An Annual General Meeting (AGM) is a yearly gathering of a company’s shareholders where key issues, including financial statements, dividends, election of directors, and auditors’ appointments, are discussed and voted upon. It is a statutory requirement for publicly listed companies under the Companies Act, 2013, in India. The AGM functions to review the company’s performance, approve financial statements, and enable shareholders to express their views and exercise voting rights. AGMs ensure corporate transparency and accountability
Definition:
An Annual General Meeting (AGM) is a mandatory yearly gathering of a company’s shareholders, where directors present the company’s financial performance, discuss strategies, and allow shareholders to vote on important decisions such as the election of board members and the approval of financial statements. The AGM ensures transparency and offers shareholders a platform to engage with the company’s management.
Functions of Annual General Meeting:
- Review Financial Statements: Present and approve audited financial reports.
- Elect Directors: Vote on board members and their remuneration.
- Appointment of Auditors: Confirm or appoint external auditors.
- Declare Dividends: Decide on profit distribution to shareholders.
- Address Shareholder Concerns: Respond to questions and concerns from shareholders.
Importance of Annual General Meeting:
- Corporate Transparency: Keeps shareholders informed about the company’s performance and future outlook.
- Shareholder Rights: Provides an opportunity to vote on key decisions.
- Management Accountability: Ensures that directors and executives are accountable to the shareholders.
- Compliance: Required by law in most countries, ensuring the company adheres to regulatory standards.
Examples
Annual General Meetings (AGMs) are held by all publicly listed companies as a regulatory requirement. Here are notable examples of AGMs in India:
- Reliance Industries: Reliance’s AGMs are high-profile events, often live-streamed and attended by thousands of shareholders. Chairman Mukesh Ambani uses this platform to announce major business initiatives, including the launch of Jio and other strategic decisions.
- Tata Consultancy Services (TCS): TCS conducts AGMs where shareholders discuss financial performance, approve dividends, and vote on board appointments and auditor confirmations.
- Infosys: Infosys AGMs are known for their transparency, offering shareholders insight into business strategies, technology innovation, and governance.
- HDFC Bank: The AGM typically covers the bank’s financial health, corporate governance, and shareholder issues such as dividends and leadership changes.
Features of AGM
The key features of an Annual General Meeting (AGM) include:
- Mandatory Requirement: AGMs are legally required for publicly listed companies under corporate governance laws (e.g., Companies Act, 2013 in India).
- Annual Occurrence: AGMs must be held once every year, typically within six months after the end of the financial year.
- Shareholder Participation: Shareholders are invited to attend, ask questions, and vote on critical company decisions like board elections, dividends, and auditors.
- Approval of Financial Statements: The company’s audited financial statements are presented, reviewed, and approved by the shareholders.
- Election of Directors: Shareholders vote to elect or re-elect members of the company’s board of directors.
- Appointment of Auditors: Auditors are appointed or reappointed during the meeting.
- Dividend Declaration: Decisions regarding the payment of dividends to shareholders are made.
- Transparency and Accountability: Management presents reports on company performance, strategies, and future plans, ensuring accountability to shareholders.
- Proxy Voting: Shareholders who cannot attend can vote via proxy, allowing representation in decision-making.
