All that shareholders need to know before attending an e-AGM
3 min read 13 Jul 2022, 12:29 AM ISTThe e-voting platforms of NSDL and CDSL allow share-holders to register for e-voting
PremiumIt is the annual general meeting (AGM) season. And, shareholders of listed companies can take part in these meetings from the comfort of their homes now. The ministry of corporate affairs has allowed companies whose AGMs are due in 2022 to conduct such meetings through video conferencing or other audio-visual means (OAVMs) till 31 December.
Here is how you can attend the AGMs as a shareholder. The companies send emails alerting shareholders at least 21 days before the meeting. The notice highlights the meeting’s agenda and the key decisions for which shareholders’ approval is required. This, along with the annual report, can also be viewed on the company’s website.
On the voting rights of small shareholders, Shriram Subramanian, founder and MD of proxy advisory firm InGovern Research Services Pvt. Ltd, said, “voting by small retail shareholders may not have a big impact on the decisions taken but it sends a signal to the management that investors are active."
Further, the AGM notice gives shareholders a fair idea of whether any resolution is good or bad for the company. “For example, any proposal for a higher compensation to the management at a time when the company is crippled by Covid and making losses is clearly not in its best interests," said Subramanian.
Retail investors can make use of credible resources made available to them by proxy advisory firms if they are unable to decide on how to vote on any particular matter. Amit Tandon, founder and MD, Institutional Investor Advisory Services Indian Limited (IiAS), said all proxy-advisory firms make available their take on most corporate actions to the public on their websites or social media platforms.
Process of e-voting
Shareholders can cast their votes on the resolutions listed in the notice by electronic means prior to the AGM.
The e-voting platforms of NSDL and CDSL allow shareholders to register for e-voting on their websites and cast their votes.
The only condition for them to be eligible for e-voting is that they should be shareholders of the company on the ‘record date’ fixed by the company. Those holding shares in the physical mode are also entitled to e-vote. The websites of the depositories provide detailed instructions (including FAQs and user manuals) on the operational aspects of the e-voting process.
In the case of joint shareholders, the e-vote can only be cast by the first holder, which will be recognized on behalf of all the joint holders. Also, since the virtual meetings provide the flexibility to attend the AGM from anywhere, the option to appoint a proxy to vote on the shareholder’s behalf has not been enabled.
The vote once cast will be considered final and cannot be modified, according to the Companies (Management and Administration) Rules, 2014. Besides, if you exercise remote e-voting facility before the AGM, you will not be allowed to vote at the meeting again.
Apart from voting, if shareholders want to ask questions or express any views during the e-AGM, “they need to register as a speaker in advance as per information provided in the notice," said Sanket Jain, Partner, Pioneer Legal.
Access to registers
In the physical AGMs at the registered office, shareholders get access to various documents including the minutes book, related- party transactions, contracts and arrangements in which directors are interested, and also registers of members, directors and key managerial personnel.
“Since the companies are required to comply with all the provisions relating to the conduct of AGMs virtually, the members‘ rights to inspect the books of accounts or registers can also be exercised virtually," said Raj Bhalla, Partner at law firm MV Kini.
But Yashojit Mitra, Partner, Economic Laws Practice, sought to differ and said that the company is under no obligation to make these registers/documents available to all members in the e-AGM. “If the shareholder wants to exercise such rights, they need to independently pursue this with the company, which is under no obligation to furnish the same," added Mitra.
