By a general circular 18/2020 issued on April 21, 2020, the Ministry of Corporate Affairs (“MCA”) extended the due date for Annual General Meeting (“AGM”) from June 30, 2020 to September 30, 2020 of companies whose Financial Year (“FY”) followed the calendar year basis, i.e. ended on December 31, 2019.
Background: As per section 96 of the Companies Act, 2013 (“the Act”), every company is required to hold its first AGM within 9 months of the end of its first FY. This period reduces to 6 months for all subsequent AGMs. As per section 2(41) of the Act, FY should commence from April 1 to March 31 of the following year. However, in case of an Indian holding or subsidiary or associate company of a company incorporated outside India, the Indian company can make an application to Central Government for following a different FY in order to align its FY with such foreign company for consolidating its accounts outside India.
Amendment: This amendment applies to only to those companies whose FY ended on December 31, 2019. As per law, their AGM should be convened on or before June 30, 2020 i.e. within 6 months of the end of FY. The current circular now allows such companies to convene it on or before September 30, 2020 i.e. within 9 months of the end of FY.