Relaxations in AGM and EOGM Conduct

Relaxation for holding all Extra-Ordinary & Annual General Meetings (AGM / EOGM) in 2020 through Video Conference or Other Audio Visual Methods

The Ministry of Corporate Affairs (MCA) has allowed organizations to hold the Extra-Ordinary General Meeting (EOGM) as well as the Annual General Meeting (AGM) through Video Conference (VC) or Other Audio-Visual Means (OAVM) considering the lockdown in various parts of the country. The MCA has issued certain pre-requisites for this relaxation to be applicable. But before we look into it, let us first discuss a little bit about the objectives of an EOGM or an AGM.

What do EOGMs and AGMs entail?

An Annual General Meeting (AGM) is a yearly meeting of shareholders of the company. All companies are mended to hold an AGM. The ordinary business to be transcated in AGM is discuss audited company account, elections of directors, dividend and auditors appointment , if required.

An Extraordinary General Meeting (EOGM / EGM) can be called if any other matters requires shareholders’ approval and AGM is not around. Thus agenda of an EOGM is anything that cannot wait for the next AGM for resolution.

Generally, AGM and EOGM sessions are held in person, with all the decision makers present. But with the lockdown, organizations have been forced to move to virtual platforms.

Pre-requisites for the relaxation in meeting conduct

• This relaxation is available for EOGM to be conducted up to 30^th September 2020 and AGM to be conducted during the calendar year 2020
• It is for the companies which are not required to provide e-voting facility and companies which have not opted for providing the facility voluntarily i.e. Private Companies and Unlisted Public Companies having less than 1,000 members
• For effective co-ordination and administrative support, the Chairman of the company may conduct the meeting from registered office through VC or OAVM.

Manner and mode of issuing notices to members

• Notices may be given only through email id of members registered with the Company or with the depository participant / depository.
• Before scheduling the meeting, convenient time zones to be checked if members are geographically scattered.
• Notice to be prominently displayed on Company’s website, if any.
• Company shall contact all members whose email ids are not registered with it before sending the notice to all members.
• If contact details are not available or could not be obtained, it shall immediately publish a public notice by way of an advertisement at least once in a vernacular language and at least once in an English newspaper in English language; preferably both newspapers having electronic editions.
• Notice shall contain clear instructions of how to access and participate in the meeting., provide a helpline number for shareholders

Procedure for holding AGM / EOGM by VC or OAVM

• Chairman shall satisfy himself and record that all feasible efforts have been made to enable members to participate and vote on the agenda items.
• VC or OAVM facility allows two way teleconferencing or webex for ease of participation and should have a capacity to allow at least 500 members or the total no. of members whichever is lower to participate on first-come-first-serve basis.
• Facility for joining the meeting to be kept open at least 15 minutes before the scheduled time to start the meeting and shall not be closed till expiry of 15 minutes after the scheduled time
• All members who are physically present in the meeting as well as the members who are attending through VC or OAVM facility shall be reckoned for the purpose of quorum.
• At least one Independent Director (where Company is required) and the auditor (Statutory and Secretarial or his representative who also is qualified to be an auditor) shall attend the meeting through VC / OAVM.
• Physical attendance of members in any case has been dispensed with, there is no requirement of appointment of proxies. However representatives of the members’ maybe appointed.
• If there is no appointed Chairman of the Company or if manner of appointment of Chairman has not been provided in the Articles, Chairman shall be appointed in following manner:

1. Where less than 50 members are present – to be appointed as per section 104
2. In other cases – to be appointed by a poll

• Where less than 50 members are present in a meeting, Chairman may decide to conduct a vote by show of hands, unless poll is demanded by any member pursuant to section 109 of the Act.
• Company to provide a designated email id to the members at the time of sending the notice so that they can convey their vote when a poll is required to be taken on any resolution during the meeting.
• Recorded transcript of the meeting shall be maintained in safe custody of the Company and as soon as possible be made available on the Company’s website.

Reporting & Compliance Provisions:

• All other compliances associated with the provisions relating to general meetings as provided in the Act and the articles of association of the company are made through electronic mode.
• All resolutions passed in accordance with this mechanism to be filed with ROC within 60 days from the date of meeting, clearly indicating therein that the meeting was held to VC/OAVM and that other provisions and rules of the Act were complied with during the meeting.

(Based on the Circular no. 20/2020 dated 5^th May, 2020 read with Circular No. 14/2020 dated 8^th April, 2020 and Circular No. 17/2020 dated 13^th April, 2020 and 15^th June 2020 providing clarification on holding of EOGM & AGM)