Background:

In view of ongoing Covid-19 outbreak,  Ministry of Corporate Affairs (MCA) has come  up with another relaxations vide Circular no. 20/2020 dated May 05, 2020 (MCA Circular)  to enable Companies to hold their Annual General Meeting (AGM) through Video Conference (VC) or Other Audio Visual Mode (OAVM).

Applicability:

MCA circular dated May 05, 2020 applies to all the Companies which are required to hold their Annual General Meeting (AGM) for Financial Year ended on December 31, 2019 and March 31, 2020, as the case may be, during calendar year 2020.

Scope and pre-conditions:

All companies which are mandatorily required to provide e-voting facility may convene the AGM through VC or OAVM in terms of MCA Circular dated May 05, 2020, however, the companies which are not mandatorily required to provide e-voting facility may convene the AGM through VC or OAVM on satisfying the below listed conditions as may be applicable depending on category of the Company:

S.No. Category of Company Pre-condition for convening the AGM through VC or OAVM

(For companies not required to provide e-voting facility)

1 In case of a Nidhi Company (i) has in its record the email addresses of at least half of its total number of members;

AND

(ii)  holding shares of more than rupees 1,000 in face value or more than 1% of the total paid-up share capital, whichever is less

2 In case of other companies having share capital (i) has in its record the email addresses of at least half of its total number of members;

AND

(ii) 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

3 In case of other companies having share capital (i) has in its record the email addresses of at least half of its total number of members;

AND

(ii) who have the right to exercise not less than 75% of the total voting power exercisable at the meeting

In continuation of above and in addition to compliances of other requirements of the Act, the procedure to be followed pursuant to circulars issued by MCA dated April 8, 2020, April 13, 2020 and May 05, 2020 to conduct AGM through VC or OAVM are as follows:

 

S.

No.

Basis Companies which are required to provide the facility of e-voting under the Act, or any other company which has opted for such facility

 

Companies which are not required to provide the facility of e-voting under the Act
1 Businesses which may be considered at AGM
  • Ordinary business; and
  • Special business which are considered unavoidable by Board, may be transacted
Same
2 Time Zone Convenience of different persons positioned in different time zones shall be Kept in mind before scheduling the meeting.

(However, the AGM should be convened during business hours between 09:00 AM to 06:00 PM (IST) in terms of Section 96 of Companies Act, 2013)

Same
3 Remote E-voting Remote e-voting facility shall be provided in accordance with the act and the rules before the actual date of the meeting. N.A.
4 Sending of

Notice of AGM

Notice to the Members may be given only through email registered with the Company or with depository/ depository participant. Same
5 Applicability of MCA Circular on already served notices In case a notice for AGM  has been served prior to 05.05.2020, the framework proposed in this Circular may be adopted for the meeting by satisfying following conditions:

– By obtaining consent from members in accordance with section 101(1) of the Act; and

– Fresh notice of shorter duration with due disclosures in consonance with this Circular is issued.

Same
6 Placing of Notice of AGM on Website Copy of the meeting notice shall also be prominently displayed on the website, if any, of the company and due intimation may be made to the exchanges in case of a listed company. Copy of the meeting notice shall also be prominently displayed on the website, if any, of the company.
7 Mode of sending Financial statements (including Board’s report, Auditor’s report or other documents required to be attached therewith 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-holder of any debentures issued by the company, and to all other persons so entitled Same
8 Additional information in Notice of  AGM Following points are required to be captured in AGM Notice:

– Disclosures with regard to the manner in which framework provided in MCA Circular shall be available for use by the members;

–  Clear instructions on how to access and participate in the meeting;

– Provide a helpline number through the registrar & transfer agent, technology provider, or otherwise, for those shareholders who need assistance with using the technology before or during the meeting.

Same
9 Publication of Notice in Newspaper Before sending notices and copies of Financial Statements etc., a public notice by way of advertisement be published 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 wide 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 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 this 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;

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 in which the persons who have not registered their email addresses with the company can get the same registered 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;

g.    any other detail considered necessary by the company

NA
10 Registration of Email Address Company shall take all necessary steps to register the email addresses of all persons who have not registered their email addresses with the Company. Company shall take all necessary steps to register the email addresses of all persons who have not registered their email addresses with the Company.
11 Inspection of related documents/registers Company shall ensure that all 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 Same
12 Remote E-voting Remote e-voting facility shall be provided in accordance with the act and the rules before the actual date of the meeting. N.A.
13 Quorum Attendance of members through VC or OAVM shall be counted for the purpose of reckoning the quorum under section 103 of the Act.

If Company has received permission from authorities for holding AGM through physical mode after following any advisories

issued from such authorities, then Company in addition may also provide facility of VC or OAVM. Further, the members physically present and attending the meeting through VC or OAVM facility shall be counted for quorum.

