EGM and AGM through Video Conference (VC) or Other Audio Visual Means (OAVM) under COmpanies Act, 2013

“The Show must Go On ….”

Yes, MCA has made it clear that neither India nor Indian Corporate will stop due to COVID-19 and the show will go on….

 As we know that as per Section 96 of the Companies Act, 2013, every Company must hold its Annual General Meeting once in a year wherein the main purpose is to adopt the Audited Accounts and to know the status and progress of the Company.

However, current situation created due to COVID-19 doesn’t allow stepping out and public gathering; therefore MCA has allowed conducting shareholders’ Meeting (AGM and EGM) through VC or OAVM.

The Companies are divided in to two Parts as follows

Points PART-A

Companies which are required to provide e-Voting Facility OR Companies which has opted for e-Voting facility (for eg: Listed Companies)

PART-B

Companies which are NOT required to provide e-Voting Facility (for eg: Un-Listed Companies)

Pre-Requisite for conducting AGM through VC/OAVM e-Voting facility, updated email & Contact details of the members etc (I)   AGM may be conducted through VC/OAVM Only by those Companies which has email address of its members in their records – in case of

Companies with Share Capital Companies without Share Capital
Shareholders representing 75% of paid-up capital Holders representing 75% of voting power

In case of “Nidhi” –shareholders holds more than Rs.1000   or 1% whichever is less

(II) The Company shall take all necessary steps to register email address if pending/missing.

Permitted

Agenda

Ordinary Business as well as such other Special Business which are considered as unavoidable. Ordinary Business as well as such Special Business which are considered as unavoidable.
Dispatch of Notice A Company must send Notice of the Meeting only at the registered email address of the shareholder available with the Company/ Depository. A Company must send Notice of the Meeting only at the registered email address of the shareholder available with the Company.
Dispatch of

Annual Report

Dispatch of

  • Financial Statement
  • Board’s Report
  • Auditors Report
  • Other documents Shall be sent ONLY by email.
Dispatch of

  • Financial Statement
  • Board’s Report
  • Auditors Report
  • Other documents Shall be sent ONLY by email.
Notice on

Website

  • The Notice shall be prominently displayed on the website of the Company.
  • Intimation to the stock exchange in case of listed Companies
The Notice shall be prominently displayed on the website of the Company.(if any)
Notice to the members  who has not registered/ updated their email address Before dispatch of Annual Report & Notice of AGM, Company to make public advertisement in minimum 2 newspapers (1 vernacular & 1 English newspaper) preferably both newspaper having electronic edition specify following:

  • AGM will be convened through VC/OAVM in Compliance with MCA Circular, Act & Rules
  • Date & Time of AGM through VC/OAVM
  • Availability of Notice on Company’s website & Stock Exchange.
  • Manner in which the members holding physical shares can cast their vote though e-Voting system during the meeting.
  • Manner in which the members who have not registered their email address can cast their vote though e-Voting system during the meeting.
  • Manner in which members can give mandate for receiving dividend directly in Bank Accounts through ECS/other means.(in case of AGM)
  • Other detail as considered necessary
Company to contact all members whose email address is not registered with the Company through telephone or other mode of communication for registering their email address with the Company.

  • Where no contact no available Company to make public advertisement in minimum 2 newspapers (1 vernacular & 1 English newspaper) preferably both newspaper having electronic edition specify following:
  • That the Company intends to convene a AGM/EGM as per MCA Circular, the Act & Rules and proposes to send notice to all its members by email
  • Invite members to update their email address & telephone number on Company’s designated email address for participating in AGM/EGM.
Dividend Dividend is to be paid through ECS mode; however in case in absence of Bank details of the members registered with the Company, the Dividend shall be paid through warrant upon normalization of the postal services. Dividend is to be paid through ECS mode; however in case in absence of Bank details of the members registered with the Company, the Dividend shall be paid through warrant upon normalization of the postal services.
Physical AGM with special permission In case if the Company has obtained special permission to conduct AGM with physical presence of some members, facility of VC/OAVM for other members to participate is must.

Even in such AGM, all resolutions shall continue to pass through e-Voting facility only.

In case if the Company has obtained special permission to conduct AGM with physical presence of some members, facility of VC/OAVM for other members to participate is must.

Voting on all resolution shall be as per Voting mentioned hereinbelow.

Maintenance of Records The recorded transcript SHALL be maintained in safe custody and the recorded transcript shall be made available on the website (if any) of the Company. The recorded transcript SHALL be maintained in safe custody.

However in case of PUBLIC Companies, the recorded transcript shall be made available on the website of the Company.

Time Zone As per Section 96(2) the AGM/EGM can be conducted between business hours (9 am to 6 pm) however, considering difference in time zone (where the Company have large shareholders from different part of the world, convenient time may be selected.

(for the limited purpose of VC AGM/EGM – Large shareholder means a shareholder holding more than 2% of the total paid-up capital of the Company, as mentioned in the MCA Circular)

As per Section 96(2) the AGM/EGM can be conducted between business hours (9 am to 6 pm) however, considering difference in time zone (where the Company have large shareholders from different part of the world, convenient time may be selected.

