If a company needs to resolve a problem

in between annual general meetings, it

may call an extraordinary general
meeting.
At the annual general meeting, the CEO
and director typically speak, and present
annual report, which contains information
for shareholders about its performance
and strategy.
Generally, Company Secretary would
arrange for the meeting, would inform
shareholders about agenda, place and
issues to be discussed in AGM, well in
advance

Generally meeting starts with voting on
resolutions
Chief election officer is responsible for
counting of votes
Voting can be done simply by counting
number of hands (show of hands) or by
proxy
This is followed by strategy and
performance discussion and lastly
questions from investors are discussed
Disadvantage of manual counting?
What do smaller listed companies do to
conduct AGM?
They hire individuals, some of their own
employees
Provide these individuals with travelling
cost etc. to be present in meetings
Why does this philosophy work in India?

Ordinary resolutions such as
election and removal of directors,
appointment of external auditors,
remuneration of directors, payment of
dividend, and the routine matters relating
to the conduct of a company are passed
with the approval of more than 50 per
cent of the shareholders present and
voting.
Special resolutions such as
buy-back of shares, proposed merger or
de-merger, changing the name of the
company, altering the registered address
of the company from one state to another,
voluntary winding up of the company
require approval of 75 per cent of those
present and voting.
Shareholders who do not attend the
meeting in person are asked to vote by
proxy
The proxy process or proxy voting is
the term used to describe the means for
shareholders to participate in a companys
annual shareholders meeting, without
attending the meeting.

Shareholders may vote by proxy online, by
mail or by telephone.
A proxy also refers to the authority or
instrument that permits another individual
to vote on a shareholders behalf at an
annual or special shareholder meeting
(like investing in Mutual funds)
Proxy may also mean the person
empowered to act as an agent to vote on
behalf of the shareholder.
Duration of annual general Meeting
- Generally 1-1.5 hours
- In case of India Bulls 15 minutes (all
time record low)
SEBI, investigating the matter
Voting Pattern of MFs for 2011-
12
In 2010, a SEBI circular required
mutual funds (MF) to vote on
resolutions and publicly disclose their
voting records.
Why were MFs not voting?
MFs invest in 500-600 firms

AGMs generally line up all together

They are suppose to look and made
decision on each resolution
Best alternative is to outsource to Proxy
advisory firms
Proxy advisory firms

These firms recommend how an investor
should vote on resolutions.
In the US, where the practice is pretty
much entrenched
It is estimated that MFs pay around 0.1
per cent of their assets under
management (AUM) as fees for such
advice.
With an estimated AUM of just over Rs 7
lakh crore in India, the growth potential
for proxy advisory firms can be enormous.
In India, mainly two proxy advisory firms
are operating
- InGovern and IIAS
- Institutional investor Advisory Services
India
Scope of services
Voting Recommendations
Corporate Governance research and
scorecards
Risk Monitoring
Directors and Executive Compensation
analysis

9.0 percent of companies were non-
complaint with clause 49 of companies
act; with less than 50.0 percent
independent directors and no independent
chairman
9.0 percent of directors have outside
directorships in more than 10 public
companies
One in five directors attend less than 75.0
percent of board meetings
22.0 percent of independent directors
have served on the board for more than 9
years


Only 45 companies had audit committees
comprising only of independent directors
13 companies have not constituted a
remuneration committee
53 companies have had the same auditor
for over five years

HDFC Mutual Fund, the countrys one of
the largest asset manager, voted in 393
resolutions, about 80 per cent of the
approximate 470 resolutions.
In 2011-12, it had voted in about 40 per
cent of the proposals.

Top MF firms such as HDFC MF and ICICI
Prudential, when they voted, hardly
opposed the management.
For example, HDFC MF voted in favor of
390 proposals and against three.
In comparison, a survey of voting trends
by MFs in the US showed that they
disagreed with the management 5-20
per cent of the times