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May 6, 2020

FAQs on Holding AGM Through Video Conferencing or Other Audio Visual Means

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In view of the continuing restrictions on the movement of persons at several places in the country, MCA vide circular no. 20/2020, dated 5th 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.

MCA has prescribed certain additional guidelines, which a company needs to follow to hold AGM through VC or OAVM in addition to those issued by it vide circulars No 14/2020 dated 08th April, 2020 and No. 17/2020 dated April 13, 2020 respectively for holding extra-ordinary general meeting through VC or OAVM.

A summary of guidelines issued by MCA for holding AGM is outlined below in form of FAQs:

  For companies which are required to provide the facility of e-voting or any other company which has opted for such facility For companies which are not required to provide the facility of e-voting
Which type of companies can hold its AGM through VC or OAVM? All companies which are required to provide the facility of e-voting or any other company which has opted for such facility. Company which has in its records, the email addresses of at least half of its total number of members, who:

  • in case of a Nidhi, 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;
  • 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;
  • 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.
Whether special business can be transacted in AGM through VC/OAVM? In such meetings, other than ordinary business, only those items of special business, which are considered to be unavoidable by the Board, may be transacted.
How physical copies of the financial statements (including Board’s report, Auditor’s report etc.) shall be sent? Such statements along with notice of meeting 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 to receive the same under the Act.
How can a company pay dividend to its shareholders? 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.
What is the due care in the process of holding AGM through VC/OAVM? The companies 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 AOA of the company are made through electronic mode.
What are the other way to hold AGM? The companies (other than companies whose financial year ended on December 31, 2020 and who are allowed to hold AGM upto 30th September, 2020) which are unable to conduct their AGM in accordance with the framework provided in this Circular are advised to prefer applications for seeking extension of time for holding AGM at a suitable point of time before the concerned Registrar of Companies under section 96 of the Act.
Whether the recorded transcript should be available on the website of 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.
What should be kept in mind before scheduling the meeting? Convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting.
What facilities should be provided through VC or OAVM?
  • To ensure that such meeting 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 submit questions in advance on the e-mail address of the company.
What should be the capacity to avail such facilities? Such facility must have a capacity to allow at least 1000 members to participate on a first-come-first-served basis. 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 lower) to participate on a first-come-first-served basis.
How notice for such meetings will be sent? Before sending the notices and copies of the 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.-

  • statement that the AGM will be convened through VC or OAVM in compliance with applicable provisions of the Act read with this read with Circular no. 14/2020, dated 08th April, 2020, Circular no. 17/2020, dated 13th April, 2020 and Circular no. 20/2020, dated 5th May, 2020;
  • the date and time of the AGM thorough VC or OAVM;
  • availability of notice of the meeting on the website of the company and the stock exchange, in case of a listed company;
  • 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;
  • the manner in which the persons who have not registered their email addresses with the company can get the same registered with the company;
  • the manner in which the members can give their mandate for receiving dividends directly in their bank accounts through the Electronic Clearing Services (ECS) or any other means;
  • any other details considered necessary by the company.

Further the Chairman of the meeting shall satisfy himself and cause to record the same before considering the business in the meeting that all efforts feasible under the circumstances have indeed been made by the company to enable  to participate and vote on the items being considered in the meeting.
  • Notice to members can be sent through email, where the same is available.
  • A copy of the notice shall also be prominently displayed on the website, if any, of the company.
  • The company contact all those members whose e-mail addresses are not registered with the company over telephone or any other mode of communication for registration of their e-mail addresses before sending the notice for meeting to all its members; or
  • Where the contact details of any of members are not available with the company or could not be obtained, 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 wide circulation in that district, and at least once in English language in an English newspaper having a wide circulation in that district and specifying in the advertisement the following information:
  • That the company intends to convene an AGM in compliance with applicable provisions of the Act read with Circular no. 14/2020, dated 08th April, 2020, Circular no. 17/2020, dated 13th April, 2020 and Circular no. 20/2020, dated 5th May, 2020   and for the said purpose it proposes to send notice to all its members by e-mail after at least 3 days from the date of publication of the public notice;
  • the details of the e-mail address along with a telephone number on which the members may contact for getting their e-mail addresses registered for participation and voting in the AGM.

