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AGM notice and financials

DHIRAJ JOHN MATTAM (NIL) (73 Points)

07 December 2020

Is this mandatory to attach financials with AGM notice? Kindly advice.

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12 Replies

JATINDER KUMAR (Accountant) (3662 Points)
Replied 07 December 2020

Yes.......

sabyasachi mukherjee (26132 Points)
Replied 07 December 2020

Who told?

Chirag (Professional) (1979 Points)
Replied 07 December 2020

Not Necessarily, You can send Them Separately by complying the timing requirements as per companies act, But, It's a good practice to send them with Notice..

sabyasachi mukherjee (26132 Points)
Replied 07 December 2020

Agm is being convened for adoption of annual accounts and audit .
So sending of audit and accounts and financial reports stands irrelevant.

Chirag (Professional) (1979 Points)
Replied 07 December 2020

It's Mandatory Requirement Under the Act,Even It's An ordinary business, F/S are required to be send to every member {to other person(s)} ,For listed company, it may provide facility at least 21 days before meeting and stmt containing salient feature should be sent to all, except compliance of LODR like newspaper publication ,outcome and all..

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sabyasachi mukherjee (26132 Points)
Replied 08 December 2020

Chirag
though the law says that sending of financial accounts and reports are mandatory before the agm.
IN ACTUAL PRACTICE THE AUDIT AND ACCOUNTS REPORT ARE SEND AFTER THE SHAREHOLDERS GIVES THEIR CONSENT IN THE AGM.
THE REPORT AND ACCOUNTS ARE AVAILABLE FOR EVERY SHAREHOLDER IN THE ANNUAL GENERAL MEETING.
The law provides that it should reach 21days before the date of AGM.
I HOPE THERE IS NO AMBIGUITY.

Chirag (Professional) (1979 Points)
Replied 08 December 2020

@ sabyasachi, it's a wrong practice, I have not seen any company to send financials after approved by shareholders in AGM, what you are saying may be done by private companies with limited shareholders only...simple logic, If shareholders don't know anything about financials how they can adopt it during AGM, go through whole Financials and asking Q&A during AGM is time consuming matter and that's why law provide it ... It's a governance point of view and also from law side...

ayusmita (Tax consultant) (5885 Points)
Replied 08 December 2020

No it is not mandatory to attach financial statement with AGM notice
but will writing the notice for AGM you have to mention the financial increase and decrease or say comparison from previous to current year is mandatory
writing is mandatory attachment is not

Chirag (Professional) (1979 Points)
Replied 08 December 2020

Yes, It's not mandatory to attach finacials with AGM notice but in this case it to be send seperatley at least 21 days before meeting, It's a discretion to attach with AGM Notice but sending is regulatory requirement. and good governance measure.

ayusmita (Tax consultant) (5885 Points)
Replied 08 December 2020

What you say about sending is right and it should be done in that way but what Sabyasachi says above is too right

And the ans to above person question is no

It's not mandatory if you want you can

sabyasachi mukherjee (26132 Points)
Replied 09 December 2020

@ chirag

I hope u are not aware of the same.
As per company law it is mandatory as per Sec 136 to copies of financial statement within 21 days before the date of the meeting.
But in actual practice it

Chirag (Professional) (1979 Points)
Replied 09 December 2020

@ sabyasachi, I am very well aware of it, but as governance professional I will not recommend it... rest is on one who want to do , Original Query was attaching F/S with Notice is mandatory ? I give it In negative way, but if law prescribe sending it we have to follow it we can't bypass it... For OPC & Closely Held Private companies ,when Shareholders are same as director you can laid it before Shareholders during AGM, but For listed company even private listed companies, It's an obligation not under companies act while Under SEBI regulations, Specially Reg.30,34,and Reg. 47 and practice is what Companies Send Annual Report which Includes All Notice + Board Report + F/S + Auditors Report ,So, It's a matter of Governance....After Meeting one can provide only CTC on demand, while Sec. 136 prescribe a substantial right of shareholder to get it, and obligation on company to send it or provide opportunity to inspect (at least 21 days) .As I said For Closely Held Company no shareholder protest, If they don't get F/S before meeting, resolution to approve is also passed smoothly...so that's why it become practice which should be avoided, as a non compliance... that's my view, So I am not completely agree on it.