In the opinion of lockdown being extended, and the restrictions of movement being executed it was decided by MCA (Ministry of Corporate Affairs) to allow companies to conduct their Annual General Meeting (AGM) through video conferencing and any other audio-visual means along with conduct of extra ordinary general meetings (EGM) in a similar manner.
While the notification for holding an AGM was passed and not to cancel it. MCA is silent on other notices that is attendance of members, proxies, right to vote, manner of raising queries, quorum and such other related discussions involving balances, disclosures and stakeholders’ consultations.
All the businesses conducting AGM via video conferencing are deemed to be special businesses. As there will be difficulties in sending physical copies of financial statements, along with board’s report, auditor’s report and other required documents through an e-mail. The appointments and retirement of directors fixing of remuneration and decision of any dividend will be sustained for the time being. A lot of notifications and procedures are not practiced in an immediate manner with properly arranged meetings but for companies virtual world holds completely new interrogations.
Allowing such virtual AGM and EGM would help companies to conduct such meetings often in a timely manner to discuss various matters of business and provide accurate information to shareholders. With this the shareholders will be informed adequately and will be able to participate in the business decision making virtually during the pandemic.
With travel restrictions on, home quarantine and social distancing being the rules, circulars from MCA for holding EGM and AGM to be extended is indeed a welcome step but it is an evolutionary concept. It will be implemented for once and experienced thereafter.