ANNUAL

GENERAL MEETING

By
Tharun B K
 What is Annual General Meeting ?

An Annual General Meeting (AGM) is held to have an interaction

between the management and the shareholders of the company.

The Companies Act, 2013 makes it compulsory to hold an annual

general meeting to discuss the yearly results, auditor’s appointment
and so on.
Companies Required to Hold an AGM :
• All companies except one person company (OPC) should hold an AGM
after the end of each financial year.

• A company must hold its AGM within a period of six months from the end
of the financial year.

• In the case of a first annual general meeting, the company can hold the
AGM in less than nine months from the end of the first financial year.

• The time gap between two annual general meetings should not exceed 15
months.
Procedure to Hold an 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, business to be conducted and
the hour at which the meeting is scheduled.
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 auditors of the company.

• All directors of the company.

 What is the Agenda of an AGM?
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.

Quorum for an AGM :
• Private Company – Two members

• Public Company :

5 members – Below 1000 members

15 members – 1001-5000 members

30 members – Above 5000 members

Consequences and Penalty for Default in Holding an AGM :

• In case a company fails to hold an AGM within the

stipulated time or extension obtained by it, the Tribunal
may itself or on an application made by any director or
member order an AGM to be conducted as per its
directions.
• If the company further defaults in holding a meeting in accordance
with the directions of the Tribunal, the company and every officer
of the company who commits the default shall be punishable with
a fine of up to Rs 1 lakh.

• In case of continuing default, a fine of Rs 5,000 per day is levied

for each day during which the default continues.
CASE STUDY

SABSE TECHNOLOGIES PVT LTD

VS
ROC MUMBAI

JUDGEMENT DATE : Dec 18, 2019

 Bench
Hon’ble Member : Mr. Rajasekhar. V .K
Hon’ble Member : Mr. Ravikumar Duraisamy
Court : National Company Law Tribunal
Petitioner : Mr. Ashish Baby & Mr. Ghanshyam Jawale
Advocate for the Petitioner : Mr. Gautam Bhandari, CS
Provisions Of Companies Act 2013 :

Section 96 : The first annual general meeting of the Company should be

held within a period of nine months from the date of closing of the first
financial year of the company and in any other case, within a period of six
months, from the date of closing of the financial year.

Section 99 : If any default is made in holding a meeting of the company in

accordance with Section 96, the company and every officer of the company
who is in default shall be punishable with fine which may extend upto one
lakh rupees and in the case of continuing default may extend upto 5
thousand rupees for every continuing day.
FACTS :
• The last annual general meeting of the company for the F.Y. 2017-18 was
held on 03.11.2018 wherein no shareholders could remain present and
therefore the meeting was adjourned to the same day in the next week at the
same time and place i.e. on 10.11.2018 and the F.Y. ended on 31.03.2018.

• Thus, the company should have conducted the Annual General Meeting for
the F.Y. 2017-18 on or before 30.09.2018.
• Company had appointed M/s B. Gala & Co., CA as the Statutory
Auditors to conduct the audit for the F.Y. 2017-18. However, he
resigned on 24.09.2018 thereby causing the vacancy in the office
of Auditors of the Company.

• The Company then appointed M/s. STR & Associates, CA at the

extra ordinary general meeting held on 24.10.2018 to conduct the
audit.

• The Directors were constantly trying to arrange the AGM and

settle things amicably between the promoters but no avail.
• However, after the several attempt, the Board
succeeded in convincing the promoters of the
company and the AGM convened on 10.11.2018.

• It is further submitted that the default is not

intentional and it happened due to unforeseen events
and circumstances.
JUDGEMENT TIME :
Points taken into consideration for Judgement :

 Due to unavoidable situations , the company could not held the

meeting on or before 30.09.2018.

 Company made default good by conducting the meetings belatedly.

 Accounts also adopted in those belated meetings.

FINAL JUDGEMENT :
Compounding Fee of 25,000 by the
company and 25000 by each of the two
Directors paid within 15 days from the date
of receipt copy of the order.