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TMI BlogMEMBER'S RIGHT TO COPIES OF AUDITED FINANCIAL STATEMENTX X X X Extracts X X X X X X X X Extracts X X X X ..... MEMBER'S RIGHT TO COPIES OF AUDITED FINANCIAL STATEMENT - By: - Dr. Sanjiv Agarwal - Corporate Laws / IBC / SEBI - Dated:- 28-11-2013 - - Legislative History Section 136 on member's right to copies of audited financial statementcorresponds to Section 219 of Companies Act, 1956 dealing with Right of a member to copies of balance sheet and auditor s report The significant changes introduced in this provision are : (a) every Company is required to place separate audited accounts in respect of each of its subsidiary, on its website if any, (b) every member and debenture trustee shall be allowed to inspect the financial statements and other documents at registered office during business hours. (c) the exemption f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or sending the financial statements to members in less than 21 days before the date of meeting ,where approval from all the members entitled to vote was required, has been dispensed with. Statutory Provision of Section 136 This section corresponds to Section 219 of the Companies Act, 1956 and seeks to provide that a copy of financial statements including consolidated financial statement, if any, auditor s report along with annexures / attachments shall be sent to every member, every trustee for the debenture holder and all other persons who are so entitled, twenty one days before the date of general meeting. A specific manner of circulation may be prescribed by the Central Government. Listed company shall place its financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statements including consolidated financial statement on its website. Every company having subsidiary company shall place separate audited accounts of each of its subsidiary on the website. Every member, trustee, etc. is allowed to inspect the financial statements and auditor s report, etc., at the registered office of the company during business hours. This section also provided for penal provisions in case of any default. Member s, Debenture trustee s right to get copies of annual accounts According to sub-section (1) of this section, every member of the company, the trustee for the debenture-holders and every other person being the person so entitled, is entitled to get from the company, every year, a copy of financial statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent including consolidated financial statements (if applicable) ,which are to be laid at a general meeting of the company, comprising of:- i) Balance Sheet ii) Profit and Loss Account iii) Cash Flow Statement iv) Statement of change in equity v) Auditor s Report vi) Director s Report vii) Every other document required by law to be annexed or attached to the financial statement. Central Government may prescribe the manner of circulation of financial statements of companies having such net worth and turnover as may be required. This right to have copies of financial statements is over and above the provisions of Section 101 which provides for right to receive notice of general meeting. Obligation of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isted company under Listing Agreement Proviso to sub-section (1) provides that in the case of a company whose shares are listed on a recognised stock exchange, provisions shall be deemed to have been complied with, if the copies of the documents are made available for inspection at its registered office ,during working hours ,for a period of twenty-one days before the date of the meeting and a statement containing the salient features of such documents in the prescribed form or copies of the documents, as the company may deem fit, is sent to every member of the company and to every trustee for the holders of any debentures issued by the company not less than twenty-one days before the date of the meeting. Every listed company is requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to supply a copy of the complete financial statements with auditor s report and director s report, to such shareholders who ask for full financial statements. Every listed company is also required to place its financial statements including consolidated financial statements, if any, and all other documents required to be attached thereto, on its website, which is maintained by or on behalf of the company. In case of companies not having share capital, the financial statements and other documents required to be attached or annexed to it shall be required to be sent to all members and debenture holders, even if they are not entitled to receive the notice of general meeting in terms of section 101 . Now, companies are required to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare their financial statements by way of physical circulation, electronic communication and through websites, besides the right to inspect by the members or trustees of debenture holders. Financial statements of subsidiaries Every company (listed or unlisted) having subsidiary or subsidiaries shall: (a) place separate audited financial statements in respect of each of its subsidiary on its website, if any. (b) provide copy of separate audited financial statements if any shareholder demands a copy of the separate audited financial statements in respect of each of its subsidiary. Right to inspect Every company shall be under an obligation to allow every member or trustee of the holder of any debentures issued by the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany to inspect the financial statements and documents to be attached thereto stated under sub-section (1) at its registered office during business hours. This right is not available to debenture holders. In case of listed companies, copies of documents shall be available for inspection at its registered office during working hours for a period of 21 days before the date of meeting and company may send the salient features of financial statements to members and debenture trustees in prescribed form. That will be sufficient compliance of sub section (1). Penal provisions If any default is made in complying with the provisions of this section, the company shall be liable to a penalty of i) twenty-five thousand rupees and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) every officer of the company who is in default shall be liable to a penalty of five thousand rupees. Both penalties shall be imposed simultaneously. Rules to be Prescribed Rules are being prescribed separately with reference to the following: (a) Form of statement, in which the salient features of financial statements and documents are to be specified. (b) Manner of circulation of the financial statements having prescribed net worth and turnover. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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