AGM through Video Conferencing under Companies Act 2013

RELAXATIONS IN HOLDING OF ANNUAL GENERAL MEETING THROUGH VIDEO CONFERENCING OR OTHER AUDIO-VISUAL MEANS:

Ministry of Corporate Affairs has given relaxations to Companies to conduct the meeting through Video Conferencing or other audio-visual means vide General Circular No. 20/2020 dated May 05, 2020.:

Governing provision for Annual General Meeting of the Companies Act, 2013 including rules framed thereunder:

♦ Section 96 of the Companies Act, 2013 is the governing Section of Calling, manner of conducting and time period of conducting Annual General Meeting.

♦ The Section not permitted the Companies to call and conduct the Meeting through video conferencing or other audio-visual means.

♦ RELAXATION THROUGH MCA CIRCULAR: Relaxation granted through MCA circular General Circular No. 20/2020 dated May 05, 2020 whereas Company allow to hold AGM through video conferencing or other audio-visual means.

♦ WHY RELAXATION GIVEN FOR AGM:

• Several Representations have been received from various stakeholders to allow Companies to conduct the AGM through video conferencing or other audio-visual means.

• Due to Outbreak of COVID-19, and continue restriction on free movements of peoples, it is difficult for Companies to call and conduct the meeting at the registered office or any place as permitted under the Companies Act, 2013.

• MCA has given relaxation to Companies follows Calendar year as financial year to conduct the AGM till September 30, 2020.

♦ PRE-REQUISITE FOR COMPANIES TO CONDUCT THE MEETINGS THROUGH VIDEO -CONFERERECING OR OTHER AUDIO-VISUAL MEANS:

A. For Companies which are required to provide the facilities of E-voting facilities under the Act, 2013 or any other Company which has opted such facilities:

The framework provided in para 3 -A of EGM Circular – I and the manner and mode of issuing notices provided in sub-para (i)-A of EGM Circular – II shall be applicable mutatis mutandis for conducting the AGM which is re-produced as below:

• Modes of issuing Notice: The Companies may serve notices to the members only through E-mails registered with the Companies, Depository Participant /Depositories.

• While publishing Public Notice, following particulars will also be stated in Public Notice in additions to matters stated in Rule 20 of the Companies (Management and Administration) Rules, 2014 as follows:

• • A statement that the AGM has been convened through VC or OAVM in compliance with applicable provisions of the Act read with General Circular 14/2020, dated 8th April, 2020 and this Circular.

• • The date and time of the AGM through VC or OAVM.

• • Availability of notice of the meeting on the website of the Company and the Stock exchange.

• • The manner in which the members who are holding shares in physical form or who have not registered their email addresses with the Company can cast their vote through remote e-voting or through the e-voting system during the meeting.

• • The manner in which the members who have not registered their email addresses with the Company can get the same registered with the Company.

• • Any other detail considered necessary by the Company.

In this Meeting along with the Ordinary Business, Special business which cannot be avoided can be transacted.

Ordinary Business prescribed in the Companies Act, 2013 are as follows: 

• the consideration of financial statements and the reports of the Board of Directors and auditors;
• the declaration of any dividend;
• the appointment of directors in place of those retiring;
• the appointment of, and the fixing of the remuneration of, the auditors;
  

All Business other than above are Special Business.

For Example: If the tenure of appointment of Independent Director is going to expired in the Annual General Meeting and it is required to appoint him for further term of five years, approval of Shareholders is required and it cannot be avoided otherwise the office of Independent Directors becomes vacant.

• In case, the Company is unable to pay the dividend to any shareholder by the electronic mode, due to non-availability of the details of the bank account, the Company shall upon normalization of the postal services, dispatch the dividend warrant and cheque to such shareholder by post.

• In case, the Company has received the permission from the relevant authorities to conduct its AGM at its registered office, or at any other place as provided under section 96 of the Act, after following any advisories issued from such authorities, the Company may in addition to holding such meeting with physical presence of some members, also provide the facility of VC or OAVM, so as to allow other members of the Company to participate in such meeting. All members who are physically present in the meeting as well as the members who attend the meeting through the facility of VC or OAVM shall be reckoned for the purpose of quorum under section 103 of the Act. All resolutions shall continue to be passed through the facility of e-voting system.

B. For Companies which are not required to provide the facility of e-‘voting under the Act: 

• AGM may be conducted through the facility of VC or OAVM only by a Company which has in its records, the email addresses of at least half of its total number of members, who –

a. in case of a Nidhi, hold shares of more than one thousand rupees in face value or more than one per cent. of the total paid-up share capital, whichever is less;

b. in case of other Companies having share capital, who represent not less than seventy-five per cent. of such part of the paid-up share capital of the Company as gives a right to vote at the meeting;

c. in case of Companies not having share capital, who have the right to exercise not less than seventy-five per cent. of the total voting power exercisable at the meeting.

• The Company shall take all necessary steps to register the email addresses of all persons who have not registered their email addresses with the Company.

• The framework provided in para 3-B of EGM Circular – I and the manner and mode of issuing notices provided in sub-para (i)-B of EGM Circular – II shall be applicable mutatis mutandis for conducting the AGM.

• In such meetings, other than ordinary business, only those items of special business, which are considered to be unavoidable by the Board, may be transacted.

• Owing to the difficulties involved in dispatching of physical copies of the financial statements (including Board’s report, Auditor’s report or other documents required to be attached therewith), such statements shall be sent only by email to the members, trustees for the debenture-holder of any debentures issued by the Company, and to all other persons so entitled.

• The Companies shall make adequate provisions for allowing the members to give their mandate for receiving dividends directly in their bank accounts through the Electronic Clearing Service (ECS) or any other means. For shareholders, whose bank accounts are not available, Company shall upon normalization of the postal services, dispatch the dividend warrant/cheque to such shareholder by post.

• The Companies referred to in paragraphs 3 (A) and (B) above, shall ensure that all other compliances associated with the provisions relating to general meetings viz taking of disclosures, inspection of related documents/registers by members, or authorizations for voting by bodies corporate, etc as provided in the Act and the articles of association of the Company are made through electronic mode.

• The Companies which are not covered by the General Circular No. 18/2020, 21.04.2020 and are unable to conduct their AGM in accordance with the frame provided in this Circular are advised to prefer applications for extension of AGM at suitable point of time before the concerned Registrar of Companies under section 96 the Act.