Annual General Meeting

What is an Annual General Meeting?

An AGM is the only meeting in which Shareholders can interact with the Management or Board of Directors of their company. A mandatory yearly gathering  of a company’s interested Stakeholders.

It is the platform for directors to present the Company’s Annual Report.

AGM’s are not just held by companies, rather Universities, Schools, Charities and Unions and others could all be required to hold an AGM to discuss the Future prospects of the concerned organisation.

It is primarily held to allow shareholders to vote on company issues and the selection of board of directors.

Shareholders have option to vote by proxy.

Section Applicable: Section 96 of the Companies Act,2013.

According to Section 96(1) of the Companies Act,2013, a meeting known as an Annual General Meeting is required to be held by every company other than ‘one person company’ every year. The company shall specify the meeting as such in the notices calling Annual General Meeting.

As provided in clause (a) of sub-section (1) of section 102, four businesses transacted at such meeting are treated as ordinary businesses while other businesses, if any, are deemed to be special businesses.

Convening annual general meeting is a statutory requirement.

A company may have more than one general meeting but it should name one general meeting as annual general meeting to transact businesses mandated by the Act and the Board may fix day, date time and place for conduct of such meeting may delegate authority to its managing director or any other director to take steps for conduct of annual general meeting.

Due Date for  Annual General Meeting:

First AGM  –  within a period of 9 Months from the date of closing of the First Financial Year of the company.

Subsequent AGM – within a period of 6 Months from the date of the closing of the Financial Year.

Moreover Not more than 15 months shall lapse between the date of one annual general meeting of a company and that of the next.

Time and Place for  Annual General Meeting:

Every annual general meeting shall be called during business hours on any day that is not a National Holiday.

The business hours are prescribed to mean the time period between 9 a.m. and 6 p.m. It is to be noted that the meeting needs to be called during business hours. It may extend and conclude beyond business hours.

The venue of the meeting shall be either the registered office of the company or some other place within the city,
town or village in which the registered office of the company is situated.
Central Government has been empowered to exempt any company from the provisions of this sub-section subject to such conditions as it may be impose.

Permissible Extension for convening AGM :

Power lies with the Registrar The Registrar is empowered to extend, upon application by the company, the time within which any annual general meeting is to be held. Such power can be extended by a period not exceeding three months.

This power cannot be exercised in case of the first annual general meeting.

Who is Responsible for convening Annual General Meeting ?

The Company Secretary is responsible for making all the arrangements for holding the Annual General Meeting  of the company.

Functions And Duties of Company Secretary: –

A. Before the Meeting

B. At the Meeting

C. After the Meeting.

A. Before the Meeting:

• Convene a Board Meeting after giving notice as soon as the final accounts are ready.
• Discuss the report of Audit Committee on the Annual Accounts
• Approve the accounts and authorize signing of accounts
• Approve the draft of the Board’s report in compliance with the provisions of Section 134 of the Act and to authorize the Chairman to sign the Report on Behalf of the Board.
• Consider the payment of Dividend.
• Fix time, date and place for the AGM, approve the draft notice and also authorise the Secretary to issue Notice for the meeting.
• Timely Closure of the Register of Members and the Share Transfer Books of the company.
• 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.
• To issue notice to the shareholders, for at least 21 clear days before the date of annual general meeting and where it is to be sent by post , it should be posted 48 hours still earlier in terms of section 101. Notice of the meeting must also be send to the directors , auditors and stock exchanges.
• If the directors decide for the publication of the Chairman’s Statement, make arrangements for the same.
• In case of listed company, send 6 copies of the directors report, balance sheet and profit and loss account and 3 copies of the notices to such stock exchanges and 1 copy of each of them to all other recognised stock exchanges in India.
• 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.
• To arrange for the printing of attendance slips or attendance register and ballot papers.
• In consultation with the Chairman or the Managing Director, prepare a detailed agenda for the meeting.
• To prepare Dividend List from the Register of Members/ beneficial owners, as on the last date of the closure of the Register of Members and the Share Transfer Books.
• To make arrangement for the printing of a combined document containing “Notice of Dividend” and “Dividend Warrant”.

B. At the Meeting:

• Help the Chairman in ascertaining quorum.
• 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.
• Produce copies of Memorandum and Articles of Association of the Company.
• Read out the Auditor’s Report, if advised by the Chairman, when the item relating to adoption of accounts is taken up for consideration.
• Supply to the Chairman any information which he may require in connection with the queries raised by the shareholders relating to accounts and other related matters.
• Give advance information to the members who are to propose and second the resolutions to be passed at the meeting.
• To take notes of the proceedings for the purpose of preparing minutes thereof.
• To keep at the meeting Register of Members, Minutes Book of the general meeting containing minutes of the previous annual general meeting, copies of the accounts, notice of the meeting and reports of the directors and of the auditors.
• To ensure that the Chairman of the Audit Committee is present at the annual general meeting to provide any clarification on the matters relating to audit and to answer shareholders queries.

B. After the Meeting:

• To prepare minutes of the proceedings
• To record the minutes of the meeting and get them signed by the Chairman within 30 days of the meeting.
• To send intimation of appointment/re-appointment of directors. File Form DIR-12 with the Registrar of Companies within 30 days of appointment along with filing fee.
• To send intimation of appointment/re-appointment of auditors.
• To file copies of the special and other resolutions, if any, passed at the meeting, along with Form MGT-14 with the Registrar of Companies, within 30 days of the meeting.
• To file balance sheet, profit and loss account, reports of the directors and the auditors and the notice of the meeting in Form AOC-4 within 30 days of the meeting.
• Deposit Dividend Distribution tax at the applicable rate within the prescribed time limit under Income Tax Act,1961.
• Where the company has invited public deposits, a copy of the Balance Sheet be forwarded to the RBI.
• To open a separate bank account Known as “Dividend Account for the year_______” and to deposit the total amount of dividend within 5 days from the declaration of Dividend.
• To get the Dividend Warrants and Notice of dividend signed by the authorised persons.
• To file along with the prescribed filing fee, Annual Return in Schedule V to the Companies Act as an attachment to Form MGT-7 with the Registrar of Companies within 60 days of the meeting prepared as at the date of the annual general meeting, as required by the Section 92 of the Companies Act.1961.
• To take action on the decisions of the shareholders.
• If the company is listed then to submit to the stock exchanges, within 48 hours of conclusion of annual general meeting, details regarding the voting results in the following format as prescribed in clause 35A of the Listing agreement.

Conclusion: 

Annual General Meeting provide members with an opportunity to collectively discuss the affairs of the company and to exercise their ultimate control over the management of the company. If a company defaults in any year in holding its Annual General Meeting, any member of the company has a Statutory Right to approach the National Company Law Tribunal to call or direct the company to call Annual General Meeting.