How Does AGM Work?

According to the 2013 Companies Act, AGM functions as follows:

1. Notice of Meeting: The company must provide formal notice of the AGM to all shareholders, including the meeting’s date, time, and location. The notification must be sent at least 21 days in advance of the meeting. The notice should also contain the meeting’s agenda and any other relevant paperwork that shareholders must review prior to the AGM.

2. Agenda: The agenda items to be discussed at the AGM must be included in the notice of the meeting. This may consist of:

• Confirmation of the previous AGM’s minutes.
• Consideration and adoption of the financial statements of the company, including the balance sheet, income statement, and cash flow statement.
• Declaration of dividends (if profits are reported).
• Directors are appointed or reappointed.
• Appointment and approval of auditors.
• Other matters deemed necessary by the shareholders or the board of directors.

3. The Quorum: The Companies Act of 2013 specifies the quorum for an annual general meeting. The quorum for a public company consists of:

• Five members must be present if there are fewer than 1,000 members.
• If the number of members is between 1,000 and 5,000, 15 must be present in person.
• If the number of members exceeds 5,000, thirty must be physically present.
• The AGM is presided over by the chairperson of the board of directors (or, in their absence, another director designated by the board). The chairman is responsible for moderating proceedings, facilitating discussions, and ensuring that agenda items are addressed.

4. Voting: Voting is conducted in compliance with the provisions specified in the Companies Act. In most cases, a straightforward majority of ballots is sufficient to adopt a resolution, unless a special majority is required for something specific.

5. Minutes: Detailed minutes of the proceedings of the AGM, including discussions, decisions, and voting results, are recorded. These minutes are kept in a book known as the “minutes book”, which is accessible to shareholders and regulatory agencies.

6. Proxy Attendance: Shareholders who are unable to attend the annual meeting in person have the option to appoint a proxy to attend and vote on their behalf. The Companies Act specifies proxy voting rules and procedures.

7. Filing Requirements: Following the AGM, certain resolutions and outcomes must be filed with the Registrar of Companies (RoC) to comply with the Companies Act’s filing deadlines.