Holding of Annual General Meeting Through Video Conferencing

CONTENTS OF THE ARTICLE:

      Provision related to Holding of AGM (Section 96 of Companies Act, 2013)

      Provision related to Holding of AGM as per Secretarial Standard

      A point wise summary of Circular issued by MCA for holding AGM

(AGM Circular dated 05.05.2020, EGM Circular-I dated 08.04.2020 and EGM Circular-II dated 13.04.2020)

HOLDING OF ANNUAL GENERAL MEETING THROUGH VIDEO CONFERENCING

In view of the continuing restrictions on the movement of persons at several places in the country, MCA has allowed Companies to conduct their Annual General Meeting (AGM) through video conferencing (VC) or other audio-visual means (OAVM), during the calendar year 2020 subject to the fulfilment of following requirements vide circular no. 20/2020, dated 5th May, 2020.

These are 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 (EGM Circular -I) and No. 17/2020 dated April 13, 2020 (EGM Circular -II) respectively for holding extra-ordinary general meeting through VC or OAVM.

PROVISION RELATED TO HOLDING OF AGM, (SECTION 96 OF COMPANIES ACT, 2013)

Annual general meeting is to be held annually by every company except One Person Company (as it has only one member).

·         First AGM :- within the period of 9 months from the end of first financial year.

·         Subsequent AGM :- within the period of 6 months from the end of each financial year and following secretarial standards.

Secretarial Standard [SS-2] specifies that the subsequent Annual General Meeting should be held on the earliest of the following dates:

a)    fifteen months from the date of the last Annual General Meeting; or

b)    The last day of the calendar year; or

c)    six months from the close of the financial year. The gap between two AGM shall not exceed 15 months.

Quorum of the Meeting:

                  Private Company: 2 members personally present, unless AOA provides for a

larger number.

                  Public Company: (unless AOA provides for a larger number)

Upto 1000 members	5 members personally present
1001-5000	15 members personally present
More than 5000	30 members personally present

                  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.

Time/date/venue for AGM (Analysis of Sec 96 & SS-2)

Time: ·         Commencement of AGM ·         End of Meeting	-Business hours i.e. between 9 a.m. to 6 p.m. -No restriction
Date:	Any day including Sunday & public holiday but not on a National Holiday
Venue:	·         At the registered office of the company; or ·         At any place in the city, town or village where registered office of the company is situated; or ·         For an Unlisted Company:  At any place in India provided consent of all of its members is taken in advance either by writing or by electronic mode.

