Procedure For Holding An Annual General Meeting

A meeting known as an annual general meeting is required to be held by every company, public or private, limited by shares or by guarantee, with or without share capital or unlimited company every year. Section 166(1) of the Companies Act, 1956 states that every company must, in each calendar year hold an annual general meeting, so specified in the notice calling it, provided that not more than 15 months shall elapse between two annual general meetings. However, a company may hold its first annual general meeting within 18 months from the date of its incorporation. In that event it need not hold any annual general meeting in the year of its incorporation or in the following year. Thus, if a company is incorporated in December 2000, it may hold its first annual general meeting in May 2002, and that meeting will be deemed to be the annual general meeting for 2000, 2001 and 2002.

The Company Secretary is responsible for making all the arrangements for holding the annual general meetings of the company. He is required to perform the following functions and duties in this connection.

(A) Before the Meeting :

1. To convene a Board meeting, after giving notice as per Section 286, as soon as the final accounts are ready invite the Auditors for their report and transact the following business (in case of listed company, give advance notice to stock exchange):

(a) To consider and discuss the report of Audit Committee on the Annual accounts.

(b) To approve the accounts and authorise signing of accounts.

(c) To secure Auditor’s report on the accounts.

(d) To approve the draft of the Board’s Report in compliance with the provisions of Section 217 of the Act and to authorise the Chairman to sign the Report on behalf of the Board.

(Note: 1. If the Auditors’ report contains any reservations qualification or adverse remarks, the Board’s Report must contain explanations therefor. 2. If applicable also attach Compliance Certificate from Secretary in whole-time practice).

(e) To fix time, date and place for the annual general meeting and to approve the draft notice also to authorise the Secretary to issue Notice for the meeting. The Notice must contain Ordinary Business in accordance with the provisions of Section 173 of the Act, viz., receiving and adoption of accounts; declaration of dividend, if the same has been recommended by the Board of directors in their report to the members; appointment of retiring directors and/or appointment of other than retiring directors if a notice of candidature under Section 257 of the Act has been received by the company; and appointment of auditors and fixation of their remunerations.

However, while fixing the time, date and place for the annual general meeting, care should be taken that the time should be during business hours, the date should not be a public holiday, and the place should be either the registered office of the company or some other place within the same city, town or village in which the registered office of the company is situated.

(f) To consider the closure of the Register of Members and the Share Transfer Books of the Company in compliance with the provisions of Section 154 of the Act and to authorise the Secretary to arrange for its publication in a newspaper. If the shares are listed on one or more stock exchanges, a reference should be made to the stock exchange(s) about the proposed dates for such closure in advance of at least 21 days (15 days in case of such securities which are announced by SEBI for compulsory delivery in demat from by all investors) and also to comply with the requirement of stock exchange for book closure.

2. Immediately after the Board meeting, the stock exchanges should be informed of the dividends and/or cash bonuses recommended by the Board and to the shareholders in their Report, and financial information like the total turnover, gross profit/loss, provision for depreciation, tax provision and net profit/loss, for the year with comparative figures of the last year and the amounts appropriated from reserves and accumulated profits of the previous years etc. Book closure notice should be sent to all the stock exchanges.

3. To arrange for the publication in a newspaper of notice of closure of the Register of Members and the Share Transfer Books as per Section 154 of the Act.

4. To arrange for the printing of the balance sheet, profit and loss account, reports of the directors and of the auditors and the notice for the meeting.

5. To issue notice to the shareholders, for atleast 21 clear days before the date of annual general meeting. However in case of Section 25 Company a notice of not less than 14 days may be given. Notice of the meeting must also be send to the directors (whether member or not), auditors and stock exchanges.

6. If the directors decide for the publication of the Chairman’s statement, make arrangements for the same.

7. If the shares are listed at one or more stock exchanges, send six copies of the directors’ report, balance sheet and profit and loss account and three copies of the notices to such stock exchange(s) and one copy of each of them to all other recognised stock exchanges in India.

8. Check proxies with the Register of Members as and when they are received, from day to day, so that an up-to-date position is available till the date of the meeting.

9. To arrange for the printing of attendance slips and ballot papers.

10. In consultation with the chairman or the Managing Director, prepare a detailed agenda for the meeting.

11. To secure from the auditors a certificate in accordance with the provisions of the proviso to Sub-section (1) of the Section 224 of the Companies Act to the effect that the re-appointment, if made will be in accordance with the limits specified in Sub-section (1B) of Section 224 of the Act. This shall be obtained before holding the Board meeting and placed at the Board meeting.

12. To prepare Dividend List from the Register of Members/beneficial owners, on and from the last date of the closure of the Register of Members and the Share Transfer Books which will generally be the date of the annual general meeting.

13. To make arrangement for the printing of a combined document containing “Notice of Dividend” and “Dividend Warrant”.

(B) At the Meeting:

(1) To arrange for the collection of admission slips or in the alternative to get the Attendance Register signed by the shareholders, and to make them comfortable in their seats, and to look to the comfort and convenience of the directors and the chairman.

(2) To help the Chairman in ascertaining quorum.

(3) To read notice of the meeting if advised by the Chairman.

