On account of COVID-19 outbreak, several representations have been received by the Ministry of Corporate Affairs (MCA) for providing some relief measures in the provisions of the Companies Act, 2013 (the Act) and rules made thereunder for holding Annual General Meeting (AGM) in a manner provided in the General Circular dated April 8, 2020 (EGM Circular –I) and General Circular dated April 13, 2020 (EGM Circular –II)

Earlier MCA vide General Circular dated April 21, 2020, has allowed relaxation in the timeline for holding AGM by September 30, 2020 for the Companies whose financial year ended on December 31, 2019.

Taking into consideration the current scenario and importance of social distancing and avoiding public gathering, MCA vide general circular dated May 5, 2020 has issued clarification on holding of Annual General Meeting (AGM) through video conferencing (VC) or other audio visual means (OAVM)

Key Highlights of the Circular:

A. Companies where E-voting is required:

– 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.

– other than ordinary business, only those items of special business, which are considered to be unavoidable by the Board, may be transacted in such meeting.

– Financial statements along with Board’s Report, Auditor’s Report and other relevant documents 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.

– Before proceeding the mail process of sending the notice and copy of financial statements and required documents, a public notice by way of advertisement be published at least once in a vernacular language and English language, preferably both newspapers having electronic editions, and containing the following information-

i. statement that the AGM will be convened through VC or OI\VM in compliance with applicable provisions of the Act read with this Circular

ii. the date and time of the AGM through VC or OAVM;

iii. availability of notice of the meeting on the website of the company and the stock exchange, in case of a listed company;

iv. 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 e-voting system during the meeting;

v. manner in which the members can register their email addresses with the company, in case not registered earlier;

vi. the manner in which the members can give their mandate receiving dividends directly in their bank accounts through Electronic Clearing Service (ECS) or any other means;

vii. any other detail considered necessary by the company

– The Company shall upon normalization of the postal services, dispatch the dividend warrant/ cheque by post to such shareholder whose dividend is remaining unpaid.

– In case, the company has received the permission for holding AGM physically, the Company shall also provide the facility of VC or OAVM, so as to allow other members of the company to participate in such meeting. All members who are physically present as well as the members who attend the meeting through VC or OAVM shall be considered for the purpose of quorum under the Act. All resolutions shall continue to be passed through the facility of e-voting system.

B. Companies where E-voting is not required:

i. AGM can be conducted through VC or OAVM by Companies which has in its records, the email addresses of at least half of its total number of members, who

– In case of Nidhi, a. 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;

– In case of other companies having 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;

– In case of companies not having share capital, who have the right to exercise not less than seventy-five per cent. of the total voting power exercisable at the meeting.

ii. The Company shall take all necessary steps to register the email addresses of all the unregistered members.

iii. 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.

iv. In AGM, besides ordinary business, any special business, if unavoidable, shall be transacted.

v. Financial statements (including Board’s report, Auditor’s report or other documents required to be attached therewith), shall be sent by email to members and the other persons entitled to receive.

vi. The manner in which the members can give their mandate receiving dividends directly in their bank accounts through Electronic Clearing Service (ECS) or any other means. The Company shall upon normalization of the postal services, dispatch the dividend warrant/ cheque by post to such shareholder whose dividend is remaining unpaid.

In addition to the above, the Companies shall also ensure all other compliances associated with the  provisions relating to general meeting viz. making of disclosures, inspection of related documents/ register by members or authorisations for voting by bodies corporate etc. as provided in the law are made through electronic mode.

The Companies which are not covered by the MCA 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 (ROC) under section 96 of the Act.

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