  The resolutions shall be written in the present tense.   The minutes need not be an exact transcript of the proceedings of the meeting.  If it is required to be recorded in verbatim, the decision of the Chairman is final.

Where any approval of the Board is taken on the basis of certain papers laid before the board, proper identification shall be made by initialing of such papers by the Company Secretary or the Chairman and a reference for the same shall be made in the minutes.  There shall be also a reference in case an earlier resolution or decision is superseded or modified..

The minutes of the meetings of any committee shall be noted at a meeting of the board held immediately following the date of entry of such minutes in the minutes book.

Finalization of minutes

The draft minutes are circulated to all the directors for their confirmation or comments within fifteen days from the date of the conclusion of the meeting. A director, who ceases to be a director after a meeting of the Board, is entitled to receive the draft minutes of the particular meeting irrespective of whether he attended such meeting or not. On receipt of the same the minutes may be finalized.

In this regard the draft minutes shall be sent to all directors by hand or by speed post or by registered post or by courier or by e-mail or by any other recognized electronic means to all the members of the Board.  If a director specifies a particular mode, then the draft minutes shall be sent to him in the particular mode.  If the draft minutes are sent by speed post or by registered post or by courier an additional two days may be added for delivery.   The proof of delivery of draft minutes shall be maintained by the company

The directors shall communicate their comments, if any, in writing within seven days from the date of receipt of the draft minutes.  If the comments are received after the expiry of seven days it is at the discretion of the Chairman to consider such comments.  If a director does not make any comment it is presumed that he has consented to the draft minutes.

On receipt of comments from all directors the minutes are finalized.

Entry in the minutes book

 Minutes shall be entered in the minutes books within the specified time of thirty days from the conclusion of the meeting.  In case a meeting is adjourned the minutes in respect of the original meeting and the adjourned meeting shall be entered within 30 days from the date of respective meetings.  The minutes shall be recorded by the Company Secretary.   If there is no Company Secretary then it shall be recorded by any other person duly authorized by the Board or the Chairman.  It is to be noted that once the minutes are entered in the book it  shall not be altered.   Any alteration is required the same shall be done by the express approval of the Board at its subsequent meeting in which such minutes are sought to be altered.

Signing and dating of minutes

The minutes of the meeting of the board shall be signed and dated by the Chairman of the meeting or by the Chairman of the next meeting.  The Chairman shall initial each page of the minutes, sign the last page and append to such signature the date on which and the place where he has signed the minutes.  If there is any blank space between the conclusion of the minutes and signature of the Chairman, it shall be scored out.  If the minutes are maintained in electronic form the same shall be signed by the Chairman digitally.  If the minutes are signed then the minutes cannot be altered.  A copy of the signed minutes certified by the Company Secretary or any person duly authorized shall be circulated to all directors within 15 days after they are signed.

Inspection and extracts of minutes

A director is entitled to inspect the minutes of a meeting held before the period of his directorship; during the period of his directorship; even after he ceases to be a director.  The Company Secretary in practice appointed by the company, the Secretarial auditor, the statutory auditor, the cost auditor or the internal auditor of the company can inspect the minutes either in physical form or electronic form.  While providing inspection, all the precautions shall be taken by the Company Secretary or any person authorized in this behalf, to ensure that the minutes book is not mutilated or in any way tampered with by the person inspecting.  A member of the company is not entitled to inspect the minutes. 

Extracts of the minutes shall only be given either in physical form or in electronic form.   Certified copy of resolution passed at a meeting may be given earlier if the text of the resolution had been placed at the meeting.  A director is entitled to receive a copy of the minutes of the meeting held before the period of his directorship; during the period of his directorship and even if he ceases to be a director.

Preservation of Minutes

The minutes shall be preserved permanently in the physical or electronic form with timestamp.  Office copies of notices, agenda, notes of agenda and other related papers shall be preserved in good order either in physical form or in electronic form.  Where under a scheme of arrangement, a company has been merged or amalgamated with another company the minutes of all meetings of the transferor company as handed over to the transferee company along the office copies of the notices, agenda, notes on agenda and other related papers, shall be preserved permanently by the transferee company, notwithstanding the transferor company might have been dissolved.  The same shall be kept for eight financial years or as they remain current whichever is later.   After that period the same may be destroyed with the approval of the Board.

The minutes books shall be kept in the custody of the Company Secretary.   Where there is no Company Secretary by any Director duly authorized by the Board.