All About ANNUAL GENERAL MEETING

All About ANNUAL GENERAL MEETING

In today’s growing corporate world, transparency and accountability are crucial for building trust. An Annual General Meeting (AGM) act as an platform where a company communicates with its shareholders to review past performance, discuss future strategies, and make complex  decisions that provide direction to the organization. 

AGM is one of the most important event in an organization and company. An AGM is a mandatory meeting held each year by a company or an organization. During this meeting, the company’s management and shareholders meet to discuss the overall performance, financial position, and future plans of the organization. It plays a key role in ensuring transparency and accountability in corporate governance.

Statutory Framework governing the holding of AGM 

SECTION 96:

TIME LIMIT OF AGM: 15 MONTHS FROM LAST AGM OR 6 MONTHS FROM END OF FINANCIAL YEAR WHICHEVER IS EARLIER.   

TIME LIMIT OF FIRST AGM: 9 MONTHS FROM THE END OF FINANCIAL YEAR

Company may apply to ROC for extention of due date of AGM (OTHER THAN FIRST AGM) in
FORM GNL 1 on the grounds of special reason ( reason beyond human control ) and ROC can grant maximum 3 months extention. 

DAY, TIME AND PLACE OF AGM :

1. AGM can be held on Any Day except national holiday (can be held on public holidays like Sunday) 
2. AGMs shall be held in Business Hours: between 9 o’clock and 6 o’clock in the afternoon.
3. The Annual General Meetings shall be held at the Registered Office of the company or within same city / town / village / in which RO is situated.

EXEMPTION PROVIDED TO :

1. UNLISTED COMPANY: An unlisted company can conduct its AGM at any place in India after written consent of 100% members .
2. SECTION 8 COMPANY: It can conduct its AGM on any day / time, place as its members may decide
3. GOVERNMENT COMPANY: It can conduct its AGM at any place as decided by Central government.
4. ONE PERSON COMPANY : A OPC is not mandatorily required to convene an AGM.

Regulatory Updates by MCA

The Ministry of Corporate Affairs (MCA) periodically issues amendments and notifications for smooth corporate governance and compliance. Recently, regarding the conduct of Annual General Meetings (AGMs), MCA introduced certain changes. 

With respect to COVID 19 measures, the Ministry of Corporate Affairs (MCA)allowed companies to conduct their Annual General Meetings (AGMs) through Video Conferencing (VC) or Other Audio-Visual Means (OAVM). MCA has granted certain regulatory relaxation to those AGMs which are scheduled during the calendar year 2024 .Also, with effect from April 1, 2024 the Institute of Company Secretaries of India (ICSI) has issued updated Secretarial Standards on General Meetings, pursuant to the amendments made to the Companies Act. These updated standards provide guidance on various procedural aspects of conducting AGMs, including the issuance of notices, ensuring quorum, appointment of proxies, and voting procedures. (AS STATED IN GENERAL CIRCULAR NO.09/2024 DATED 19.09.2024)

Virtual and Hybrid AGMs

With digital transformation, many companies now conduct:

• Virtual AGMs – fully online
• Hybrid AGMs – physical + online participation

Benefits

·  Greater participation of shareholders

· Time-efficient decision-making

· To reduce operational challenges of company

· Enhance Corporate Governance

· More Transparency

Importance of an AGM

·  Ensures Transparency
AGM allows shareholders to review the company’s financial statements and business activities. This will build trust between the company and its investors.

 ·  Shareholder Participation
Shareholders get the opportunity of being heard, raise concerns, and voting power that affect the company.

·  Accountability of Management
The company’s management should be accountable to the shareholders they must explain their decisions and performance.

·  Decision-Making Platform
Key decisions such as electing directors, approving auditors, and deciding dividends are made during the AGM.

·  Legal Requirement
Conducting AGM is compulsory under company law .Penalties get attracted in case the company fails to conduct AGM .

Activities in an AGM

An AGM includes various important activities, such as:

• Annual financial statements are presented.
• Discussion of the company’s performance
• Declaration of dividends
• Appointment or reappointment of directors and auditors
• Shareholders get a chance to redress queries and give feedback

These discussions guide shareholders understand how the company is being managed.

Who Attends an AGM

• Shareholders or members
• Board of Directors
• Company Secretary
• Auditors
• Senior management
• Sometimes regulators or observers

Legal Framework And Conduct of an AGM

The procedure and conduct of an Annual General Meeting refers to the legal and systematic steps followed before, during, and after the AGM to ensure it is conducted lawfully, smoothly, and transparently.

