Role & Scope of Chartered Accountant (CA) In Online AGM During Covid -19 ERA

The concept of Annual General Meeting (AGM) has been defined under Section 96 of the Companies Act, 2013. It can be considered as an annual gathering of Directors and Shareholders/members of the Company to discuss the future of the Company and also company’s overall performance is analyzed.

♣ Provisions of Section 96 of Companies Act, 2013 – AGM Related

In case of first AGM of the Company: In case of Subsequent AGM of the Company:
  • not necessary to hold AGM in the year of its incorporation
  • AGM shall be held within a period of 9 months from the date of closing of the first financial year of the company
  • AGM is an Annual Exercise
  • within a period of 6 months, from the date of closing of the financial year

Time Gap between two AGM’s:

Not more than 15 (Annual – 12 months + 3 months extension from ROC) months shall elapsed between two AGM’s.

Grace Period (Extension):

Registrar may, for any special reason, extend the time by a period not exceeding 3 months (additional) – {other than First AGM of the Company.}

Kindly note that:

  • Provisions of Section 96 related to AGM are not applicable to One Person Company (OPC)
  • AGM shall be called during business hours, (between 9 a.m. and 6 p.m.)
  • AGM shall be called on any day that is not a National Holiday
  • shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated
  • AGM of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by all the members in advance

MCA Clarification on Holding of Digital AGM through VC Or OAVM – Not Physical

Ministry of Corporate Affairs (MCA) vide General Circular No. 20/2020 dated 05th May, 2020 has allowed certain classes of companies to conduct their Annual General Meeting (AGM) through video conferencing (VC) or other audio-visual means (OAVM), during the calendar year 2020.

There will be no place of meeting, since all the participants will be joining the meeting through VC or OAVM.

Scope of Chartered Accountants (CA’s)

1. Appointment as Statutory Auditor

2. Re-appointment as Statutory Auditor

3. Statutory Audit

4. Limited Review Reports

5. Internal Audit Reports

6. Reporting of Frauds

7. Risk Management Framework

8. Internal control framework

9. Financial Due Diligence

10. Maintenance of Financial Records

11. Preparation of financial statements

12. Tax Returns and Tax Management

13. Investigations while preparation of Annual Report

14. Valuation

Role of Chartered Accountants (CA’s) in online AGM

1. Receiving of Notice of AGM:

The Notice and accompanying documents shall be sent at the e-mail addresses provided by Auditors to the company, if being sent by electronic means.

2. Online Presence during AGM:

The Auditors, unless exempted by the company, shall, either by them selves or through their authorized representative, attend the General Meetings of the company and shall have the right to be heard at such Meetings on that part of the business which concerns them as Auditors.

3. Reply to Shareholders Query as statutory Auditor:

Reply to any query that may be raised or provide any explanation that may be sought by the Members of the Company.

4. Made Auditor’s Report available for inspection

5. Reading of qualifications, observations or comments or other remarks on the financial transactions or matters which have any adverse effect on the functioning of the company, as mentioned in the report of the Auditors.

6. Appointment / Re-appointment of the Auditors:

The Company is required appoint / re-appoint Statutory Auditors of the Company in the AGM of the Company.

Kindly note that:The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018.

  • Key Auditor’s Responsibilities for the Audit

1. Identify and assess the risk of material misstatement of the financial statements

2. Obtain an understanding of Internal Controls relevant to the Audit

3. Design Audit procedures

4. Check adequacy of internal financial controls system

5. Evaluation of appropriateness of Accounting Policies

6. Check reasonableness of accounting estimates and related disclosures

7. Conclude on the appropriateness of Management’s and Board of Director’s

8. Evaluate the overall presentation, structure and content of the Financial statements

And many other…………….

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Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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February 2024