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Board and General Meetings through Video Conferencing

April 8, 2021

BOARD AND GENERAL MEETINGS THROUGH VIDEO CONFERENCING

The Companies Act, 2013 allows convening of Board Meetings through Video conferencing (VC) or any Other Audio-Visual Means (OAVM) and has recently also allowed convening of General Meetings through VC or OAVM in view of the Covid-19 pandemic. This has resulted in ease of convening meetings and has also enhanced participation of Directors and Members respectively. Let us look at the definition of VC or OAVM.

DEFINITION:

"Video Conferencing or Other Audio-Visual Means" means audio- visual electronic communication facility employed which enables all the persons participating in a meeting to communicate concurrently with each other without an intermediary and to participate effectively in the meeting.

Let us examine the provisions governing conducting of Board Meetings and General Meetings through VC or OAVM.

BOARD MEETINGS THROUGH VC OR OAVM

Section 173(2) of Companies Act, 2013 (Act) allows a Director to participate in the Board Meeting physically or through VC or OAVM, which are capable of recording and recognising the participation of the directors and of recording and storing the proceedings of such meetings along with date and time.

The following key points shall be considered for meetings through VC or OAVM:

  • Responsibility of Chairperson or Company Secretary:

Necessary arrangements shall be made to avoid failure of video or audio-visual connection.

The Chairperson of the meeting and the company secretary, if any, shall take due and reasonable care -

(a) to safeguard the integrity of the meeting by ensuring sufficient security and identification procedures;

(b) to ensure availability of proper VC or OAV equipment or facilities for providing transmission of the communications for effective participation of the directors and other authorised participants at the Board meeting;

(c) to record proceedings and prepare the minutes of the meeting;

(d) to store for safekeeping and marking the tape recording(s) or other electronic recording mechanism as part of the records of the company at least before the time of completion of audit of that particular year.

(e) to ensure that no person other than the concerned director are attending or have access to the proceedings of the meeting through VC or OAVM; and

(f) to ensure that participants attending the meeting through audio visual means are able to hear and see the other participants clearly during the course of the meeting:

Provided that the persons, who are differently abled, may make request to the Board to allow a person to accompany him.

  • Notice of the meeting:

The notice of the meeting shall inform the directors regarding the option available to participate through VC or OAVM

A director intending to participate through VC or OAVM shall communicate his intention to the Chairperson or the company secretary of the company. Alternatively, he can intimate about such participation at the beginning of calendar year and such declaration shall be valid for one year. Despite giving declaration, he can participate in person by intimating the company in advance.

  • Roll Call:

At the commencement of the meeting, a roll call shall be taken by the Chairperson when every director participating through VC or OAVM shall state, for the record, the following namely:

(a) name;

(b) the location from where he is participating;

(c) that he has received the agenda and all the relevant material for the meeting; and

(d) that no one other than the concerned director is attending or having access to the proceedings of the meeting at the location mentioned in clause (b);

After the roll call, the Chairperson or the Company Secretary shall inform the Board about the names of persons other than the directors who are present for the said meeting at the request or with the permission of the Chairperson and confirm that the required quorum is complete.

  • Quorum:

A director participating in a meeting through VC or OAVM shall be counted for the purpose of quorum, unless he is to be excluded for any items of business under any provisions of the Act or the rules.

  • Venue of the meeting:

With respect to every meeting conducted through VC or OAVM, the scheduled venue of the meeting as set forth in the notice convening the meeting, shall be deemed to be the place of the said meeting and all recordings of the proceedings at the meeting shall be deemed to be made at such place.

  • Registers:

The statutory registers which are required to be placed in the Board meeting as per the provisions of the Act shall be placed at the scheduled venue of the meeting and where such registers are required to be signed by the directors, the same shall be deemed to have been signed by the directors participating through electronic mode, if they have given their consent to this effect and it is so recorded in the minutes of the meeting.

  • Minutes:

At the end of discussion on each agenda item, the Chairperson of the meeting shall announce the summary of the decision taken on such item along with names of the directors, if any, who dissented from the decision taken by majority and the draft minutes so recorded shall be preserved by the company till the confirmation of the draft minutes.

The minutes shall disclose the particulars of the directors who attended the meeting through VC or OAVM.

  • Restricted items for VC or OAVM:

Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014, as amended, provides certain matters which are not to be dealt with in a meeting through VC or OAVM, as below:

(i) the approval of the annual financial statements;

(ii) the approval of the Board’s report;

(iii) the approval of the prospectus;

(iv) the Audit Committee Meetings for consideration of financial statement including consolidated financial statement if any, to be approved by the Board and

(v) the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

Where the quorum is present physically in a meeting to consider any of the above items, any other director may participate in the meeting through VC or OAVM.

In view of relaxations provided due to Covid-19 pandemic, meetings for matters mentioned above are allowed to be taken up through VC or OAVM till June 30, 2021.

GENERAL MEETINGS THROUGH VC OR OAVM

The Act per se, does not contain any specific provision allowing convening of General Meetings i.e., Extra-ordinary General Meeting (EGM) or Annual General Meeting (AGM) through VC or OAVM. However, in view of the difficulties caused by Covid-19 pandemic, MCA vide General Circular No. 14/2020 dated April 8, 2020 allowed companies to convene unavoidable EGM through VC or OAVM. Further, MCA vide circular 20/2020 dated May 5, 2020 allowed Companies to conduct AGM during the calendar year 2020 through VC or OAVM. The MCA has vide its General circular no. 10/2021 issued on June 23, 2021 further extended the timelines upto 31st December, 2021to conduct EGM's through VC or OAVM or transact items through postal ballot. 

