Holding of Annual General Meeting (AGM) Through Video Conferencing (VC) Or Other Audio Visual Means (OAVM) For Companies Which Are Not Required To Provide The Facility of E-‘Voting Under The Act
AGM through VC Or OAVM by Companies Not Required To Provide Facility of E-‘Voting
Applicability of General Circular No. 20/ 2020 dated May 05, 2020
General Circular No. 20 /2020 dated MAY 05, 2020 is applicable to all companies irrespective of the financial year followed by a company. As per the said General Circular, all companies are permitted to conduct their AGM through video conferencing (VC) or other audio visual means (OAVM), during the calendar year 2020, subject to the fulfillment of the requirements stated in the general circular.
The above mentioned general circular applies to companies and as per Section 2(20) of the Companies Act, 2013, company means a company incorporated under this Act or under any previous company law. As banks are registered under the Banking Regulation Act, 1949 and same are not included within the definition of companies as defined under the Companies Act, 2013, banks will not fall within the ambit of above circular.
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.
Every company which is not required to provide the facility of e-‘voting under the Act, has to satisfy 2 conditions before holding its AGM through VC/ OAVM:
1. In terms of number of members
2. In terms of % of shareholding
PRIOR TO THE MEETING
1. Necessary arrangements to be made for recording the transcript of such meeting. Such transcript to be maintained by the company in safe custody.
In case of a public company, such companies are also required to post the transcript of the website, if any of such company.
2. Convenience of different persons positioned in different time zones to be kept in mind before scheduling the meeting.
3. All care must be taken to ensure that such meeting through VC or OAVM facility allows two way teleconferencing or webex for the ease of participation of the members and the participants are allowed to pose questions concurrently or given time to submit questions in advance on the e-mail address of the company.
a. Such facility must have a capacity to allow at least 500 members or members equal to the total number of members of the company (whichever is tower) to participate on a first-come-first-served basis.
b. The large shareholders (i.e. shareholders holding 2% or more shareholding), promoters, institutional investors, directors. key managerial personnel, the chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, auditors, etc. may be allowed to attend the meeting without restriction on account of first-come-first-served principle.
4. The facility for joining the meeting shall be kept open at least 15 minutes before the time scheduled to start the meeting and shall not be closed till the expiry of 15 minutes after such scheduled time.
In order to ensure that all members are aware that a general meeting is proposed to be conducted through VC/ OAVM the company shall:
1. Contact all those members whose (Email addresses are not registered with the company over telephone or any other mode of communication for registration or their e-mail addresses before sending the notice for meeting to all its members or
2. Where the contact details of any of members are not available with the company or could not be obtained as per (1) above. it shall cause a public notice by way of advertisement to be published immediately 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 circulation in that district. and at least once in English language in an English newspaper having a wide circulation in that district, preferably both newspapers having electronic editions, and specifying in the advertisement following information:
a. That the company intends to convene a general meeting conducted through VC/ OAVM, it proposes to send notices to all its members by e-mail after. at least. 3 days from the date of publication of the public notice
b. The details of the e-mail address along with a telephone number on which the members may contact tor getting their e-mail addresses registered for participation in e- voting in ‘the general meeting.
Mode Dispatch of Notice
In accordance with the provisions of rule 18 of the Companies (Management and Administration) Rules, 2014 (the rules), the notices to members may be given only through e-mails registered with the company or with the depository participant/depository.
A copy of the meeting notice shall also be prominently displayed on the website of the company and due intimation may be made to the exchanges in case of a listed company.
Contents of the Notice
1. The notice for the general meeting shall contain clear instructions on how to access and participate in the meeting. The company shall also provide a helpline number through the registrar and transfer agent. technology provider, or otherwise. for those shareholders who need assistance with using the technology before or during the meeting.
2. That the company is providing facility for voting by electronic means and the business may be transacted through such voting.
3. The notice for the general meeting shall contain clear instructions on how to access and participate in the meeting. The company shall also provide a helpline number through the registrar and transfer agent. technology provider, or otherwise. for those shareholders who need assistance with using the technology before or during the meeting.
