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CONTENTS
OF THE ARTICLE:
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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)
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HOLDING
OF ANNUAL GENERAL MEETING THROUGH VIDEO CONFERENCING
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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.
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PROVISION RELATED TO HOLDING OF AGM, (SECTION 96 OF COMPANIES ACT,
2013)
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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
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5
members personally present
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1001-5000
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15
members personally present
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More
than 5000
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30
members personally present
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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)
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Time:
·
Commencement
of AGM
·
End
of Meeting
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-Business
hours i.e. between 9 a.m. to 6 p.m.
-No
restriction
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Date:
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Any
day including Sunday & public holiday but not on a National Holiday
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Venue:
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·
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.
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A SUMMARY OF CIRCULAR ISSUED BY MCA FOR HOLDING AGM
IS OUTLINED HEREUNDER
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Sl.
No.
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Contents
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(A)
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(B)
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For companies which are required to provide the facility of e-voting
or any other company which has opted for such facility
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For companies which are not required to provide the facility of
e-voting
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AI.1
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Record
of transcript
(Para
3A of EGM Circular -I)
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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.
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AI.2
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Facilities
to be provided and other points to be kept in mind before scheduling the
meeting
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·
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
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AI.3
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Required
capacity to avail such facilities:
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Such
facility must have a capacity to allow at least 1000 members to
participate on a first-come-first-served basis.
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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.
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AI.3
(a)
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Exclusions
from first-come-first-served principle:
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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.
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AI.4
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Time
limit for joining of Members in the meeting?
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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.
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AI.5
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How
to conduct remote voting?
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· 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
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· 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.
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AI.6
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Who
are allowed to vote at the meeting?
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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.
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All members who have joined the meeting through VC or OAVM.
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AI.7
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Quorum
of general meeting
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Attendance of members through VC or OAVM shall be counted for the purpose
of reckoning the quorum under section 103 of the Act.
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AI.8
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Appointment
of Chairman
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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.
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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.
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AI.9.
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How
voting will be done?
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· 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
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If
number of present is less than 50, then by way of show of hands unless poll
is demanded.
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AI.10
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Appointment
of proxy for such meetings:
Appointment
of a representative:
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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
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AI.11
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Mandatory
presence director and the auditor:
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· 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.
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AI.12
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Attendance
of the Institutional Investors:
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Where institutional investors are members of a company, they must be
encouraged to attend and vote in the meeting through VC or OAVM.
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AI.13
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How notice for such meetings will be
sent?
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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
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AI.14
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Mode
of Issuing Notice:
(sub-para
(i) of A & B of EGM Circurlar - ll)
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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.
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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.
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AI.15
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Filing
of Resolution under this mechanism
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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
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AII &
BIV
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Business
to be transacted in AGM through VC/OAVM:
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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.
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A III &
BV
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Dispatch of physical
copies of the financial statements (including Board’s report, Auditor’s
report etc:
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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.
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AIV
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Covered under Point 14 above
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AV
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Payment of Dividend
whose Bank details are not updated:
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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. |
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AVI
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What if a company has received
permission to hold AGM at its registered office?
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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.
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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.
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4
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What is the due care in
the process of holding AGM through VC/OAVM?
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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 |
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5
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What are the other way
to hold AGM?
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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.
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Other
Points:
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6
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How to ensure attendance of genuine members?
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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.
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7
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How poll will be undertaken at the meeting
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Not applicable
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Ø Poll will take place by way of email.
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Ø The company shall provide a designated email address to all members at
the time of sending the notice of meeting;
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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;
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Ø Due safeguards with regard to authenticity of email address(es) and
other details of the members shall also be taken by the company;
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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;
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Ø In case the counting of votes requires time, the said meeting may be
adjourned and called later to declare the result.
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8
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Whether ballot paper is required to be provided?
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No, since e-voting will take place in meeting, in case poll is required.
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Ø While the poll is being conducted through email but to avoid any
confusion, ballot paper shall be provided to the shareholders.
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Ø The Chairman shall regulate the process of poll through email.
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9
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Whether in case of poll through email, procedure prescribed in Section
109 read with Rules to be followed?
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NA
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Ø The Circular mentions that poll can be demanded in accordance with
Section 109 but prescribes a new method for conducting the same.
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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.
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Ø But Chairman should ensure transparency of the entire process.
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10
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Applicability / Which Company can hold its AGM through VC or
OAVM?
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All companies which are required to provide the facility of
e-voting or any other company which has opted for such facility.
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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:
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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)
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.
