CONDUCTING BM & AGM ON SAME DAY FOR APPROVAL OF FINANCIALS MAY ATTRACT PENALTIES AND RESULT IN COMPLIANCE ISSUE.

 CONDUCTING BM & AGM ON SAME DAY FOR APPROVAL OF FINANCIALS MAY ATTRACT PENALTIES AND RESULT IN COMPLIANCE ISSUE.

 Conducting a Board Meeting (BM) and Annual General Meeting (AGM) on the same day to approve financial statements is a compliance risk and not in line with good corporate governance.

STANLEY OEM SOFAS LIMITED

In the matter of M/s Stanley OEM Sofas Limited, it is cautioned that conducting the Board Meeting and the Annual General Meeting (AGM) on the same day for approval of financial statements may attract penalties under the Companies Act, 2013.

SECTION 134 OF THE COMPANIES ACT, 2013

As per Section 134 of the Act, the financial statements must be approved by the Board of Directors before being presented to the shareholders in the AGM. Adequate time must be allowed between the BM and AGM to:

•Finalize board-approved financials;

•Ensure proper dispatch of financials and AGM notice to shareholders (at least 21 clear days before the AGM as per Section 101); and

•Enable shareholder review and compliance with Secretarial Standards (SS-1 & SS-2).

BOARD MEETING & AGM CONVENED ON THE SAME DAY

•The ROC has raised concerns on how the company complied with the notice requirements under Section 101 & rules made thereunder with supporting documents like Notice, Board Minutes etc.

ROC BANGALORE IMPOSED A PENALTY OF ₹40,000

ROC Bangalore imposed a penalty of ₹40,000 on the company and its directors for non-compliance with Sec 101 of the Companies Act, 2013.

RECOMMENDATION:

AVOID PRACTICE OF PAPER MEETINGS.

Avoid conducting BM and AGM on the same day. Schedule the AGM only after dispatching AGM notice and financials duly approved by the Board, to avoid non-compliance and penalties.

 

R V SECKAR FCS,LLB 79047 19295