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4 things to learn from Reliance
An annual general meeting of shareholders is held once every year. If you own even one ordinary share of a company, you can attend this meeting. If you live in the same city where this is held, it's a good idea to attend it. As a shareholder, you may want to know what vision the company management has for the business.
Here, we list down 4 things about the recently held Reliance AGM:
The AGM typically starts with the chairman's speech. As an investor, you must watch out for forward looking statements made by them. Stock prices are influenced by events that could happen in the future. Addressing the RIL AGM, Chairman Mukesh Ambani announced investments of over Rs 2,00,000 crore in the next 12 to 18 months across businesses. He also announced the action plan for 4G telecom service under the brand name 'Jio' by December 2015. The company invested over Rs 90,000 crore over 5 years in the telecom business. RIL is also planning to give a push to e-commerce in the retail business.
Question and Answer session:
There are thousands of shareholders in a company. Most of them are unaware of the day to day working of the company. They are also not privy to the key decisions taken by the company's management. AGM provides you the platform to seek answers from the Board of Directors. You can ask them about the financial prospects of the company and also seek clarifications on various issues which may impact the business. According to media reports, many shareholders raised questions over RIL shifting focus to sectors like retail, media and telecom. Press reports suggest that questions were asked about prospects for profitability in these sectors. Refining and petrochemical businesses account for 84% of the company's operating profit. Shareholders were informed about the delay in commissioning refinery off-gas cracker to third quarter of 2016-17.
Voting on resolutions:
AGMs are an example of corporate democracy. Many financial decisions along with some administrative decisions like appointing directors and auditors, payment of remuneration to auditors or directors are passed in the meeting. They need the approval of majority of the shareholders. A resolution to that effect is put to vote. RIL also allows electronic voting facility for its shareholders on AGM resolutions. The company took shareholders approvals for remuneration and director appointments.
RIL shareholders were informed that the company aims to further strengthen its traditional polyester business after commissioning a 4,00,000 tons plant at Silvassa. By the end of the year, it also aims to be world's fifth largest producer of PTA (Purified Terephthalic Acid), a chemical mainly used in polyester production. In refining sector, RIL plans to start a coke gasification plant in Jamnagar by early 2016, which will be one of the largest clean coal initiatives in the world. RIL's retail arm, Reliance Retail, opened 930 new stores across India last year.
The total number of shareholders of Reliance Industries is 27,90,842 spread all over the country as of March 2015. Since the annual general meeting of Reliance Industries takes place in Mumbai, all are not able to attend. The total number of outstanding shares is 329 crore.