According to PRIME Database, 11,252 resolutions were proposed to be passed at AGMs, EGMs, postal ballots and court-convened meetings (CGMs) of 1,534 NSE-listed companies from January till September 13 (for resolutions coming up until September 30 2016). This was 9 per cent less than the 12,432 resolutions in the same period last year. "Significantly, the most number of resolutions, which stands at 3,837, relate to board change," says Pranav Haldea, Managing Director, PRIME Database. This is followed by resolutions related to auditors, which have to be rotated after a certain period.
Only about half the companies, 829, had a resolution related to dividends. A total of 380 resolutions related to raising of capital, both debt and equity.
According to the analysis, 11,252 resolutions translate into an average of 5.46 resolutions per meeting and 7.33 resolutions per company. Postal ballots are increasing by the day. As many as 793 resolutions were put up for shareholders' approval through this means.
The number of ordinary resolutions proposed to be passed is 8,617 (77 per cent) while the number of special resolutions is 2,635 (23 per cent). The highest number of AGMs (203) will take place on September 30, 2016. As always, bulk of AGMs are in September, especially in the last one week of September.
This is a disturbing phenomenon as studies have shown that a large majority of companies that have late AGMs are typically poor performers.