Conduction of Annual General Meeting (AGM) through Video Conferencing (VC) or Other Audio Visual Means (OAVM)
The Ministry of Corporate Affairs (MCA) vide its General Circular No 14/2020 issued earlier, on April 08, 2020, allowed the Companies to hold their Extra-Ordinary General Meetings (EGM) through Video Conferencing (VC) or Other Audio Visual Means (OAVM). Later on May 05, 2020, MCA has come up with another Circular i.e. General Circular No 20/2020 allowing the Companies for holding Annual General Meeting (AGM) through Video Conferencing (VC) or Other Audio Visual Means (OAVM) in the calendar year 2020 subject to the fulfillment of few requirements.
It is clarified that the four Ordinary Businesses as specified in Section 102 (2) (a) of the Companies Act, 2013 (Act) and any item of Special Business which are considered to be unavoidable in nature by Board can be transected in the said AGM.
[It is nowhere clarified / explained “unavoidable” hence, it decides on basis of situations and good governance.]
Before knowing the process of holding AGM through VC or OAVM, we should be aware with the intentions of authorities and should be very clear with the requirements of issuing aforesaid Circular. As your are aware that the Corona virus Pandemic COVID – 19 has leapfrogged all the historic pandemics & Crises and alo has put the earth & the whole economic & business system to a halt.This pandemic has also led to temporary shutting down of millions of Corporate and industrial unit. This Circular had issued by MCA in the view of current situation of COVID – 19 and Social Distancing which led the Companies to complete shutdown or to do activities with minimum number of staff.
That is why, the Ministry has come up with this circular in order to comply with the guidelines for maintaining Social Distancing, avoid public gathering, minimizing cost and efforts etc.
Procedure of Holding Annual General Meeting (AGM) through Video Conferencing (VC) or Other Audio Visual Means (OAVM)
A. For Companies mandatory require to/opted for providing e-voting facility-
1. The Notice of Holding AGM shall be dispatched to members only through e-mails registered with the Company or Depository Participant;
[Author’s Suggestion: The manner/ framework of holding AGM through VC or OAVM and clear instructions on how to access and participate in the meeting shall be well detailed in the Notes para.]
2. The copies of financial statements including Board’s report, Auditor’s report or other documents required to be attached therewith, shall be sent only by email to the members, trustees for the debenture-holders, and to all other persons so entitled;
3. Before sending notices of AGM and copies of Financial Statements to members, an advertisement has to be published at least once in a vernacular newspaper in principal vernacular language of the district in which the registered office of the Company is situated and at least in English Language in English Newspaper having a wide circulation in that district, preferable both newspapers having electronic editions,and shall specify the following information:
(a) statement that the AGM will be convened through VC or OAVM in compliance with applicable provisions of the Act read with applicable Circular;
(b) the date and time of the AGM through VC or OAVM;
(c) availability of notice of the meeting on the website of the company and the stock exchange, in case of a listed company;
[Author’s Suggestion: It is suggested to provide the link of website of the company and the stock exchange, if possible.]
(d) 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;
(e) the manner of registering email addresses of members who have not registered their IDs with the company;
(f) the manner in which the members can give their mandate receiving dividends directly in their bank accounts through Electronic Clearing Service (ECS) or any other means;
[This clause is applicable only for those companies who are declaring final dividend at their AGM.]
(g) any other detail considered necessary by the company.
4. The facility for joining the meeting shall be opened at least 15 minutes before the time scheduled for the meeting and close after 15 minutes of expiry of scheduled time of the meeting.
5. The Company shall ensure that meeting through VC or OAVM allows two way teleconferencing or webex for the ease of participation of the members and the participants are allowed to ask questions or given time to ask questions in advance on email address of the Company.
[Webex is a software suggested by Ministry itself. The Companies may use Zoom, Skype or any other related software for providing VC or OAVM facility.]
6. The Facility must have a capacityto allow at least 1,000 members to participate on the First-cum-First-serve basis.
7. The shareholders holding 2% or more shareholding, promoters, KMPs, Chairpersons of Audit Committee and Nomination & Remuneration Committee etc. may be allowed to attend the meeting without restrictions.
8. Chairperson: As specified in Articles of Association (AOA) of the Company. If AOA does not specify the name of Chairperson then-
- Where there are <50 members present : Chairperson appointed as per Section 104 of the Act;
- In all other case : Appointed by Poll conducted through e-voting.
9. Attendance of members through VC or OAVM shall be counted for quorum u/s 103 of the Act.
10. Proxies u/s 105 of the Act are not allowed to be appointed for the meeting held under this Framework. However, representative of the members u/s 112 & 113 of the Act are allowed to be appointed for the purpose of voting through remote e-voting or for participation in the meeting through VC or OAVM.