Attendance of members through VC or OAVM shall be counted for the purpose of reckoning the quorum under section 103 of the Act.
14 Proxy If AGM is being convened through VC or OAVM facility only, then Members are not allowed to appoint proxy Same
 

15

Representative of non-individual members Members may appoint their representatives as per Section 112 & 113 of Act for purpose of voting through remote e-voting or voting the VC or OAVM meeting. Same
16 Presence of Independent director At least one independent director (where the company is required to appoint one) shall attend such meeting through VC or OAVM. Same
17 Presence of Auditor Auditor or his authorized representative, who is qualified to be the auditor shall attend such meeting through VC or OAVM. Same
18 Institutional investors members Where institutional investors are members of a company, they must be encouraged to attend and vote in the said meeting through VC or OAVM. Same
19 Teleconference Ensure that VC or OAVM facility allows two way teleconferencing or webex for the ease of participation of the members. Same
20 Posing questions by participants Participants are allowed to pose questions concurrently or given time to submit questions in advance on the e-mail address of the company. Same
21 Minimum participation

facility

VC or OAVM facility must have a capacity to allow at least 1000 members to participate on a first-come-first-served basis.

However, following may be allowed to attend the meeting without restriction on account of first-come first served principle:

–  Large shareholders (i.e. shareholders holding 2% or more shareholding)

–  Promoters

–  Institutional investors,

– Directors;

– Key managerial personnel.

–  Chairpersons of the Audit, Nomination Remuneration, Stakeholder Relationship Committee

– Auditors etc. For ex. Debenture Trustee.

VC or OAVM facility must have a capacity to allow at least 500 members to participate on a first-come-first-served basis.

However, following may be allowed to attend the meeting without restriction on account of first-come first served principle:

–  Large shareholders (i.e. shareholders holding 2% or more shareholding)

– Promoters

– Institutional investors,

– Directors;

– Key managerial personnel.

–         Chairpersons of the Audit, Nomination Remuneration, Stakeholder Relationship Committees.

– Auditors etc. For ex. Debenture Trustee.

22 Timing for Facility for joining the meeting 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. Same
23 Designated Email Address NA Company shall provide a designated Email Address to all members at the time of sending notice of meeting so that member can convey their vote, when a poll is required to be taken during meeting on any resolution.
24 Election of Chairman – Firstly, election of chairman shall be as per Articles of Company; OR

– If  <50 members are present, then chairman shall be appointed as per Section 104 of Act; OR

In all other cases, the Chairman shall be appointed by poll conducted through the e-voting system during meeting.

–  Firstly, election of chairman shall be as per Articles of Company; OR

– If <50 members are present, then chairman shall be appointed as per Section 104 of Act; OR

In all other cases, the Chairman shall be appointed by poll conducted by providing designated email for enabling the members to convey their votes.

25 Manner of Voting The Chairman of the meeting shall ensure that the facility of e-voting system is available for the purpose of voting during the meeting held through VC or OAVM. IF MEMBERS PRESENT ARE LESS THAN 50, THEN VOTING MAY BE CONDUCTED THROUGH:

–  Show of hand at meeting; or

– In case poll is demanded in accordance of Section 109 of the Act, than members shall cast their vote on the resolutions only by sending emails through their email addresses registered with the Company.

IF MEMBERS PRESENT ARE 50 OR MORE, THEN

–  Conduct the voting from members to convey their votes during meeting at such designated email address provided by the Company

(in our view, scrutinizer is required to be appointed in terms of section 109 of Act when the voting is being done by poll)

26 Declaration of result Since e-voting is involved, the result is to be declared as follow:

– In case of unlisted company, within 3 days of conclusion of meeting;

–   In case of listed company, within 48 hours of conclusion of meeting

In case the counting of votes requires time, the said meeting may be adjourned and called later to declare the result.
27 Filing of Shareholder’s Resolution All resolution, whether Ordinary or Special, passed in accordance with this mechanism shall be filed with the ROC within 60 days of the meeting.

At time of filing of resolution, following confirmation should also be filed that:

– Mechanism provided herein along with other provisions of the Act ‘and rules were duly complied with during such meeting.

Same
28 Payment of Dividend If unable to pay dividend due to non-availability of bank details, Company shall dispatch dividend warrant upon normalcy of postal services. Company 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

29 Recorded transcript
  • Recorded transcript of the same shall be maintained in safe custody by the company.
  • In case of a public company, the recorded transcript of the meeting, shall as soon as possible, be also made available on the website (if any) of the company.
Same

The companies which are not covered by the General Circular No. 18/2020, dated 21.04.2020 i.e. Companies which are not required to close their financial year on December 31, 2019 AND are unable to conduct their AGM in accordance with the framework provided in this MCA 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.

It also clarified that above procedure is in addition to any other requirement provided in the Act or the rules made thereunder except exemptions/ modifications given / made by MCA in its circulars.

For original notification please click on the below links:

Title Notification No. Date
MCA clarifies on holding of Digital AGM through VC or OAVM General Circular No. 20/2020 05/05/2020
Companies allowed to hold AGM till 30.09.2020 whose FY ending on 31.12.2019 General Circular No. 18/2020 21/04/2020
MCA further clarifies on passing of ordinary & special resolutions- COVID-19 General Circular No 17/2020 / Press Relase ID No. 1614099 13/04/2020
MCA allows companies to hold EGMs through VC or OAVM General Circular No. 14/2020 08/04/2020

In case of any query/information, please connect us at undersigned.

Abhishek Thakur | Company Secretary | Email: acsabhishekthakur@gmail.com

Author Bio

Qualification: CS
Company: ABHISHEK THAKUR & ASSOCIATES
Location: NOIDA, Uttar Pradesh, IN
Member Since: 11 May 2020 | Total Posts: 1

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