Section 136: Right of member to copies of audited financial statement
This section is for ensuring that members of a company have access to its audited financial statements and other required documents before a general meeting.
Penalty
(3) If any default is made in complying with the provisions of this section, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.
The section, clause by clause
What the section says
In plain terms
(1)7*** a copy of the financial statements, including consolidated financial statements, if any, auditor’s report and every other document required by law to be annexed or attached to the financial statements, which are to be laid before a company in its general meeting, shall be sent to every member of the company, to every trustee for the debenture- holder of any debentures issued by the company, and to all persons other than such member or trustee, being the person so entitled, not less than twenty-one days before the date of the meeting:
A company must send a copy of its financial statements, auditor's report, and other required documents to every member, trustee for debenture-holders, and other entitled persons at least 21 days before the general meeting, unless members holding 95% of the paid-up share capital or total voting power agree to a shorter notice period.
proviso8[Provided that if the copies of the documents are sent less than twenty-one days before the date of the meeting, they shall, notwithstanding that fact, be deemed to have been duly sent if it is so agreed by members— (a) holding, if the company has a share capital, majority in number entitled to vote and who represent not less than ninety-five per cent. of such part of the paid-up share capital of the company as gives a right to vote at the meeting; or
(1)(b)having, if the company has no share capital, not less than ninety-five per cent. of the total voting power exercisable at the meeting:
provisoProvided further that] in the case of a listed company, the provisions of this sub-section shall be deemed to be 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 unless the shareholders ask for full financial statements:
proviso1[Provided also] that the Central Government may prescribe the manner of circulation of financial statements of companies having such net worth and turnover as may be prescribed:
provisoProvided also that a listed company shall also place its financial statements including consolidated attached other financial thereto, on its website, which is maintained by or on behalf of the company:
(1)statements, documents required any, and all be to if 2[Provided also that every listed company having a subsidiary or subsidiaries shall place separate audited accounts in respect of each of subsidiary on its website, if any:
provisoProvided also that a listed company which has a subsidiary incorporated outside India (herein referred to as “foreign subsidiary”)—
(1)(a)where such foreign subsidiary is statutorily required to prepare consolidated financial statement under any law of the country of its incorporation, the requirement of this proviso shall be met if consolidated financial statement of such foreign subsidiary is placed on the website of the listed company;
(1)(b)where such foreign subsidiary is not required to get its financial statement audited under any law of the country of its incorporation and which does not get such financial statement audited, the holding Indian listed company may place such unaudited financial statement on its website and where such financial statement is in a language other than English, a translated copy of the financial statement in English shall also be placed on the website.]
(2)A company shall allow every member or trustee of the holder of any debentures issued by the company to inspect the documents stated under sub-section (1) at its registered office during business hours. 3[Provided that every company having a subsidiary or subsidiaries shall provide a copy of separate audited or unaudited financial statements, as the case may be, as prepared in respect of each of its subsidiary to any member of the company who asks for it.]
A company must allow members or trustees of debenture-holders to inspect the financial statements and other documents at its registered office during business hours, and provide a copy of separate financial statements for each subsidiary to any member who requests it.
(3)If any default is made in complying with the provisions of this section, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.
If a company fails to comply with these requirements, it will be liable to a penalty of 25,000 rupees, and every defaulting officer will be liable to a penalty of 5,000 rupees.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Ins. by Act 22 of 2019, s. 21 (w.e.f. 22-1-2021).
- 2. The Proviso ins. by s. 27, ibid. (w.e.f. 22-1-2021).
- 3. Subs. by Act 1 of 2018, s. 37, for the Explanation (w.e.f. 19-9-2018).
- 4. Ins. by Act 22 of 2019, s. 21 (w.e.f. 22-1-2021).
- 5. Subs. by Act 29 of 2020, s. 27, for sub-section (7) (w.e.f. 22-1-2021).
- 6. Ins. by s. 27, ibid. (w.e.f. 22-1-2021).
- 7. The words and figures “Without prejudice to the provisions of section 101” omitted by Act 1 of 2018, s. 38, (w.e.f. 9-2-2018).
- 8. Subs. by s. 38, ibid., for “Provided that” (w.e.f. 9-2-2018).
- 1. Subs. by Act 1 of 2018, s. 38, for “Provided further” (w.e.f. 9-2-2018).
- 2. Subs. by s. 38, ibid., for the Fourth proviso (w.e.f. 9-2-2018).
- 3. The proviso ins. by s. 38, ibid. (w.e.f. 9-2-2018).
- 4. The words and figures “within the time specified under section 403” omitted by s. 39, ibid., (w.e.f. 7-5-2018).
Referred to by
Search the whole Act, or ask it a question, in the interactive browser.
Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.