(4) To read the Auditor’s Report when the item relating to adoption of accounts is taken up for consideration.

(5) To produce copies of Memorandum and Articles of Association of the company.

(6) To help the Chairman in the conduct of the meeting, particularly in the conduct of poll, counting of votes etc.

Vide Circular no. 27/2011 dated 20.05.11, it is hereby clarified that a shareholder of the company may participate in a general meeting under the provisions of Companies Act, 1956 through electronic mode, with effect from financial year 2012-13, it shall be mandatory for companies to provide the facility to attend meetings through video conferencing. (Circular no. 35/2011 dated 06.06.11)

For this purpose the company shall also comply with the following requirements and procedures, in addition to the normal procedures required under the Companies Act, 1956 for holding general meeting:-

(a) Electronic mode means video conferencing facility i.e. audio-visual electronic communication facilityemployed which enables all persons participating in that meeting to communicate concurrently with each other without an intermediary, and to participate effectively in the meeting.

(b) The notice of the meeting must inform shareholders regarding availability of participation through video conference, and provide necessary information to enable shareholders to access the available facility of videoconferencing.

(c) The Chairman of the meeting and Secretary shall assume the following responsibilities:

(i) to safeguard the integrity of the meeting via videoconferencing.

(ii) to ensure proper videoconference equipment/facilities.

(iii) to prepare the minutes of the meeting.

(iv) to ensure that no one other than the concerned shareholder or proxy to the shareholder is attending the meeting through electronic mode.

(v) if a statement of a participant in the meeting via videoconferencing 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.

(7) To supply to the Chairman any information which he may require in connection with the queries raised by the shareholders relating to accounts and other connected matters.

(8) To give advance information to the members who are to propose and second the resolutions to be passed at the meeting.

(9) To take notes of the proceedings for the purpose of preparing minutes thereof.

(10) To keep before the meeting the Register of Directors’ shareholdings in compliance with the provisions of Section 307(7) of the Companies Act and also to keep at the meeting Register of Members, Minutes Book of the general meeting containing minutes of the previous annual general meeting(s), copies of the accounts, notice of the meeting and reports of the directors and of the auditors.

(C) After the Meeting:

(1) To prepare minutes of the proceedings.

(2) To record the minutes of the meeting and get them signed by the Chairman within thirty days of the meeting.

(3) To send intimation of appointment/re-appointment of directors. File e-Form 32 with the Registrar of Companies within 30 days of appointment along with filing fee.

For the purpose of filing e-Form 32, the following further details are required.

— Designation of Director

— Details of holding Directorship in other companies

— Details of holding Partnership in any Partnership Firm

— Details of Proprietorship

— Photograph of person appointed

— Evidence of payment of Stamp Duty incase qualification shares have been taken

— The original attachment relating to qualification shares duly filled in and signed on Stamp paper is required to be sent in physical mode to the concerned ROC office.

(4) To send intimation of appointment/re-appointment of auditors.

(5) To file along with the prescribed filing fee, copies of the special and other resolutions alongwith e-Form No. 23 with the Registrar of Companies in compliance with the provisions of Section 192 of the Companies Act, within thirty days of the meeting.

(6) To file, along with the prescribed filing fee, balance sheet, profit and loss account, reports of the directors and the auditors and the notice of the meeting alongwith the requisite fee as prescribed under Schedule X of the Companies Act, 1956 within thirty days of the meeting. Ensure that a copy of compliance certificate obtained from a Secretary in whole time practice as required under Section 383A of the Act, if any, is filed with Registrar of Companies within 30 days from the date of annual general meeting. As prescribed by the Ministry of Corporate Affairs, balance sheet, profit and loss account and compliance certificate, if any are to be filed as attachments to e-Form 23AC, e-Form 23ACA and e-Form 66 respectively. In case of listed company, to file with the stock exchange a Schedule in quadruplicate in the prescribed form, showing the distribution of its securities at the date of the annual general meeting and the names and holdings of large holders. Also send a copy of the proceedings of the annual general meeting to the stock exchange.

(7) Deposit dividend tax at the applicable rate within the prescribed time limit under Income Tax Act, 1961.

(8) Where the company has invited deposits, a copy of the Balance sheet shall be forwarded to the RBI.

(9) To open a separate bank account known as “Dividend Account for the year……..” and to deposit the total amount of dividend within five days from the date of declaration of dividend.

(10) To get the Dividend Warrants and Notice of Dividend signed by authorised persons.

(11) To despatch Dividend Warrants together with the Notice of Dividend to the shareholders within thirty days of the declaration of dividend after making arrangement with the banker for payment of dividend warrants at prescribed number of branches at par.

(12) To file along with the prescribed filing fee, Annual Return in Schedule V to the Companies Act as an attachment to e-Form 20B [with the Registrar of Companies within sixty days of the meeting prepared as at the date of the annual general meeting, as required by Section 159/160 of the Companies Act, 1956. For specimen of form of Annual Return of a company having a share capital is given at Annexure XIV]. e-Form 20B and e-Form 20A is to be filed for Annual Return by companies having share capital and by companies not having share capital respectively.

(13) To take action on other decisions of the shareholders.