Notice Of Annual General Meeting (AGM) - Content & Procedure
Updated: Jun 21, 2022
What Is an Annual General Meeting (AGM)?
An annual general meeting (AGM) is a yearly gathering of a company's interested shareholders. At an AGM, the directors of the company present an annual report containing information for shareholders about the company's performance and strategy.
Shareholders with voting rights vote on current issues, such as appointments to the company's board of directors, executive compensation, dividend payments, and the selection of auditors.
An AGM is the yearly gathering of a company's interested shareholders.
At an AGM, directors of the company present the company's financial performance and shareholders vote on the issues at hand.
Shareholders who do not attend the meeting in person may usually vote by proxy, which can be done online or by mail.
At an AGM, there is often a time set aside for shareholders to ask questions to the directors of the company.
Activist shareholders may use an AGM as an opportunity to express their concerns.
Procedure to File a Notice for Annual General Meeting (AGM)
The company must give a clear 21 days’ notice to its members for calling the AGM. The notice should mention the place, the date and day of the meeting, the hour at which the meeting is scheduled. The notice should also mention the business to be conducted at the AGM. A company should send the notice of the AGM to:
All members of the company including their legal representative of a deceased member and assignee of an insolvent member.
The statutory auditor(s) of the company.
All director(s) of the company.
The notice may be given in writing through speed post or registered post or via electronic mode. The notice should be sent to the address of the member as per the records of the company.
In the case of electronic communication, the notice should be sent to the e-mail address of the member as per the records of the company. The notice can be text typed in an email or an attachment to an email. The notice of the Annual General Meeting (AGM) should be placed on the website of the company or any other website as may be mentioned by the government.
An AGM can be called at a notice period shorter than 21 days if at least 95% of the members entitled to vote in the meeting agree to the shorter notice. The consent may be given in writing or through electronic mode.
Members’ Rights in an AGM
The members (including shareholders) of the company are entitled to attend and vote at the AGM. Members can cast their votes by a physical ballot or postal ballot or through e-voting. Members can appoint proxies to attend an AGM and vote on their behalf. The proxy should be appointed in writing, and the proxy form should be signed by the member.
In case the proxy is appointed by a corporate shareholder, the proxy form should be signed and sealed by an authorized signatory of the corporate. The members can elect one among themselves as the chairman of the meeting. However, if the articles of association of the company provide for a chairman, such person shall chair the AGM of the company.
Matters Discussed in an AGM
The matters discussed or business transacted in an AGM consists of:
Consideration and adoption of the audited financial statements.
Consideration of the Director’s report and auditor’s report.
Dividend declaration to shareholders.
Appointment of directors to replace the retiring directors.
Appointment of auditors and deciding the auditor’s remuneration.
Apart from the above ordinary business, any other business may be conducted as a special business of the company.
The ordinary business of the company will be passed by an ordinary resolution where the votes cast in favor are more than the votes cast against the resolution.
However, in case of special business transactions, the resolution may be passed as an ordinary resolution or a special resolution, depending on the applicable legal provisions. A special resolution requires at least 75% votes in favor of the resolution.
An AGM should be conducted during the business hours between 9 a.m. and 6 p.m. only. The meeting can be conducted on any day, which is not a national holiday, including holidays declared by the Central Government. The meeting can be held at any place which is within the limits of the city or town or village in which the registered office is situated.
A government company can also hold its AGM at any other place as the Central Government may approve. An unlisted company can hold an AGM at any place in India after obtaining consent from its members in writing or in electronic mode. In the case of a Section 8 company, the Board decides the date, time and place of the AGM as per the directions given in a general meeting of the company.
Penal Provisions:
If the company fails to file the report before the expiry of the period, such company shall liable to pay a penalty.
Company:
One Lakh rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.
Officer in default:
Twenty-five thousand rupees and in case of continuing failure, with further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of one Lakh rupees
AGM as per Section 121 of Companies Act 2013
(1) Every listed public company shall prepare in the prescribed manner a report on each annual general meeting including the confirmation to the effect that the meeting was convened, held and conducted as per the provisions of this Act and the rules made there under.
(2) The company shall file with the Registrar a copy of the report referred to in sub-section (1) within thirty days of the conclusion of the annual general meeting with such fees as may be prescribed, or with such additional fees as may be prescribed, within the time as specified under section 403.
(3) If the company fails to file the report under sub-section (2) before the expiry of the period specified therein, such company shall be liable to a penalty of one lakh rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees and every officer of the company who is in default shall be liable to a penalty which shall not be less than twenty-five thousand rupees and in case of continuing failure, with a further penalty of five hundred rupees for each day after the first during which such failure continues, subject to a maximum of one lakh rupees.
Applicable Rules
Companies (Management and Administration) Rules, 2014
[Effective from 1st April, 2014]
Rule 31. Report on Annual General Meeting.
(1) The report in pursuance of the provisions of sub-section (1) of section 121 shall be prepared in the following manner, namely:-
(a) the report under this section shall be prepared in addition to the minutes of the general meeting;
(b) the report shall be signed and dated by the Chairman of the meeting or in case of his inability to sign, by any two directors of the company, one of whom shall be the Managing director, if there is one and company secretary of the company;
(c) the report shall contain the details in respect of the following, namely:-
(i)the day, date, hour and venue of the annual general meeting;
(ii) confirmation with respect to appointment of Chairman of the meeting;
(iii) number of members attending the meeting;
(iv) confirmation of quorum;
(v) confirmation with respect to compliance of the Act and the Rules, secretarial standards made there under with respect to calling, convening and conducting the meeting;
(v) business transacted at the meeting and result thereof;
(vii) particulars with respect to any adjournment, postponement of meeting, change in venue; and
(viii) any other points relevant for inclusion in the report.
(d) the Report shall contain fair and correct summary of the proceedings of the meeting.
(2) The copy of the report prepared in pursuance of sub-section (1) of section 121 and sub-rule (1), shall be filed with the Registrar in Form No. MGT.15 within thirty days of the conclusion of the annual general meeting along with the fee.
[1] Omitted words” within the time as specified, under section 403" by the Companies (Amendment) Act 2017-vide Notification No. S.O. 1833(E) dated 7th May, 2018.
[2] Substituted by The Companies (Amendment) Ordinance, 2019 dated 12th January, 2019 effective from 2nd November, 2018. Prior to substitution it read as under:-
(3) If the company fails to file the report under sub-section (2) before the expiry of the period specified therein the company shall be punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees."