The Ministry of Corporate Affairs issued circular dated 05.05.2020, in order to render clarification on holding of annual general meeting (AGM) vide video conferencing (VC) or other audio-visual means (OAVM). The Ministry already allowed the companies whose financial year ended on 31.12.2019 to hold their AGM by 30.09.2020 vide earlier general circular dated 21.04.2020. In view of continuation of restrictions on the movement of persons at several places in the country the Ministry decided to allow companies to hold their annual general meeting by VC or OAVM during the calendar year 2020. The Companies must fulfill the following requirements:

  1. For companies which are required to provide the facility of e-voting under the Act, or any other company which has opted for such facility:
  • The framework provided in para 3- A of EGM Circular dated 08.04.2020 and the manner and mode of issuing notices provided in sub para (i) A of EGM Circular dated 13.04.2020 would be applicable mutatis muntadis for conducting the AGM.
  • In such meetings other that ordinary business only those items of special business, which are considered to be unavoidable by the Board may be transacted.
  • The documents such as copies of financial statements (including Board’s report, Auditor’s report or other documents required to be attached) such statements shall be sent only by email to the members, trustees for debenture-holder of any debentures issued by the company and to all other persons entitled.
  • The companies must publish public notice by way of advertisement at least once in a vernacular newspaper in principal vernacular language and at least once in English language in English newspaper having wide circulation in district, preferably both newspapers having electronic edition  about the details inter alia (mention few details like date and time of AGM etc.) of the meeting before sending the notice and copies of the financial statements etc.

 

  • In case the company is unable to pay the dividend to any shareholder by electronic mode due to lack of bank details, the company after the normalization of the postal services dispatch the dividend warrant warrant/cheque to such shareholder by post.
  • The company who received the permission from the relevant authorities to conduct its AGM at its registered place or at any other place as prescribed under section 96 of the Companies Act in compliance of all the advisory issued by the authorities the company may in addition to holding such meeting with physical presence of some members also provide the facility of VC or OAVM in order to allow other members of the company to attend the meeting. The members who attended meeting either physically or virtually shall be reckoned as quorum under section 103 the Companies Act. All resolutions will continue to be passed through the facility of e-voting system.
  1. For companies which are not required to provide the facility of e-voting under the Act:
  • The AGM may be conducted through the facility of VC or OAVM only those company which has in its records, the email addresses of at least half of its total members who:
  1. In case of Nidhi, hold shares of more than 1000/- Rupees 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, who represent not less than 75% of such part of paid-up share capital of the company as gives a right to vote at the meeting.
  3. In case of companies not having share capital, who have right to exercise not less than 75%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.
  • The framework provided circular dated 08.04.2020 and 13.04.2020 will be applicable mutatis mutatis for conducting the AGM.
  • In such meetings, other than ordinary business only those items of special business which are unavoidable by the Board may be transacted.
  • The financial statements (including Board’s report, Auditor’s report or other documents required to be attached) such statements will 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.
  • The companies shall make adequate provisions for allowing the members to give their mandate for receiving dividends directly in their bank accounts through Electronic Clearing Service (ECS) or any other means.
  • The companies abovementioned must ensure that all other compliances associated with the provisions relating to general meeting are to be made vide electronic mode. In absence of bank account details of the shareholders, the company on normalization of postal service shall dispatch the dividend warrant/cheque to such shareholder by post.
  • The Companies which are not covered under circular dated 21.04.2020 and are unable to conduct their AGM in accordance with the framework provided in the Circular are advised to request respective Registrar of the Company by writing an application to provide extension of AGM at suitable time.

 

The step is taken by the Ministry owing to the difficulties in sending physical copies of the financial statements of financial statements along with Board’s reports, Auditor’s report and other documents. The measure are taken to facilitate Companies in conducting their ordinary & special business through AGMs conducted by leveraging the Digital India platforms.

Order:Circular

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