As you know, due to the COVID pandemic situation in the country, there are various difficulties which the companies are facing to conduct their Annual General Meeting (AGM) physically.
MCA has (vide its various circulars) provided relaxation to all the companies to conduct the Annual General Meeting (AGM) of their members through Video Conferencing (VC) or Other Audio Visual Means (OAVM), during the calendar year 2021 which the companies are required to conduct as per Section 96 of the Companies Act, 2013 (the Act), subject to the fulfillment of various requirements discussed hereinafter.
Few points to consider for calling and conducting AGM via VC or OAVM
1. Every AGM shall be called during business hours, that is, between 9 a.m. and 6 p.m. on any day that is not a National Holiday (means and includes a day declared as National Holiday by the Central Government).
2. 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 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. 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.
4. In the AGM, only four Ordinary Business as per Section 102 (2) (a), to be transacted. Items of special business as per Section 102 (2) (b), which are considered to be unavoidable by the Board, may be transacted. To clarify, lf AGM called through VC or OAVM, other than ordinary business, only those items of special business, which are considered to be unavoidable by the Board, may be transacted. Note: How to decide Unavoidable, with the situation or better governance. It is very subjective.
5. Further the entire proceedings of the meeting to be recorded and such recorded transcript shall be maintained in the safe custody by the Company. The public Company to upload the recorded transcript on the website of the Company, if any.
6. While deciding the time for AGM through VC or OAVM, the management shall keep in mind the convenience of different persons positioned in different time zones in the globe. For that reason, the management must know and check the list of its shareholders with their addresses and ensure availability of its Directors, Independent Directors, Nominee Directors and Auditors.
7. The Company to ensure and provide proper teleconferencing facility as follows:
> Arrangement for two-way communication through teleconferencing or webex for the ease of participation by the members and the participants are allowed to pose the question concurrently or given time to submit their questions in advance on the email of the Company; and
> Capability of system of hosting upto 500 members or members equal to the total number of members of the Company, whichever is lower, to participate on first come first serve basis principle. The large Shareholders, holding 2% or more, Promoters, Institutional Investors, Directors, Key Managerial Personnel, Chairperson of Audit Committee, Nomination and Remuneration Committee and Stakeholders and Relationship Committee and the Auditors may be allowed to attend the meeting without restriction of first- come- first- served basis principle.
8. The facility of 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 of the AGM.
9. The Members who attend through VC or OAVM are counted for the purpose of reckoning quorum under Section 103 of the Act.
10. Unless the Articles of Association of the company require any specific person to be appointed as a Chairman for the meeting, the Chairman for the meeting shall be appointed as follows:
> If there are less than 50 members present, the Chairman shall be appointed in accordance with Section 104 of the Act, that is by show of hands ; and
> If there are equal to or more than 50 members present, then the Chairman shall be appointed by a poll conducted through e-voting system during the meeting.
11. At least one Independent Director (where the company is required to appoint) and the Statutory Auditor / Secretarial Auditor or their authorized representative who are also qualified to be the Statutory Auditor / Secretarial Auditor, as the case may, shall attend such meeting through VC or OAVM.
12. Proxies as per section 105 of the Act cannot be appointed for participation in the AGM conducted as per this Circular. However, the Authorized Representative in pursuance of Section 112 and Section 113 of the Act are deemed to be member of the Company and are entitled to exercise same rights and powers as the member could exercise and hence appointment of Authorized Representative for participating in the AGM held through VC or OAVM is allowed.
13. The Company to encourage the Institutional Investors who are members of the Company, to attend and vote in the AGM through VC or OAVM.
14.The Notice for AGM to include a designated email address of the company so that the members can cast their vote through such designated email address, whenever a poll is demanded during the AGM on any resolution.
15. The confidentiality of the password and other privacy issues associated with the designated email address shall be strictly followed by the Company and also due safeguards shall be taken by the Company with respect to authenticity of email address(es) and all the other details of its members.
16. During the AGM through VC or OAVM facility, where a poll on any item is required, in such case the members shall cast their vote on the resolutions only at such stage on items considered in the meeting by sending email to the designated email address circulated by the Company through their email address(es) which are registered with the Company. Such voting is not allowed to be sent by email in advance to the Company before the meeting is actually held through VC or OAVM facility.
17. The Chairman may decide to conduct a vote by show of hands if the members present in the meeting are less than fifty (50). If the demand for poll is made by any member in accordance with Section 109 of the Act then the procedure.
18. The meeting may be adjourned for the purpose of counting votes and be called later to declare the result.
19. The Notice for AGM shall make the following disclosure:
> Detailed manner and framework of conducting the AGM as per this Circular
> How to access the meeting
> How to participate in the meeting
> Helpline number through Registrar & Share Transfer Agents or technology provider or otherwise for the members who need assistance with using the technology before or during the meeting
> Notice of the meeting to be prominently displayed on the website of the Company.
20. If the Notice for AGM has been served prior to 5th May, 2020, being the date of Circular, than the Company with the consent of not less than 95% of members in number who are entitled to vote, issue a fresh Notice with shorter duration.
21. All Resolutions passed in AGM conducted through this mechanism of VC or OAVM shall be filed with the Registrar of Companies within 60 days of meeting, clearly indicating therein that the mechanism provided in this Circular along with other provisions of the Act and Rules were duly complied with during such meeting.
22. The Notice of AGM may be given to the members only through the email registered with the Company or Depository Participants or Depository. Notice of meeting to be displayed on the website of the Company, if any.
23. ln order to ensure that all members are aware that AGM is proposed to be conducted in compliance with the Circulars, it shall do the following:
(a) Contact all its members whose email address are not registered with the Company, over telephone or any other mode of communication for registration of their email address before sending the Notice for AGM to all its members ; or
(b) where the contact details of any of the members are not available with the Company or could not be obtained even after making efforts as above , it shall cause a Public Notice by way of an 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, preferably both newspapers having electronic editions and specifying in the advertisement, the following information:
> that the Company intends to convene AGM through VC or OAVM in compliance with applicable provisions of the Act / Rules and this Circulars and for that purpose the Company 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;
> the details of the e-mail address along with the telephone numbers on which the members may contact for getting their e-mail addresses registered for participation and voting in the AGM.
(c) 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 the members to participate and vote on the items being considered in the meeting.
24. Owing to the difficulties involved in dispatching of physical copies of the financial statements (including Board’s Report, Auditor’s Report or other documents required to be attached therewith), 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.
25. 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.
For any clarifications/suggestions or any queries please write drop a comment or write to us at firstname.lastname@example.org
TEAM SIGMA LEGAL