Evolution of Annual General Meetings in India

An Annual General Meeting (AGM) is a very important annual event for companies and their shareholders. It is the platform on which the Directors and management of the company interact with the shareholders of the company. It is an opportunity for –

the Board of Directors to directly interact with the shareholders of the company, and to present them the company strategy, performance, as also share important information on the company’s achievements, accomplishments, and challenges in the previous year.
the shareholders to hold accountable the Directors, who are their elected representatives.
the shareholders to ask the management about the performance of the company, and to raise any grievance or give any suggestions that they may have.
the shareholders to exercise their vote on important resolutions, after consideration of the information presented.

Over the years, with the evolution of Company Law in India, the provisions relating to the AGM have also evolved.

Sr No		Companies Act 1913	Companies Act 1956	Listing Agreement	Companies Act 2013	LODR Regulations
1	Timeline for the 1^st AGM of a company	–	Not more than 18 months from the date of incorporation	–	Within 9 months from the date of closing of the first FY of the company	–
2	Timeline for conducting AGM each year	Within 6 months from close of FY	Within 6 months from close of FY	–	Within 6 months from close of FY	Within 5 months from close of FY for top 100 listed entities by market capitalization
3	Maximum time between 2 consecutive AGMs	15 months	15 months	–	15 months	–
4	Timeframe for AGM Notice and statutory/ annual report	14 days Notice in writing; At least 10 days before the date of the meeting, statutory report to be sent to every member and person entitled to receive it.	21 days Notice in writing; Short notice requires consent of all members; At least 21 days before the date of the meeting, statutory report (annual report) to be sent to every member and person entitled to receive it.	–	21 days Notice in writing or through electronic mode; Short notice requires consent of 95% members; At least 21 days before the date of the meeting, annual report to be sent to every member and person entitled to receive it.	Listed company to submit to the Stock Exchange and publish on its website a copy of the Annual Report, along with the notice of the AGM, not later than the day of commencement of dispatch to its shareholders. In the event of any changes to the Annual Report, the revised copy, along with the details of and explanation for the changes, to be sent not later than 48 hours after the AGM.
5	Disclosures with respect to AGMs in Annual Report	–	–	Date, time and venue of the upcoming AGM as well as the previous 3 AGMs, attendance of the Directors in the previous AGM, and whether any special resolutions were passed in the previous 3 AGMs.	–	Date, time and venue of the upcoming AGM as well as the last 3 AGMs, attendance of the Directors in the previous AGM, whether any special resolutions passed in the previous 3 AGMs.
6	Day and Time of AGM	–	During business hours, on a day that is not a public holiday	–	During business hours, between 9am and 6pm on any day except a National Holiday	–
7	Power to Registrar to extend the time for conducting AGM	–	Maximum 3 months	–	Maximum 3 months	–
8	Venue of AGM	–	Either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated. Unless a special permission is taken from the Central Government.	–	Either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situated. Unless a special permission is taken from the Central Government.	–
9	Attendees	Members; Directors	Members; Directors; Statutory Auditors; Chairperson of Audit Committee (mandatory)	Members; Directors; Chairperson of Audit Committee (mandatory) Chairperson of Remuneration Committee (optional)	Members; Directors; Statutory Auditor (himself or through his authorised representative); Chairperson of Nomination and Remuneration Committee, and Stakeholders Relationship Committee (or, in his absence, any other member of the committee authorised by him)	Members; Directors; Chairperson of Audit Committee and Stakeholders Relationship Committee (mandatory) Chairperson of Nomination and Remuneration Committee (or a Director nominated by him/her)
10	Live Webcast	–	–	–	–	Top 100 listed entities to provide one-way live webcast
11	Submission of proceedings of AGM	–	–	Disclose the proceedings of AGM to the Stock Exchange promptly.	Every listed company to prepare a report on AGM, including the confirmation that the meeting was convened, held and conducted as per the provisions of the Act. This report to be filed with the Registrar within 30 days of the conclusion of the AGM.	Disclose the proceedings of AGM to the Stock Exchange within 24 hours of the event.
12	Submission of Voting Results of AGM	–	–	Within 48 hours	–	Within two working days
13	Body with additional powers to call an AGM	Court	Central Government	–	Tribunal	–
14	Penalty for not holding AGM	Not exceeding Rs. 500	Upto Rs. 50,000 and in the case of a continuing default, a further fine extending upto Rs. 2,500 for every day during which such default continues.	–	Upto Rs. 1,00,000 and in the case of a continuing default, a further fine extending upto Rs. 5,000 for every day during which such default continues.	–

Relaxations given by MCA and SEBI, in view of Covid-19, with regard to conducting of AGM in FY 20 and FY 21 are:

Conducting EGM and AGM through Video Conferencing (VC) or through other audio-visual means (OAVM).
Dispensing with the printing and despatching of physical copies of Annual Reports to shareholders.
For FY 20, extension of time for companies to convene AGMs.

In year 2 of virtual AGMs, certain good practices that the companies can follow with respect to their AGMs are –

Prepare in advance and explore user friendly ways of using technology for conducting the AGMs.
Give clear instructions on how to join the AGM.
Create a dedicated section on their website for AGMs, and keep it updated.
Provide a dedicated contact person/ number for any assistance relating to joining AGM.
Request shareholders to send their questions in advance, along with clear instructions on how to do so.
Provide for live webcast on their websites for more members to see the proceedings of the AGM.
Respond, at the earliest, to the questions that could not be responded to in the AGM.

Shikha Shah

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