Companies with weak financial performance continue to wait till the last minute to hold their annual shareholder meetings, proxy advisory Institutional Investor Advisory Services (IiAS) said in a report.

Ind-ASA norms

In FY16, companies holding their annual general meetings (AGMs) in September have had the lowest median return on equity.

However, with Indian Accounting Standard (Ind-ASA) requirements becoming mandatory and as compulsory auditor rotation falls due simultaneously for corporate India, meeting deadlines will become challenging, IiAS predicted.

Last year, the report found that 32 per cent of BSE 500 companies held their AGMs in August , and 38 per cent of the companies held AGMs in September 2016 (totalling a whopping 70 per cent), continuing the trend of September being the busiest for both corporate India and investors.

Companies holding their AGMs in September have the lowest median return on equity compared to companies that hold their AGMs in June or July or August, it found.

“That companies performing better are eager to hold their AGMs is belied only by the RoE of companies holding their AGMs in June. However, June AGM companies have, in FY15 and FY16, had lower RoEs; this is largely attributable to how public sector banks perform — since they dominate the AGM season in June,” IiAS said.

Lower median return

That a large number of loss-making companies hold their AGMs in September is one of the influencing reasons for the lower median return on equity. In 2016, 64 of the 477 companies reported losses — of these, 30 companies held their annual general meetings in September.

Delaying AGMs is unfair to investors, IiAS said. “In holding AGMs towards September, companies may have already had the opportunity to announce the first quarter results of the next financial year — which may help quell possible shareholders’ concerns over the previous year’s performance.

“However, the data for the past four years shows this is seldom the case. Investors have the right to know how the company has performed and (hold a) dialogue with management.

“Delaying the interaction serves limited purpose,” the report concluded.