Adjournment of meetings
This query is : Resolved
08 September 2010
for how many times can a board meeting can be adjourned? wil dat adjrnd Board meeting comply wid section 285?
09 September 2010
Hello,
As per my understanding there are no separate rules for adjournment for a board and General Meeting in a government company.
Regarding how many times a BM can be adjourned Law is silent. A board meeting can be adjourned for any number of times for valid reasons. However this adjournment would not be considered as an excuse for compliance of statutory requirements like holding of AGM within statutory time limit as mentioned in section 166 read with section 210.
As per section 288(2) the provisions of section 285 shall not be deemed to have been contravened merely by reason of the fact that a meeting of the Board which had been called in compliance with the terms of that section could not be held for want of a quorum. So as per my interpretation relaxation provided by section 288(2) is available only when a BM adjourned for want of quorum.
Best Regards
As per my understanding there are no separate rules for adjournment for a board and General Meeting in a government company.
Regarding how many times a BM can be adjourned Law is silent. A board meeting can be adjourned for any number of times for valid reasons. However this adjournment would not be considered as an excuse for compliance of statutory requirements like holding of AGM within statutory time limit as mentioned in section 166 read with section 210.
As per section 288(2) the provisions of section 285 shall not be deemed to have been contravened merely by reason of the fact that a meeting of the Board which had been called in compliance with the terms of that section could not be held for want of a quorum. So as per my interpretation relaxation provided by section 288(2) is available only when a BM adjourned for want of quorum.
Best Regards
09 September 2010
ADJOURNEMENT OF ANNUAL GENERAL MEETING
Yes there is no doubt that an annual general meeting held in accordance with section 166 can be adjourned. But as per DCA Clarification the adjourned annual general meeting must itself be held within the statutory period (including the period of extension thereof, if any allowed) as provided in section 166(1).
Extract of DCA Clarification
In case the accounts are not placed thereat, the same not being ready, it is no doubt open to the company concerned to adjourn the said annual general meeting to a subsequent date for laying the accounts but then, the adjourned annual general meeting must itself be held within the statutory period (including the period of extension thereof, if any allowed) as provided in section 166(1). That being so, procedure of adjourning the annual general meeting cannot be so adopted as to bypass the provisions of section 210 of the Act. Thus, in case the accounts are not placed at the annual general meeting or the adjourned annual general meeting, in either case, within the statutory period laid down in sub-section (3) of section 210 of the Act, the delinquent directors are liable for prosecution under sub-section (5) thereof.
You are requested not to take literal interpretation of this clarification as this is not limited to non-preparation of Annual Accounts.
Revert if there is any doubt.
Best Regards
Yes there is no doubt that an annual general meeting held in accordance with section 166 can be adjourned. But as per DCA Clarification the adjourned annual general meeting must itself be held within the statutory period (including the period of extension thereof, if any allowed) as provided in section 166(1).
Extract of DCA Clarification
In case the accounts are not placed thereat, the same not being ready, it is no doubt open to the company concerned to adjourn the said annual general meeting to a subsequent date for laying the accounts but then, the adjourned annual general meeting must itself be held within the statutory period (including the period of extension thereof, if any allowed) as provided in section 166(1). That being so, procedure of adjourning the annual general meeting cannot be so adopted as to bypass the provisions of section 210 of the Act. Thus, in case the accounts are not placed at the annual general meeting or the adjourned annual general meeting, in either case, within the statutory period laid down in sub-section (3) of section 210 of the Act, the delinquent directors are liable for prosecution under sub-section (5) thereof.
You are requested not to take literal interpretation of this clarification as this is not limited to non-preparation of Annual Accounts.
Revert if there is any doubt.
Best Regards
09 September 2010
thnx a lot sir...
bt doz dat adjourned BM (for want of quorum)agn adjourned for several times just for want of quorum would comply iwd the provisions of section 285??
bt doz dat adjourned BM (for want of quorum)agn adjourned for several times just for want of quorum would comply iwd the provisions of section 285??
10 September 2010
Hi,
There is no restriction in law for second or third adjournment, provided it is for a valid reason. For claiming the relaxation, regarding provisions of section 285, provided by section 288(2) such adjournment should be for want of quorum.
In other words if you adjourned your BM for several times due to lack of quorum, section 288(2) is there to protect you from violation of section 285. Reason being there is nothing in section 288(2) which talks about one time adjournment for want of quorum.
But BM arrangement without ensuring proper quorum and subsequent adjournment does not make any sense and may be objected by your directors.
Trust my reply would be of some help
Best Regards
There is no restriction in law for second or third adjournment, provided it is for a valid reason. For claiming the relaxation, regarding provisions of section 285, provided by section 288(2) such adjournment should be for want of quorum.
In other words if you adjourned your BM for several times due to lack of quorum, section 288(2) is there to protect you from violation of section 285. Reason being there is nothing in section 288(2) which talks about one time adjournment for want of quorum.
But BM arrangement without ensuring proper quorum and subsequent adjournment does not make any sense and may be objected by your directors.
Trust my reply would be of some help
Best Regards
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10 September 2010
thnx again sir...
regarding adjournment of AGM, reason of adjournment being delay in audit of accounts by the auditor..the CAG( Comptroller and Auditor General of India) has still not appointed any auditor for the company due to which delay has been made in finalisation of accounts..so please guide me how to comply with section 166 and 210??
regarding adjournment of AGM, reason of adjournment being delay in audit of accounts by the auditor..the CAG( Comptroller and Auditor General of India) has still not appointed any auditor for the company due to which delay has been made in finalisation of accounts..so please guide me how to comply with section 166 and 210??
10 September 2010
Hi Again,
No need to say thanks.
Delay in audit of accounts may be considered as a valid ground for extension of AGM. So fully use the same and file an application to ROC regarding extension for holding AGM under proviso to section 166(1).