Further the Chairman of the meeting shall satisfy himself and cause to record the same before considering the business in the meeting that all efforts feasible under the circumstances have indeed been made by the company to enable to participate and vote on the items being considered in the meeting.
What will be the place of meeting convened through VC or OAVM? There will be no place of meeting, since all the participants will be joining the meeting through VC or OAVM.
Is there any exclusions from first-come-first-served principle? The following persons are excluded from first-come-first-served principle:

  • 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.
Upto what time members can join 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.
How attendance of genuine members can be ensured? Companies should try to avail VC or OAVM facilities which provide unique password to each member for joining the meeting. In case of closely held companies, common password can be adopted, since all the members are known.
How to reckon the quorum of general meeting? Attendance of members through VC or OAVM shall be counted for the purpose of reckoning the quorum under section 103 of the Act.
What if a company can hold AGM at its registered office ?
  • In case, the company has received the permission from the relevant authorities to conduct its AGM at its registered office, or at any other place as provided under section 96 of the Act, after following any advisories issued from such authorities, the company may hold such meeting and additionally may also provide the facility of VC or OAVM, so as to allow other members of the company to participate in such meeting.
  • 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 reckoned for the purpose of quorum under section 103 of the Act. All resolutions shall continue to be passed through the facility of e-voting system.
 While no such option has been provided for companies which don’t have to mandatorily provide for e-voting facility in the Circular but if necessary permission has been received from authorities and where all the members can participate , such a company can hold the meeting physically with presence of all members.
How voting will be done?
  • Before the actual date of the meeting, the facility of remote e-voting shall be provided in accordance with the Act and the rules.
  • During the meeting by e-voting.
  • During the meeting
    • If number of present is less than 50, then by way of show of hands unless poll is demanded
    • In all other cases, by poll.

 
How poll will be undertaken at the meeting Not applicable
  • Poll will take place by way of email.
  • The company shall provide a designated email address to all members at the time of sending the notice of meeting;
  • 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;
  • During the meeting, 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 whish are registered with the company. The said emails shall only be sent to the designated email address circulated by the company in advance;
  • In case the counting of votes requires time, the said meeting may be adjourned and called later to declare the result.
Whether ballot paper is required to be provided? No, since e-voting will take place in meeting, in case poll is required. While the poll is being conducted through email but to avoid any confusion, ballot paper shall be provided to the shareholders.
The Chairman shall regulate the process of poll through email.
Who can vote at the meeting Only those members, who are present in the meeting through VC or OAVM and have not cast their vote on resolutions through remote e-voting and are otherwise not barred from doing so, shall be allowed to vote through e-voting system or by a show of hands in the meeting. All members who have joined the meeting through VC or OAVM.
Whether we need to publish advertisement for e-voting All formalities for conducting e-voting as provided in Section 108 read with rules is required to be undertaken. NA
How to appoint Chairperson of the meeting? Chairperson shall be as per AOA. If such Chairperson is not available the Chairperson for the meeting shall be appointed in the following manner:

  • Where there are less than 50 members present at the meeting, the Chairperson shall be appointed in accordance with Section 104 of the Act;
  • In all other cases, the Chairperson shall be appointed by an e-voting.
 Chairperson shall be as per AOA. If such Chairperson is not available the Chairperson for the meeting shall be appointed in the following manner:

  • Where there are less than 50 members present at the meeting, the Chairperson shall be appointed in accordance with Section 104 of the Act;
  • In all other cases, the Chairperson shall be appointed by poll through email.
Whether a person can appoint his proxy for such meetings? The facility of appointment of proxies by members will not be available for such meeting.
Whether a person can be appointed as a representative of body corporates etc.? In pursuance of sections 112 and 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.
Such authorization if not already provided, can be shared with the Company through electronic mode
Is it require mandatory to attend the meeting by independent director and the auditor? At least one independent director (where the company is required to appoint), and the auditor or his authorized representative, who is qualified to be the auditor shall attend such meeting through VC or OAVM.
Further additionally the presence of chairman of various committee of the Board as required under the Act in the AGM shall continue to apply to AGM through VC or OAVM.
Is it require mandatory to attend the meeting by institutional investors? Where institutional investors are members of a company, they must be encouraged to attend and vote in the meeting through VC or OAVM.
Whether the resolution passed in the meeting needs to be filed with the Registrar? All resolutions passed (whether ordinary or special) 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 in the MCA Circular dated 08th April, 2020 alongwith other provisions of the Act and rules were duly complied with during such meeting.

Click here to view AGM Circular
Click here to view EGM Circular-I
Click here to view EGM Circular-II

AUTHORED BY

Mr. Ankit Singhi

Head Corporate Affairs & Compliances

ACS, LLB

ankit@indiacp.com

+91 11 40622208

Mr. Nitesh Latwal

Associate Partner

FCS, LLB

nitesh@indiacp.com

+91 11 40622249

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