Framework provided for conducting EGM/AGM through VC or OAVM:

Heading   For companies which are required to provide the facility of e-voting under the Act   Other companies (Private Companies and Unlisted Public Companies)
EGM EGM wherever unavoidable may be held through VC or OAVM.
AGM AGM – other than ordinary business, only those items of special business which are considered unavoidable may be transacted.
Eligibility for convening AGM through VC/OAVM Not Applicable AGM may be conducted through VC or OAVM if the company has email addresses of atleast half of its members, who
·  In case of Nidhi, hold shares of more than Rs.1000 in face value or 1% of total paid-up capital, whichever is less
·  In case of other companies having share capital, who represent not less than 75% of such paid-up capital with voting rights
·  In case of companies not having share capital, who have right to exercise not less than 75% of total voting power
Recording Recorded transcript of the meeting shall be maintained in safe custody by the Company. The same shall also be made available on website in case of a public company
Convenience Convenience of different persons positioned in different time zones shall be kept in mind before scheduling the meeting.
Two-way teleconferencing Care must be taken that the meeting allows two-way teleconferencing or webex
Participation Should allow atleast 1000 members to participate on first-come-first-served basis. Large shareholders (holding more than 2%), promoters, institutional shareholders, Chairman of Audit, Nomination & Remuneration, Stakeholders Relationship Committee, Auditors etc., may be allowed to attend without restriction. Should allow atleast 500 members to participate on first-come-first-served basis. Large shareholders (holding more than 2%), promoters, institutional shareholders, directors, KMP, Chairman of Audit, Nomination & Remuneration, Stakeholders Relationship Committee, Auditors etc., may be allowed to attend without restriction.
VC or OAVM opening and closing Facility shall be kept open atleast 15 minutes before the meeting and shall not be closed till the expiry of 15 minutes after the meeting
Remote E-voting Remote E-voting facility to be provided before VC meeting. Not Applicable
Quorum Attendance of members through VC or OAVM shall be counted for quorum
Chairman Unless Articles provide any specific person to be appointed as Chairman, Chairman of the meeting shall be: Unless Articles provide any specific person to be appointed as Chairman, Chairman of the meeting shall be:
a.    where less than 50 members are present at the meeting, Chairman shall be appointed in accordance with Sec. 104. a.    where less than 50 members are present at the meeting, Chairman shall be appointed in accordance with Sec. 104.
b.   In other cases, Chairman shall be appointed by poll conducted through e-voting during the meeting. b.   In other cases, Chairman shall be appointed by poll.
Voting at meeting ·     Chairman shall ensure that e-voting is made available during the meeting for the purpose of voting. ·     Company should provide designated email address in the notice of the meeting so that members can convey their vote when a poll is required to be taken during the meeting on any resolution, at such designated email address.
·     Only members present at the meeting through VC or OAVM and who have not cast vote through e-voting shall be allowed to vote through e-voting system in the meeting. ·     Where less than 50 members are present, the Chairman may decide to conduct a vote by show of hands, unless demand for poll is made in accordance with Sec. 109 of the Act.
·     In case of counting of votes require time, said meeting may be adjourned and called later to declare result.
Proxy Proxies cannot be appointed since meeting will be held through VC or OAVM
Representatives in case of Body corporate as shareholders Representatives of members, in case body corporates are shareholders, can be appointed to attend meeting
Independent Director/Auditor presence At least one Independent director, if appointed, and auditor or his authorized representative shall attend meeting
Institutional Investors presence In case institutional investors are members, they shall be encouraged to attend the meeting
Disclosures in Notice Notice of general meeting shall make disclosures- Same except copy of notice shall be displayed on website of the company, if any.
a.    Manner in which framework provided in the circular shall be available for use by members and
b.    Clear instructions on how to access and participate in the meeting.
c.     Helpline number to be provided for those shareholders who need assistance
d.    Copy of notice shall be displayed on website and due intimation to be made to Exchanges in case of a listed company
Dispatch of notice Notice to members may be given only through emails registered with the Company or DP ·     Notice to members may be given only through emails registered with the Company or DP
·     Contact all members whose email are not registered before sending notices, or
·     Where contact details are not available or could not be obtained, public notice by way of advertisement to be published in a vernacular newspaper in principal vernacular language in the district in which registered office is situated and atleast one English newspaper having wide circulation in the district.
Newspaper advertisement While publishing newspaper advertisement, additional disclosures to be given as below: While publishing newspaper advertisement, specify below information:
a.        Statement that EGM has been convened through VC or OAVM in compliance with MCA circulars a.    That company intends to convene general meeting and proposes to send notices through email after atleast 3 days from the date of publication
b.        Date and time of EGM b.   Details of email address and telephone number on which members may contact to get their email registered and to participate and vote in the meeting
c.         Availability of notice on website of the Company and SEs
d.        Manner in which members who are holding shares in physical form and not registered their email address can cast their vote through remote e-voting or e-voting during the meeting
e.        Manner in which members who have not registered their email addresses can get the same registered
f.          Any other details considered necessary
Efforts to make members participate Chairman shall satisfy himself and cause to record during the meeting that all efforts feasible under the circumstance has been made to enable members to participate and vote in the meeting
Filing with the Registrar All resolutions passed in accordance with this framework shall be filed with Registrar within 60 days of the meeting in form MGT-14 clearly indicating that the mechanism provided in the circular were duly complied.
Other compliances applicable to general meetings All other compliances associated with the provisions relating to general meetings are made through electronic mode.

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