Procedure of an AGM

1. Before the meeting
2. During the meeting
3. After the meeting

Procedure Before the AGM	Conduct of an AGM (During the Meeting)	Procedure After the AGM
1. Fixation of Date, Time, and Venue The date, time, and place of the AGM, shall be decided by Board of Directors. The meeting must be held within the prescribed limit.	1. Verification of Quorum Quorum means the minimum number of members required.For want of quorum, the meeting shall stand adjourned.	1. Preparation of Minutes  · Section 118(10): Minutes of AGM must be prepared within 30 days from the conclusion of the meeting. · The minutes must be signed by the Chairman of the meeting. · They must be entered in the Minutes Book within 30 days from the meeting.
2. Preparing the Agenda An agenda is prepared covering: Ordinary businessSpecial business (if any)Resolutions to be passed	2. Chairman Calls the Meeting to Order The Chairman presides over the meeting.Ensures proper conduct and discipline.	2. Filing of Resolutions Special resolutions are filed with the Registrar or authority.Required forms are submitted within time limits.
3. Approval of Financial Statements Board shall prepare and approve Final accounts.Accounts are reviewed and certified by the Auditors.	33. Reading the Notice of AGM With the member’s consent the notice and agenda are read or taken as read.	3. Dividend Payment Within the specified time approved dividends are paid to shareholders. .
4. Issue of Notice of AGM A written notice is sent to all shareholders, directors, and auditors.The notice period is generally 21 clear days (may vary as per law).Content of notice:Date, time, and venueAgenda and resolutionsExplanatory statement	4. Adoption of Previous Minutes Minutes of the previous AGM are confirmed and signed	4. Implementation of Decisions Board implements decisions taken during the AGM.
5. Proxy Arrangement Shareholders who are unable to attend may appoint a proxy to represent them and exercise their voting rights.”Proxy forms are issued along with the AGM notice.	5. Presentation of Financial Statements Directors present:Balance SheetProfit & Loss AccountAuditor’s ReportMembers are allowed to raise queries .
6.Make Arrangements for voting Provision for physical voting, poll, or e-voting is made.Scrutinizer is appointed for fair voting.	6. Ordinary Business      The following matters were considered : Adoption of financial statementsDeclaration of dividendsAppointment or reappointment of directorsAppointment of auditors and fixation of remuneration
	7. Special Business Any special resolution is explained in detail.Members discuss and vote on special matters.
	8. Voting on Resolutions      Voting may be conducted by these methods : Show of handsPollProxy votingElectronic voting
	9. Declaration of Results whether resolutions are passed or rejected will be declared by the chairman .In the minute book the results were recorded .

Role of the Chairman in Conduct of AGM

• Maintains order and discipline
• Allows fair discussion
• Ensures voting is conducted properly
• Declares results of resolutions
• Has casting vote

Consequences of Not Holding an AGM

• Legal penalties and fines
• Loss of investor confidence
• Regulatory action
• Disqualification of directors (in some cases)

Penalties

As per section 99 of the Companies Act, 2013  Company and every officer in default shall be liable for fine for violation of section 96 of the Companies Act, 2013  ( not holding the meeting as required ) :

·  up to ₹1,00,000 (one lakh rupees).

·  If the default continues, there is an additional fine of up to ₹5,000 per day for each day the default continues until the AGM is held.

Types of Resolutions Passed in AGM

• Ordinary Resolution
  Passed by a simple majority (more than 50%)
• Special Resolution
  Requires a higher majority (usually 75%)

Voting Methods in an Annual General Meeting (AGM)

Voting in an Annual General Meeting (AGM) allows shareholders to express their assent or descent on resolutions placed before the meeting. Different voting methods are used to ensure fairness, transparency, and shareholder participation.

1. Voting by Show of Hands

• Each member present has one vote, regardless of the number of shares held.
• Voting is done by raising hands.
• It is the simplest and quickest method.
• Used for routine matters.
• Proxies are not allowed to vote in this method.

2. Voting by Poll

• Voting rights are based on the number of shares held by a member.
• Members can vote in person or through proxies.
• A poll may be demanded by:
  • Chairman
  • Specified number of members
• Considered more accurate than a show of hands.

3. Proxy Voting

• A shareholder may appoint another person (proxy) to vote on their behalf.
• It is not necessary for the proxy to hold membership in the company.
• Proxy voting helps shareholders who cannot attend the meeting.
• Proxies usually vote only in poll voting, not by show of hands.

4. Electronic Voting (E-Voting)

• Shareholders vote electronically through an online platform.
• Introduced to increase participation and transparency.
• Especially useful for large and listed companies.
• Voting is available for a specific period before or during the meeting

  5. Postal Ballot

• Shareholders vote by sending their votes via post or electronic means.
• Used for important decisions requiring wider participation.
• Ensures participation of shareholders unable to attend the meeting.

6. Voting Through Ballot Paper

• Physical ballot papers are distributed during the meeting.
• Members mark their votes and submit them.
• Often used when a poll is demanded.

Report

According to Section 121 of the Companies Act, 2013, every listed public company is required to prepare and file a report on each Annual General Meeting with the Registrar of Companies in Form MGT-15 within 30 days of the conclusion of the Meeting, irrespective of  the meeting is held physically or through Video Conferencing (VC) or Other Audio-Visual Means (OAVM). The report must confirm that the AGM was convened, held, and conducted in compliance with the provisions of the Act and the applicable Rules. It contains details such as the date, time, venue or mode of the meeting, number of members present, and confirm the requirement of quorum. Penal provisions got attracted in case the company fails to comply.

Conclusion

The Annual General Meeting (AGM) remains a key compliance and governance mechanism under the Companies Act, 2013. It helps in transparency, accountability, and shareholder participation in crucial corporate decisions. With evolving regulatory frameworks, including the applicability of Secretarial Standards and provisions for electronic meetings, companies must strictly adhere to statutory requirements while facilitating participation of members. Proper planning, timely filings, and procedural compliance are essential for conducting effective AGM.