ANNUAL GENERAL MEETING IN YEAR 2020


Annual General Meeting during the year 2020 is not an ordinary affair. This is now recognized by the Ministry of Corporate Affairs. Now, bigger companies are required to facilitate members to present in their Annual General Meeting through Video Conference or other audiovisual means even when holding AGM physically, others have the facility to use hold AGM through VA and OAVM. Circular 20/2020 dated 5th May 2020 extends facility provided by Circulars 14/2020 and 17/2020to hold General Meetings through VA and OAVM to Annual General Meetings.

APPLICABILITY

The companies are now allowed to conduct their AGM through video conferencing (VC) or other audiovisual means (OAVM) during the calendar year 2020, subject to compliance of the requirements of the Circular. [Para 3 of GC-20/2020]

In case of companies which are required to provide or opted to provide e-voting facility holding their AGM physically, these companies may in addition to holding such meeting with the physical presence of some members, also provide the facility of VC or OAVM, so as to allow other members of the company to participate in such meeting. [Para 3-A-VI of GC-20/2020]

Other companies may hold AGM with the physical presence of members if so permitted by local authorities or through video conferencing (VC) or other audiovisual means (OAVM). I do not see any reason for them to use the hybrid method, in absence of any denial.

CONDITIONS FOR COMPANIES NOT REQUIRED TO PROVIDE E-VOTING

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–

  1. in case of a Nidhi, hold shares of more than one thousand rupees in face value or more than one per cent of the total paid-up share capital, whichever is less;
  2. in case of other companies having a share capital, who represent not less than seventy-five per cent of such part of the paid-up share capital of the company as gives a right to vote at the meeting;
  3. in case of companies not having a share capital, who have the right to exercise not less than seventy-five per cent of the total voting power exercisable at the meeting.

[Para 3-B-I of GC-20/2020]

 

Nidhi Companies having a share capital companies not having a share capital
Email addresses of At least half of the total numbers of members: Email addresses of At least half of the total numbers of members: Email addresses of At least half of the total numbers of members:
hold shares of more than one thousand rupees in face value; or

more than one per cent of the total paid-up share capital, whichever is less.

represent not less than seventy-five per cent of such part of the paid-up share capital of the company as gives a right to vote at the meeting. who have the right to exercise not less than seventy-five per cent of the total voting power exercisable at the meeting.

The law related to quorum shall be applicable as per governing procedure, law and rules.

REGISTRATION OF EMAIL – IMPORTANT PRECONDITION IN CASE OF OTHER COMPANIES

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. [Para 3-B-II of GC-20/2020]

GOVERNING PROCEDURE

The framework provided in Para 3-A  of EGM Circular – I and the manner and mode of issuing notices provided in sub-para(i)-A of EGM Circular – II shall be applicable mutatis mutandis for conducting the AGM by companies which are required to provide or opted to provide e-voting facility. [Para 3-A-I of GC-20/2020]

We have already discussed here the procedure for companies required to or opted to provide e-voting facility.

The framework provided in para 3-B of EGM Circular – | and the manner and mode of issuing notices provided in sub-para (i)-B of EGM Circular – ll shall be applicable mutatis mutandis for conducting the AGM in case of other companies. [Para 3-B-III of GC-20/2020]

We have already discussed here the procedure for companies not required to provide e-voting facility.

The foregoing procedure discussed hereunder is additional to the framework laid down in EGM Circulars issued earlier. Hence, companies conducting AGM this year shall read both EGM Circulars along with this AGM Circulars.

BUSINESS TO TRANSACT

In such annual general meetings, other than ordinary business, only those items of special business, which are considered to be unavoidable by the Board, may be transacted. [Para 3-A-II and Para 3-B-IV of GC-20/2020]

DISPATCH OF ANNUAL REPORT

In view of the prevailing situation, owing to the difficulties involved in dispatching of physical copies of financial statements (including Board’s Report, Auditor’s report or other documents 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. [Para 3-A-III and Para 3-B-V of GC-20/2020]

There is a complete waiver to send copies of the Annual Report in physical mode.

PUBLIC NOTICE

Before sending the notices and copies of the financial statements, etc., the company shall issue a public notice by way of the 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 the English language in an English newspaper having a wide circulation in that district, preferably both newspapers having electronic editions.

Such public notice shall specify in the advertisement the following information.-

  1. a statement that the AGM will be convened through VC or OAVM in compliance with applicable provisions of the Act read with this Circular:
  2. the date and time of the AGM through VC or OAVM;
  3. availability of notice of the meeting on the website of the company and the stock exchange, in case of a listed company;
  4. 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;
  5. the manner in which the persons who have not registered their email addresses with the company can get the same registered with the company;
  6. the manner in which the members can give their mandate for receiving dividends directly in their bank accounts through Electronic Clearing Service (ECS) or any other means;
  7. any other detail considered necessary by the company

[Para 3-A-IV of GC-20/2020]

This provision is not required in case of companies which are not required to provide e-voting facility. However, it may be advisable.

DIVIDEND DISTRIBUTION

All companies shall prescribe the manner in which the members can give their mandate for receiving dividends directly in their bank accounts through Electronic Clearing Service (ECS) or any other means.

For shareholders, whose bank accounts are not available, the company shall upon normalization of the postal services, dispatch the dividend warrant/cheque to such shareholder by post.

[Para 3-A-IV read with 3-A-V and Para 3-B-VI of GC-20/2020]

QUORUM

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 the e-voting system in case of companies which are required or opted to provide the facility of e-voting.

[Para 3-A-VI of GC-20/2020 read with both EGM Circulars]

OTHER COMPLIANCES

The companies shall ensure that all other compliances associated with the provisions relating to general meetings viz making of disclosures, an inspection of related documents/registers by members, or authorizations for voting by bodies corporate, etc as provided in the Act and the articles of association of the company are made through electronic mode. [Para 4 of GC-20/2020]

EXTENSION OF ANNUAL GENERAL MEETING

The companies which are not covered by the General Circular No. 18/2020 dated 21.04.2020 and are unable to conduct their AGM in accordance with the framework provided in this Circular are advised to prefer applications for extension of AGM at a suitable point of time before the concerned Registrar of Companies under section 96 the Act. [Para 5 of GC-20/2020]

However, advice available under Para 5 is applicable for a few companies which do not have email addresses of sufficient numbers of members.

Aishwarya Mohan Gahrana

 

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