Holding of Annual General Meeting by companies whose financial year has ended on December 31, 2020
24 April 2020
In the current scenario, various companies are facing difficulties in complying with certain provisions of the Companies Act, 2013 and Listing regulations.
However, Ministry of Corporate Affairs (‘MCA’) and Securities Board and Exchange of India (‘SEBI’) have been ensuring to relieve companies from various concerns in order to meet certain key provisions under the Statute. A recent relaxation in one such provision falls under Section 96 of the Companies Act, 2013, wherein every company is required to hold its annual general meeting (other than first annual general meeting) within a period of six months from the date of closing of the financial year. By virtue of this provision, companies whose financial year has ended on December 31, 2019 were required to conduct its annual general meeting on or before June 30, 2020.
However, keeping in view the current situation, it has been clarified by MCA vide its General Circular dated April 21, 2020 that Companies whose financial year (other than first financial year) has ended on December 31, 2019 (not being first financial year) can hold their annual general meeting for such financial year within nine months from the closure of the financial year (i.e. by September 30, 2020) and the same shall not be viewed as violation.
In addition, Regulation 44(5) of the SEBI Listing Regulations requires top 100 listed entities by market capitalization to hold their annual general meeting within a period of five months from the date of closing of the financial year. In line with MCA Circular, SEBI vide its Circular dated April 23, 2020 has also provided that the top 100 listed entities by market capitalization whose financial year ended on December 31, 2019 may hold their annual general meeting within a period of nine months from the closure of the financial year (i.e., by September 30, 2020).