Is postponement of annual general meeting (AGM) any indication to poor return on equities? A study by proxy advisory firm IiAS shows that companies holding AGMs in September have reported lower median return on equity when compared to those that held their AGMs in August and July.
Postponing giving bad news, protracted negotiations with auditors, are the more obvious reasons for companies choosing to hold delayed AGMs," IiAS said in its report.
The fact that a large number of loss-making companies hold their AGMs in September is one of the reasons for the lower median return on equity. In 2015, 55 of the 470 companies reported losses - of these, 28 companies held their AGMs in September.
Regulations require companies to maintain an April to March accounting year (exceptions require National Company Law Tribunal approval), and to hold the AGM within 6 months of the closing of the year end (which is September for most companies). Companies will necessarily take about a month to complete audits, publish the annual report and then will have to give shareholders at least 21 days prior notice for the AGMs - that takes away the month of April and May. Therefore, June to September ..
Out of the S&P BSE 500 companies 470 of them maintain a 31-March year end. Of these 181 companies held their 2015 AGMs in September.
"Companies that in the past held AGMs before September, did so this year as well, which demonstrates robust internal processes and commitment to shareholders.
Postponing giving bad news, protracted negotiations with auditors, are the more obvious reasons for companies choosing to hold delayed AGMs," IiAS said in its report.
The fact that a large number of loss-making companies hold their AGMs in September is one of the reasons for the lower median return on equity. In 2015, 55 of the 470 companies reported losses - of these, 28 companies held their AGMs in September.
Regulations require companies to maintain an April to March accounting year (exceptions require National Company Law Tribunal approval), and to hold the AGM within 6 months of the closing of the year end (which is September for most companies). Companies will necessarily take about a month to complete audits, publish the annual report and then will have to give shareholders at least 21 days prior notice for the AGMs - that takes away the month of April and May. Therefore, June to September ..
Out of the S&P BSE 500 companies 470 of them maintain a 31-March year end. Of these 181 companies held their 2015 AGMs in September.
"Companies that in the past held AGMs before September, did so this year as well, which demonstrates robust internal processes and commitment to shareholders.
Read More - Equity News
Written by Unknown
We are Creative Blogger Theme Wavers which provides user friendly, effective and easy to use themes. Each support has free and providing HD support screen casting.
0 comments:
Post a Comment