11. Participation of at least One Independent Director (Where the Company has Independent Directors) and the Auditors or his representative is mandatory for holding meeting through VC or OAVM.
12. 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 bank account, then the company shall upon normalization of the postal services, dispatch the dividend warrant / cheque to such shareholder by post.
13. In case the Company has received permission from relevant authorities to conduct AGM at its Registered Office, or at any other place as provided under section 96 of the Act, then the Company in addition to holding such meeting with physical presence of some members shall also provide the facility of VC or OAVM so as to allow other members of the company to participate in such meeting.
14. 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 counted in Quorum.
15. All resolutions shall continue to be passed through the e-voting facility.
B. For Companies not required to provide e-voting facility-
1. The Company can conduct AGM through VC or OAVM Facility only when it has the email addresses of at least half of its total number of members:-
| a. | In case of Nidhi Companies | Who hold shares of more than Rs. 1,000/- in face value or more than 1% of the total paid-up share capital, whichever is less |
| b. | In case of other Companies having Share Capital | Who represent not less than 75% 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 75% of the total voting power exercisable at the meeting |
2. 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.
3. The Notice of Holding AGM shall be dispatched to members only through e-mails registered with the Company or Depository Participant;
4. The copies of financial statements including Board’s report, Auditor’s report or other documents required to be attached therewith, shall be sent only by email to the members, trustees for the debenture-holders, and to all other persons so entitled;
5. The facility for joining the meeting shall be opened at least 15 minutes before the time scheduled for the meeting and close after 15 minutes of expiry of scheduled time of the meeting.
6. The Company shall ensure that meeting through VC or OAVM allows two way teleconferencing or webex for the ease of participation of the members and the participants are allowed to ask questions or given time to ask questions in advance on email address of the Company.
[Webex is a software suggested by Ministry itself. The Companies may use Zoom, Skype or any other related software for providing VC or OAVM facility.]
7. The Facility must have a capacityto allow at least 500 members or equlat to the total number of members of the Company, whichever is lower, to participate on the First-cum-First-serve basis.
8. The shareholders holding 2% or more shareholding, promoters, KMPs, Chairpersons of Audit Committee and Nomination & Remuneration Committee etc. may be allowed to attend the meeting without restrictions.
9. Chairperson: As specified in Articles of Association (AOA) of the Company. If AOA does not specify the name of Chairperson then-
-
- Where there are <50 members present : Chairperson appointed as per Section 104 of the Act;
- In all other case : Appointed by Poll conducted through e-voting.
10. Attendance of members through VC or OAVM shall be counted for quorum u/s 103 of the Act.
11. Participation of at least One Independent Director (Where the Company has Independent Directors) and the Auditors or his representative is mandatory for holding meeting through VC or OAVM.
12. Proxies u/s 105 of the Act are not allowed to be appointed for the meeting held under this Framework. However, representative of the members u/s 112 & 113 of the Act are allowed to be appointed for the purpose of voting through remote e-voting or for participation in the meeting through VC or OAVM.
13. Where the Company has Institutional Investors as its Member, they must be encouraged to attend and vote in the said meeting through VC or OAVM.
14. In case the Poll is required to be taken, the Company shall provide a designated email address to all members at the time of sending the notice of meeting so that the members can convey their vote.
15. During the meeting held through VC or OAVM facility, where a poll on any item is demanded, teh members shall cast their vote on such resolution only by sending emails through their email address registered with the Company.
Any member voted through any other email id not registered with Company, such vote shall be considered as Invalid.
16. Voting on Resolution(s):
-
- Where <50 members present : Voting by show of hands unless poll demanded
- Where >50 members present : Voting by poll through e-mail as stated in clause 15 above
17. 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 bank account, then the company shall upon normalization of the postal services, dispatch the dividend warrant / cheque to such shareholder by post.
18. 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.
[This clause is applicable only for those companies who are declaring final dividend at their AGM.]
Message form Author:
The applicability of holding Annual General Meeting of every Company is specified u/s 96 of the Companies Act, 2013, which doesn’t have any provision regarding holding / participation of AGM through VC or OAVM. This Circular giving framework about conducting the AGM through VC or OAVM facilities under the current situation of COVID – 19 and the manner/ mode of issuing Notice of to members & issuing advertisement in the News paper is a welcome and timely move from MCA. We did our best to serve you a better service in order to meet your requirements, however, in case of any other query / explanation please feel free to write us.
Author Bio
Our is the registered Society, can we conduct our AGM thru VC and can we have our election thru e-voting.
Kindly clarify.
Dr. M. P. Saravanan,
Secretary
Tpsoh.org