A SUMMARY OF CIRCULAR ISSUED BY MCA FOR HOLDING AGM IS OUTLINED HEREUNDER

Sl. No.	Contents	(A)		(B)
		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
AI.1	Record of transcript (Para 3A of EGM Circular -I)	Record of transcript shall be in safe custody 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.
AI.2	Facilities to be provided and other points to 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. ·         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
AI.3	Required 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.
AI.3 (a)	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.
AI.4	Time limit for joining of Members in 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.
AI.5	How to conduct remote voting?	·      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			·      During the meeting ·      If number present is less than 50, then by way of show of hands unless poll is demanded ·      In all other cases, by poll.
AI.6	Who are allowed to  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.
AI.7	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.
AI.8	Appointment of Chairman	As per AOA, else : ·      In case less than 50 members are present at the meeting:-      Chairman shall be appointed in accordance with Section 104 of the Act. ·      In all other cases, the Chairman shall be appointed by a poll conducted through the e-voting system during the meeting.			As per AOA, else : ·           In case less than 50 members are present at the meeting:- Chairman shall be appointed in accordance with Section 104 of the Act. ·           In all other cases, the Chairperson shall be appointed by poll through email.
AI.9.	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			If number of present is less than 50, then by way of show of hands unless poll is demanded.
AI.10	Appointment of proxy for such meetings: Appointment of a representative:	Not required The facility of appointment of proxies by members will not be available for such meeting. 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
AI.11	Mandatory presence 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.
AI.12	Attendance of  the 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.
AI.13	How notice for such meetings will be sent?	v    The notice shall make disclosure with regard to the manner in which framework provided in the Circulars shall be available for use by the members and also contain clear instructions on how to access and participate in the meeting. v    The Company should provide a helpline number through the RTA, technology provider or otherwise for those shareholders who need assistance with using the technology before or during the meeting v    A copy of the notice shall also be prominently displayed on the website, if any, of the Company. v    May make due intimation to Stock Exchange, if Listed
AI.14	Mode of Issuing Notice: (sub-para (i) of A & B of EGM Circurlar - ll)	v    Notice shall be sent ONLY THROUGH EMAILS registered with the Company or with the Depository / DP. v    Before sending notice of AGM, newspaper publication to be made 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 at least once in English language in an English newspaper having a wide circulation in that district, preferably both newspapers having electronic editions, containing the following: a)  A statement that the AGM will be convened through VC or OAVM in compliance with applicable provisions of the Act read with various Circulars issued in this regard: 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 members holding shares in physical form or 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 for receiving dividends directly in their bank accounts through the Electronic Clearing Service (ECS) or any other means; g)  any other detail considered necessary by the company However, SEBI has extended the relaxation from publication of advertisements in the newspapers for all events scheduled till June 30, 2020. (SEBI Circular dated 12.05.2020) v    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 members to participate and vote on the items being considered in the meeting.				v  Notice shall be sent ONLY THROUGH EMAILS registered with the Company or with the Depository / DP. v  A copy of the notice shall also be prominently displayed on the website, if any, of the company. v  The company shall: a)    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 b)    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: Ø That the company intends to convene an AGM in compliance with applicable provisions of the Act read with Circular no. 14/2020, 08.04.2020, and 17/2020, 13.04.2020 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; Ø 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. v  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 members to participate and vote on the items being considered in the meeting.
AI.15	Filing of Resolution under this mechanism	All resolutions passed (whether ordinary or special) in accordance with this mechanism shall be filed With ROC within 60 Days of the meeting indicating about this mechanism
AII & BIV	Business to 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.
A III & BV	Dispatch of physical copies of the financial statements (including Board’s report, Auditor’s report etc:	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.
AIV	Covered under Point 14 above
AV	Payment of Dividend whose Bank details are not updated:		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.
AVI	What if a company has received permission to hold AGM at its registered office?		Ø  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. Ø  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.
4	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 as provided in the Act and AOA of the company are made through electronic mode viz       making of disclosures,       inspection of related documents / registers by members, or       authorizations for voting by bodies corporate, etc
5	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.

Other Points:

6	How to ensure attendance of genuine members?	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.
7	How poll will be undertaken at the meeting	Not applicable	Ø  Poll will take place by way of email.
			Ø  The company shall provide a designated email address to all members at the time of sending the notice of meeting;
			Ø  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;
			Ø  Due safeguards with regard to authenticity of email address(es) and other details of the members shall also be taken by the company;
			Ø  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;
			Ø  In case the counting of votes requires time, the said meeting may be adjourned and called later to declare the result.
8	Whether ballot paper is required to be provided?	No, since e-voting will take place in meeting, in case poll is required.	Ø  While the poll is being conducted through email but to avoid any confusion, ballot paper shall be provided to the shareholders.
			Ø  The Chairman shall regulate the process of poll through email.
9	Whether in case of poll through email, procedure prescribed in Section 109 read with Rules to be followed?	NA	Ø  The Circular mentions that poll can be demanded in accordance with Section 109 but prescribes a new method for conducting the same.
			Ø  So, provisions of Section 109 read with rules, so far as they provide for procedural requirement shall not apply but in case number of the members are too many, then in such case, to ensure transparency, a company can appoint scrutinizer and follow the procedure under Section 109.
			Ø  But Chairman should ensure transparency of the entire process.
10	Applicability / Which Company 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: Ø    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; Ø    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; Ø    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. which has in its records, the email addresses of at least half of its total number of members, who:

Click here for AGM Circular (05.05.2020)

Click here for EGM Circular-I (08.04.2020)

Click here for EGM Circular-II (13.04.2020)

Regards,

CS Ravi Garg

(Company Secretary & Compliance Officer)

E-mail : csravi2014@gmail.com

Mob.: +91-7838 20 4665

Disclaimer:

IN NO EVENT THE AUTHOR SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS INFORMATION.