Covid-19 crisis: government allows companies to maintain AGM through video conferencing mode

NEW DELHI: The government has allowed companies to hold annual general meetings this year through other audiovisual media amid the coronavirus pandemic.

In the wake of the pandemic and subsequent blockade at the national level, which have disrupted economic activities, the ministry, which is implementing the company law, has been providing several relaxations in terms of compliance from time to time.

Due to the need for continuous adherence to the rules and restrictions of social distancing imposed on the movement of people, it has become necessary and, therefore, it has been decided to allow companies to maintain their AGM by videoconference or other audiovisual media during the 2020 calendar year, he said in a statement Tuesday.

The corporate affairs ministry's decision would be a relief to all companies as they must hold their Annual General Meetings (AGM) within six months of the end of a financial year.

To carry out the first AGM, companies have nine months from the end of a financial year.

Last month, the ministry allowed companies whose financial year ended December 31, 2019 to maintain their AGMs before September 30, 2020.

Due to difficulties in sending physical copies, companies have been allowed to send financial statements, along with board reports, auditor's reports and other documents to be attached, only by email.

Companies are also required to provide a window for shareholders to record their mandate to transfer dividends to them electronically through the Electronic Compensation Service (ECS) or any other means, according to the ministry.

There are almost 12 lakh registered companies that are active in the country.