(for the limited purpose of VC AGM/EGM – Large shareholder means a shareholder holding more than 2% of the total paid-up capital of the Company, as mentioned in the MCA Circular)

Participation The Company must:

  • allow TWO WAY participation.
  • members must be allowed to pose  questions during the meeting OR submit their questions in advance on the designated email address given by the Company
  • minimum capacity of 1000 members to participate on First-come-First -Serve basis.
  • The Rule of First –Come-First – Serve basis shall not apply to :

> Large Shareholders (holding morethan 2% of shareholding),

> Promoters,

> Institutional Investors,

> Directors,

> KMP,

> Chairperson of Audit Committee, NRC and Stakeholders Relationship Committees,

> Auditors

The Company must:

  • allow TWO WAY participation.
  • members must be allowed to pose questions during the meeting OR submit their questions in advance on the designated email address given by the Company
  • Minimum capacity of 500 members or to all members of the Company (whichever is lower) on First-come-First -Serve basis.
  • The Rule of First –Come-First – Serve basis shall not apply to:

> Large Shareholders (holding morethan 2% of shareholding),

> Promoters,

> Institutional Investors,

> Directors,

> KMP,

> Chairperson of Audit Committee, NRC and Stakeholders Relationship Committees,

> Auditors

Presence of Auditor and Independent Director At least One Independent Director (if required to appointment) and Auditor (or his Qualified representative) shall attend the Meeting. At least One Independent Director (if required to appointment) and Auditor (or his Qualified representative) shall attend the Meeting.
Participation of Institutional Investors members The Company must encourage the Institutional Investors members to participate, attend and vote at the meeting. The Company must encourage the Institutional Investors members to participate, attend and vote at the meeting.
Joining Time The Company should allow joining facility at least 15 minutes BEFORE the schedule time of the meeting and shall keep it open till 15 minutes AFTER the scheduled time of the meeting. The Company should allow joining facility at least 15 minutes BEFORE the schedule time of the meeting and shall keep it open till 15 minutes AFTER the scheduled time of the meeting.
Voting
  • e-Voting facility should be allowed in advance as per Section 108 and Rule 20 of Companies (Management & Administration) Rule 2014.
  • those members who are present at the AGM/EGM and have not casted their vote through remote e-Voting shall be allowed to cast their vote through e-Voting system or show of hands at the meeting.

(Important to note that MCA vide circular no 17/2020 dated 13th April 2020 replaced PARA IX of the previous MCA Circular No 14/2020 dated 8th April 2020, however PARA VII has not been replaced/amended yet which allows voting by Show of Hands at the meeting of the Companies which are required to provide e-Voting facility.)

In case of unlisted Companies where less than 50 members are present in a meeting, the Chairman may decide Voting by Show of Hands unless Poll is demanded.
 Demand for Poll Where poll is demanded, the process of Poll shall be conducted through e-Voting system available during the meeting.
  • While sending Notice of AGM/EGM, the Company shall provide a designated email address so that members can convey their vote, when Poll is demanded during the meeting on any resolution.
  • The confidentiality, password due safeguard and other privacy shall be strictly maintained by the Company.
  • During the AGM/EGM, when Poll is demanded, members to cast their vote by sending email through their registered email id only to the Company’s designated email address. (The email can be sent during the meeting, only when the Poll is demanded)
  • In case of counting of votes requires time, the said AGM/EGM may be adjourned and called later to declare the result.
  • MCA clarified on 13th April 2020 that when Poll is demanded, the members can cast vote ONLY during the meeting and CANNOT SEND their assent/dissent in ADVANCE.
Quorum Members participated through VC/OAVM shall be counted for the purpose of quorum as per Section 103 of the Act. Members participated through VC/OAVM shall be counted for the purpose of quorum as per Section 103 of the Act.
Chairman Unless AOA requires any specifies person as Chairman for the meeting, the Chairman can be appointed as follows:

(a)   In case members present are less than 50 – the members shall elect one of themselves to be the Chairman of the meeting.

(b)   In other case, a Chairman shall be appointed by poll conducted through e-Voting system.

Unless AOA requires any specifies person as Chairman for the meeting, the Chairman can be appointed as follows:

(a)   In case members present are less than 50 – the members shall elect one of themselves to be the Chairman of the meeting (as per Section 104 of the Act)

(b)   Where poll is demanded, the Chairman shall be appointed by Poll following the process of Poll as mentioned hereinabove.

Proxy Not Allowed Not Allowed
Representation of Body Corporate Allowed as per Section 112/113 of the Companies Act, 2013 Allowed as per Section 112/113 of the Companies Act, 2013
 

Disclosure in the Notice

 

 

The Notice of AGM/EGM shall have following disclosures:

  • Instruction how to Access and Participate in the meeting.
  • Helpline number through R&T agent,
  • Helpline number of technology provider or otherwise.
  • Manner in the MCA guidelines shall be available for the members.
The Notice of AGM/EGM shall have following disclosures:

  • Instruction how to Access and Participate in the meeting.
  • Helpline number through R&T agent,
  • Helpline number of technology provider or otherwise.
  • Manner in the MCA guidelines shall be available for the members.
Filing with ROC All resolutions passed in AGM/EGM through VC/OAVM shall be filed within 60 days confirming that the Compliance of MCA Notification, Act and Rules were duly complied with during the meeting. All resolutions passed in AGM/EGM through VC/OAVM shall be filed within 60 days confirming that the Compliance of MCA Notification, Act and Rules were duly complied with during the meeting.

DISCLAIMER: The Entire Contents of this document have been prepared on the basis of various circulars issued by MCA recently and based on the relevant provisions and information available at that time and prepared with due accuracy and reliability. But in no event, I will be liable for any damages caused in connection with the use of this information.

Author Bio

Qualification: CS
Company: Sandeep P Parekh & Co
Location: Navi Mumbai, Maharashtra, IN
Member Since: 08 Oct 2019 | Total Posts: 2
CS Sandeep Parekh is a Fellow Company Secretary and founder of SPPC in to practice over 13 years. His expertise lies in Company Law, Secretarial Audit, FEMA, LODR, LLP, Legal Drafting of SHA, SPA etc, Legal Opinion, Business and Legal Advisory on Corporate Law and other areas of Corporate Laws, NCL View Full Profile

My Published Posts

More Under Company Law

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

October 2020
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031