Electronic mode is defined as “video conference facility i.e. audio-visual electronic communication facility employed which enables all persons participating in that meeting to communicate concurrently with each other without an intermediary and to participate effectively in the meeting”.
Shareholder Meetings
The Circular mentions the requirements and procedures that need to be followed for holding a shareholder meeting through electronic mode, which includes:
(a) Notice of the meeting should inform the shareholders regarding availability of participation through video conference,
(b) The notice must provide necessary information to enable shareholders to access the available facility of video conferencing,
(c) The quorum requirements under Section 174 of the Companies Act will have to be complied with,
(d) The Chairman of the meeting shall have to be physically present at the place of the meeting, and
(e) To ensure a secured electronic platform for capturing accurate electronic voting, the process notified by the MCA Circular No. 21/2011 dated 2 May 2011 must be followed.[1]
Listed companies may also provide such facility during a meeting. However, such companies must provide video conferencing connectivity at least at 5 (Five) places in India. The MCA has recommended that such places be located all over India in a way that they cover top 5 (Five) States/UTs, based on maximum number of members or at least 1000 members whichever is more, residing as per the address registered with the depositories.
Role of the Chairman and Secretary
The Circular further provides that the Chairman and Secretary shall have the following responsibilities:
(a) To safeguard the integrity of the meeting via video conferencing,
(b) To ensure proper video conference equipment/facilities,
(c) To prepare minutes of the meeting,
(d) To ensure that no one other than the shareholder or proxy to the shareholder is attending the meeting through electronic mode,
(e) If a statement of a participant in such a meeting is interrupted or garbled, then then the Chairman or the Secretary must request for a repeat or reiteration, and if required, the Chairman or the Secretary must repeat what he/she heard the participant saying, for confirmation or correction.
Board Meetings
The following procedure is required to be followed for a board meeting:
(a) Notice of the meeting should inform the directors regarding availability of participation through video conference,
(b) The notice must provide necessary information to enable directors to access the available facility of video conferencing,
(c) Notice of the meeting must seek confirmation from the directors as to whether the director shall attend the meeting physically or electronic mode,
(d) Notice of the meeting must also contain the contact number(s)/e-mail addresses of the Secretary/designated officer whom the directors must send the confirmation to. In the absence of any confirmation from the director, it will be presumed that he/she will physically attend the meeting.
(e) At the start of such a meeting, a roll call with be made by the Chairman/Secretary. During such roll cal every director/authorized participant shall, for the record, state the following
a. Full Name,
b. Location,
c. That he/she can clearly see and communicate with all the other participants,
Once the above procedure is complete the Chairman/Secretary shall confirm the participation of the directors in the meeting who are not physically present. After, the roll call, the Chariman/Secretary may certify the presence of a quorum. A roll call must also be taken at the conclusion of the meeting and at re-commencement after every break to ensure quorum throughout the meeting.
(f) Every Director of a company must physically attend at least one meeting of the board/Committee of directors, in one financial year of the company,
(g) The place where the Chairman/Secretary is sitting shall be taken as the place of the meeting, in terms of Section 288 of the Act,
(h) All recordings shall also be made at the place where the Chairman/Secretary is sitting.
(i) The statutory registers required to be kept at such a meeting shall be kept before the Chairman for compliance,
(j) The statutory registers required to be signed by other directors shall be deemed to be signed by the directors participating in such a meeting if they have given their consent to that effect in the meeting. If a motion is subjected to and there is a need to vote, the Chairman/Secretary shall call the roll and note the vote of each director who should identify himself,
(k) At the end of such meeting, the Chairman shall announce the summary of decisions taken in the meeting in respect of each agenda item. Additionally, names of the directors who have consented or dissented in relation to each decision shall be called by the Chairman,
(l) Video recording of parts of such meetings where decisions were taken and votes were casted shall be preserved by the company for a minimum of 1 (One) year from the conclusion of each such meeting,
(m) The mode of attendance of every director in the past 3 (Three) meetings, whether personally or through electronic mode, shall be confirmed by the Chairman in the minutes of the meeting,
(n) The minutes of meeting must disclose the particulars of the directors who attended the meeting through electronic mode,
(o) Draft minutes of the meeting in soft copy shall be circulated to all the directors for confirmation, within 7 days of conclusion of the meeting, and
(p) Once the above formalities are completed, the minutes of the meeting shall be entered into the minute book, in the manner prescribed under Section 193 of the Act.
The Chairman and Secretary have similar responsibilities as in case of a shareholder meeting.
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