4. That the company is providing facility for voting by electronic means and the business may be transacted through such voting.
5. That the facility for voting, either through electronic voting system or ballot or polling paper shall also be made available at the meeting and members attending the meeting who have not already cast their vote by remote e-voting shall be able to exercise their right at the meeting.
6. That the members who have cast their vote by remote-voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again.
7. Indicate the process and manner for voting by electronic means.
8. Indicate the time schedule including the time period during which the votes may be cast by remote e-voting.
9. Provide the details about the login ID.
10. Specify the process and manner for generating or receiving the password and for casting of vote in a secure manner.
11. Specify the process and manner for generating or receiving the password and for casting of vote in a secure manner.
Financial statement and Auditor’s Report
Financial statements (including board’s report, Auditor’s report or other documents required to be attached along with the notice), 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.
DURING THE MEETING
1. Attendance of members through VC or OAVM shall be counted for the purpose of reckoning the quorum under section 103 of the Act.
2. At least one independent director (where the company is required to appoint one), and the auditor or his authorized representative, who is qualified to be the auditor shall attend such meeting through VC or OAVM.
3. Where institutional investors are members of a company, they must be encouraged to attend and vote in the said meeting through VC or OAVM.
Unless the articles of the company require any specific person ‘to be appointed as a Chairman for the meeting, the Chairman for the meeting shall be appointed in the following manner:
a. where there are less than 50 members present at the meeting. the Chairman shall be appointed in accordance with section 104,
b. in all other cases, the Chairman shall be appointed by a poll conducted through the e-voting system during the meeting.
1. 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. when a poll is required to be taken during the meeting on any resolution, at such designated email address.
2. The confidentiality of the password and other privacy issues associated with the designated email address shall be strictly maintained by the company at all times, Due safeguards with regard to authenticity of email address(es) and other details of the members shall also be taken by the company.
3. During the meeting held through VC or OAVM facility, where a poll On any item is required. the members shall cast their vote on the resolutions only by sending emails through their email addresses which are registered with the The said emails shall only be sent to the designated email address circulated by the company in advance.
4. Where less than 50 members are present in a meeting, the Chairman may decide to conduct a vote by show of hands, unless a demand for poll is made by any member in accordance with section 109 of the Act. Once such demand is made, the procedure provided in the preceding sub-paragraphs shall be followed.
5. In case the counting of votes requires time, the said meeting may be adjourned and called later to declare the result.
Proxy: No requirement of appointment of proxies
A proxy is allowed to be appointed under section 105 of the Act to attend and vote at a general meeting on behalf of a member who is not able to attend personally. Since general meetings under this framework will be held through VC or OAVM, where physical attendance of members in any case has been dispensed with, there is no requirement of appointment of proxies. Accordingly, the facility of appointment of proxies by members will not be available for such meetings. However, in pursuance of section 112 and section 113 of the Act, representatives of the members may be appointed for the purpose of voting through remote e-voting or for participation and voting in the meeting held through VC or OAVM.
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.
Issue of Notice Prior to the May 05, 2020
In case a notice for meeting has been served prior to May 05, 2020, the framework proposed in Circular no. 20/2020 may be adopted for the meeting, in case the consent from members has been obtained in accordance with section 101(1) of the Act, and a fresh notice of shorter duration with due disclosures in consonance with this Circular is issued
POST MEETING COMPLIANCES
1. All resolutions passed in accordance with this mechanism shall be filed with the Registrar of Companies within 60 days of the meeting, clearly indicating therein that the mechanism provided herein along with other provisions of the Act and rules were duly complied with during such meeting.
Other compliances associated with the provisions relating to general meetings viz making 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.
Extension of AGM:
The companies which are not covered by the General Circular No. 18/ 2020 dated April 21, 2020 and are unable to conduct their AGM in accordance with the framework 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.
1. The Companies (Management and Administration) Rules, 2014
Rule 20 – Voting Though Electronic Means
Rule 18 – Notice of the Meeting
Team Periwinkles’ | CS Jaya Yadav & Anishi Sharda | Whitespan Advisory
DISCLAIMER: The Entire Contents of this document have been prepared on the basis of 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.