Convening General Meeting through Video Conferencing (VC) or Other Audio Visual Means (OAVM):

General Meetings are the integral part of Corporate Governance ensuring transparency, accountability and disclosure. There were no provisions under the Companies Act in relation to holding of Annual General Meeting (AGM) through Video Conferencing. In view of the Covid-19 pandemic, where restriction on physical movements was imposed, the Ministry of Corporate Affairs (MCA) had eased the compliance of conveying AGM physically, by providing a framework for conducting AGM of the company through VC or OAVM.

Relevant Circulars and notifications:

MCA vide General Circular dated April 08, 2020 and April 13, 2020 allowed the Companies to pass ordinary and special resolution of urgent nature requiring approval of members through mechanism of postal ballot/e-voting in accordance with the provisions of the Companies Act, 2013 and rules made thereunder without holding a general meeting which requires physical presence of members at common venue.

MCA vide General circular dated May 5, 2020 relaxed the norms as many companies requested for leniency on the AGM rules owing to the social distancing norms and the nationwide lockdown. Companies were then allowed to conduct their Annual General Meeting through VC or OAVM during the calendar year, 2020 by following the prescribed framework without requiring the shareholders to physically assemble at a common venue.

The Institute of Company Secretaries of India had also issued a guidance note on applicability of Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) in view of the pandemic situation.

Thereafter, MCA issued a clarification (through its General Circular No. 10/2022 and General Circular No. 11/2022, dated December 28, 2022) allowing the conduct of AGM and EGM of companies due for the year 2023, through VC or OAVM mode till September 30, 2023.

In a recent circular dated September 25, 2023, MCA has made an important announcement concerning AGMs for the year 2024. Companies whose AGMs are due in the years 2023 or 2024 are now permitted to conduct their AGMs through VC or OAVM. This extension applies to AGMs scheduled for or before September 30, 2024.

MCA has simply extended the time for mode of holding of the AGM through VC or OAVM. The due date of AGM has not been extended. Companies failing to adhere to the statutory timelines are still liable to face legal action under the appropriate provisions of the Act.

Guidelines for conducting AGM or EGM via video conferencing:

While conducting shareholders’ meet via video conferencing, following guidelines should be adhered to:

• The Notice of Holding AGM shall be dispatched to members only through e-mails registered with the Company or Depository Participant.

• 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.

• Convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting.

• Proper video conferencing equipment or facilities should be there for providing transmission of the communications for effective participation of members.

• It should be ensured that no person other than the concerned member is attending or have access to the proceedings of the AGM or EGM through video conferencing mode or other audio visual means.

• There is no requirement of appointment of proxies since members are not required to attend the meeting physically. However, representatives of body corporates are allowed to attend meetings.

• The facility for joining the meeting shall be opened at least 15 minutes before the time scheduled for the meeting and close after 15 minutes of expiry of the scheduled time of the meeting

• Auditors and at least one independent director, where the company is required to appoint, should attend AGM or EGM. Institutional investors should be encouraged to attend and vote at AGM or EGM.

• Recorded transcript of the AGM or EGM should be maintained in safe custody by the company. In case of a public company, the recorded transcript should also be made available on its website.

The tough time of pandemic has given an opportunity to the legislation to ditch the decade old norms and move towards digitalisation. Now during this abnormal time, this digital era is new normal, as there are so many benefits such as environment friendly, less time-consuming, cost effective, transparency, convenient to participate, timely disclosures.

Read the Recent Circular of MCA at: MCA Circular

 

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