The Registrar shall grant an extension of time for holding the annual general meeting of a company under the second proviso to sub-section (1) of section 166 only when the application for such extension is made to him before the expiry of the period laid down in sub-section (1) of that section.
If it is not possible for you to hold the annual general meeting within six months from the conclusion of the financial year, you are advised to make an application in the prescribed e-Form 61 electronically with the Registrar before the due date for holding the said meeting. The application may be made by a letter giving full justification for seeking extension of time.
For documents related to extension you are requested to share your ID through PM.
Best Regards
No need to say thanks.
Delay in audit of accounts may be considered as a valid ground for extension of AGM. So fully use the same and file an application to ROC regarding extension for holding AGM under proviso to section 166(1).
The Registrar shall grant an extension of time for holding the annual general meeting of a company under the second proviso to sub-section (1) of section 166 only when the application for such extension is made to him before the expiry of the period laid down in sub-section (1) of that section.
If it is not possible for you to hold the annual general meeting within six months from the conclusion of the financial year, you are advised to make an application in the prescribed e-Form 61 electronically with the Registrar before the due date for holding the said meeting. The application may be made by a letter giving full justification for seeking extension of time.
For documents related to extension you are requested to share your ID through PM.
Best Regards
10 September 2010
However ROC is quite strict regarding extension for delay in audit due the DCA clarification below:
Delay in completion of audit not a special reason for extension of time for holding annual general meeting
The liberal policy of granting extension of time to companies to enable them to call their annual general meetings on the ground that the audit of their account has not been completed or that their accounts have not yet been compiled or cast for submission to the auditors or for other similar reasons indicating slackness, negligence or deliberate default on the part of the managements or the auditors of companies, can no longer be justified. The law contemplates that the permissible interval between two consecutive annual general meetings should not be lightly extended. The Government has accordingly decided that delay in the completion of the audit of the annual accounts of a company should not ordinarily constitute a "special reason" justifying the grant of extension of time for holding its annual general meeting. Companies are, therefore requested to take all suitable steps to ensure that their annual accounts are audited in good time so that their annual general meetings may be called within the statutory time-limit.
Source: Press Note, dated 29-1-1959.
However you may still give it a try due to the involvement of CAG in your case which is beyond your control.
Delay in completion of audit not a special reason for extension of time for holding annual general meeting
The liberal policy of granting extension of time to companies to enable them to call their annual general meetings on the ground that the audit of their account has not been completed or that their accounts have not yet been compiled or cast for submission to the auditors or for other similar reasons indicating slackness, negligence or deliberate default on the part of the managements or the auditors of companies, can no longer be justified. The law contemplates that the permissible interval between two consecutive annual general meetings should not be lightly extended. The Government has accordingly decided that delay in the completion of the audit of the annual accounts of a company should not ordinarily constitute a "special reason" justifying the grant of extension of time for holding its annual general meeting. Companies are, therefore requested to take all suitable steps to ensure that their annual accounts are audited in good time so that their annual general meetings may be called within the statutory time-limit.
Source: Press Note, dated 29-1-1959.
However you may still give it a try due to the involvement of CAG in your case which is beyond your control.
10 September 2010
what is being followed since years is the AGM is held within the stipulations of section 166 and is being adjourned till the accounts are finalised...when the accounts get audited by the auditor and CAG then they are being adopted in the adjourned AGM which is held aftr mny months...so is this procedure a violation?
i had one more query that when the directors are appointed by the Government through GO as per the articles of the govt. company duly approved by the board as well, is it necessary to regularise them in the AGM?
Govt holds 99% shares in the company.
i had one more query that when the directors are appointed by the Government through GO as per the articles of the govt. company duly approved by the board as well, is it necessary to regularise them in the AGM?
Govt holds 99% shares in the company.
13 September 2010
For the purpose of compliance of section 166 read with section 210, there is a difference between non-finalisation of accounts and delay in Audit of accounts. Kindly observe DCA clarification mentioned above regarding sufficient cause for AGM extension.
Further as per my understanding there is no exemption is available to a Govt. Company from section 166 read with section 210. So the procedure adopted by your company may be considered as a violation, bcoz adjourned AGM must itself be held within the statutory period (including the period of extension thereof, if any allowed) as provided in section 166(1).
I would advise you to first figure out the reasons for delay boz this kind of delay on the part of CAG is not a normal one (may be anything missing at you end). After that write a letter to CAG, Delhi or visit CAG office regarding delay in appointment of auditor. Simultaneously file form-61 for AGM extension.
Regarding your second query ----section 255 to 257 are not applicable to a WO Govt. Company i.e. all the directors of a govt. co. shall be non-rotational directors. As per my personal understanding there is no need to regularize a directors appointed by the Government through GO as per the articles of the govt. company. Also check and interpret the language of GO. On a safer side you may go for the adoption of section 257.
Tx
Further as per my understanding there is no exemption is available to a Govt. Company from section 166 read with section 210. So the procedure adopted by your company may be considered as a violation, bcoz adjourned AGM must itself be held within the statutory period (including the period of extension thereof, if any allowed) as provided in section 166(1).
I would advise you to first figure out the reasons for delay boz this kind of delay on the part of CAG is not a normal one (may be anything missing at you end). After that write a letter to CAG, Delhi or visit CAG office regarding delay in appointment of auditor. Simultaneously file form-61 for AGM extension.
Regarding your second query ----section 255 to 257 are not applicable to a WO Govt. Company i.e. all the directors of a govt. co. shall be non-rotational directors. As per my personal understanding there is no need to regularize a directors appointed by the Government through GO as per the articles of the govt. company. Also check and interpret the language of GO. On a safer side you may go for the adoption of section 257.
Tx
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