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| Govt to allow cos to hold AGM through video conferencing |
| Press Trust of India / New Delhi May 20, 2011, 21:14 IST |
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The government today allowed companies to hold annual general meetings (AGM) through video conferencing, with a view to provide larger participation and for curbing costs, borne by the shareholders to attend AGMs.
Accordingly, a company would have to send a notice informing shareholders about "the availability of participation through video conference, and provide necessary information to enable shareholders to access the available facility of video conferencing", the Corporate Affairs Ministry said in a notification.
This is a part of the MCA's Green Initiative Campaign for Corporate Governance.
Video conference facility enables all persons participating in a meeting to communicate concurrently with each other without an intermediary, and to participate effectively in the meeting.
The announcement, the MCA said, "is a sequel to the representations being received by the ministry from various industry bodies to recognise participation by shareholders in meetings under the Companies Act, 1956 through electronic mode."
The ministry added that the chairman and secretary would have to safeguard the integrity of the meeting via video conferencing, ensure proper video conference facilities, prepare the minutes of the meeting, ensure that no one other than the concerned shareholder or proxy to the shareholder is attending the meeting through electronic mode.
Further, it said that if a statement of a participant in the meeting via video conferencing is interrupted or garbled, "the chairman of the meeting or secretary shall request for a repeat or reiteration, and if need be, the chairman or secretary shall repeat what he heard the participant was saying for confirmation or correction".
According to section 166 of the Companies Act, 1956, a company is required to have its AGM either at the registered office of the company or at place within the city, town or the village in which registered office of the company is situated.
Section 174 provides that at least five members in case of public company and two members in case of other company have to be personally present and shall be the quorum for the general meeting.
Listed companies will also have to ensure that video conferencing connectivity during such meetings at least five places in India.
"It is recommended that these places would be situated all over India in such a way that it covers top five states/ Union Territories based on maximum number of members or at least 1,000 members, whichever is more, residing as per the address registered with the depositories," the ministry said.
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