S ENDING ANNUAL REPORTS TO SHARE HOLDERS Section 219(1) in the Companies Act, 1956 is titled right of members to copies

of Balance Sheet and Auditors report and is as follows: (1) A copy of every balance sheet (including the profit and loss account, the auditors' report and every other document required by law to be annexed[ or attached,, as the case may be, to the balance sheet) which is to be laid before a company in general meeting shall, not less than twenty- one days, before the date of the meeting, be sent to every member of the company, to every trustee for the holders of any debentures issued by the company, whether such member or trustee is or is not entitled to have notices of general meetings of the company sent to him, and to all persons other than such members or trustees, being persons so entitled: The section also provides for when such compliance can be avoided. The proviso of the section is as follows; Provided that (a) in the case of a company not having a share capital, this sub- section shall not require the sending of a copy of the documents aforesaid to a member, or holder of debentures, of the company who is not entitled to have notices of general meetings of the company sent to him; (b) this sub- section shall not require a copy of the documents aforesaid to be sent(i) to a member, or holder of debentures, of the company, who is not entitled to have notices of general meetings of the company sent to him and of whose address the company is unaware; (ii) to more than one of the joint holders of any shares or debentures none of whom is entitled to have such notices sent to him; (iii) in the case of joint holders of any shares or debentures some of whom are and some of whom are not entitled to have such notices sent to them, to those who are not so entitled; 1[ (iv) in the case of a company whose shares are listed on a recognised stock exchange, if the copies of the documents aforesaid 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 aforesaid, 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 (c) if the copies of the documents aforesaid 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 all the members entitled to vote at the meeting The expression documents as prescribed by law will include the Auditors report (which is to be attached with the Balance sheet and annexed with P&L Account as per section 216 of the Act), Board of Directors report (under section 217 of the act). If default is made in complying with the provisions the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees as per section 219(3) and (4) of the Act ANNUAL GENERAL MEETING Section 166 of the companies act mandates an annual general meeting to be held every year at least once. (1) Every company shall in each year hold in addition to any other meetings a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next: Provided that a company may hold its first annual general meeting within a period of not more than eighteen months from the date of its incorporation; and if such general meeting is held within that period, it shall not be necessary for the company to hold any annual general meeting in the year of its incorporation or in the following year: Provided further that the Registrar may, for any special reason, extend the time within which any annual general meeting (not being the first annual general meeting) shall be held, by a period not exceeding three months.] (2) Every annual general meeting shall be called for a time during business hours, on a day that is not a public holiday, and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate.[ Provided that the Central Government may exempt any class of companies from the provisions of this sub- section subject to such conditions as it may impose: Provided further that(a) a public company or a private company which is a subsidiary of a public company, may by its articles fix the time for its annual general meetings and may also by a

resolution passed in one annual general meeting fix the time for its subsequent annual general meetings; and (b) a private company which is not a subsidiary of a public company, may in like manner and also by a resolution agreed to by all the members thereof, fix the times as well at the place for its annual general meeting. The annual general meeting must not be delayed on the fact that the accounts have not been prepared. It is a statutory requirement and in such event the course of action must be to hold the meeting within prescribed time and can be adjourned to a suitable date1. Sub-section 3 (b) of section 210 specifies that the company is required to hold its annual general meeting within six months from the end of the financial year. There may be a contradiction in such matters which has been clarified by the Ministry of Corporate Affairs As per the circular issued by the then Department of Company Affairs where a company holds its annual general meeting within the time prescribed under section 166, though such a meeting is held beyond the period of six months from the close of its financial year {as required under section 210(3)(b)}and the company files its annual return within 60 days of the holding of the said meeting, no action should be taken against the company for default of section 159 or 166 nor additional fee be levied in such a case in respect of the filing of the annual return and audited accounts2 In case of default as to holding an annual general meeting within statutory time period the default section 168 penalizes the company, and every officer of the company who is in default, with fine
which can extend to five thousand rupees in the case of a continuing default, with a further fine which can extend to two hundred and fifty rupees for every day for which default continues.

Full text of circular

With reference to the correspondence resting with your letter No. Sec.166/5694 dated 20-7-1964 on the above subject, I am directed to say that the question raised by you has been carefully examined in the Department. From the strictly legal point of view, the time within which an AGM of a company is required to be held is governed solely by section 166 of the Companies Act, 1956 and the date on which an AGM is required to be held has no direct relationship with the financial year of a company.
1

As held in SudhiR Kumar SeaL V Assnt. ROC (1979)49 Com Cases(cal), M.D. Mundhra v Assnt. ROC (1980) 50 Com Cases 346 (Cal), Sunil Dev vs Delhi Cricket association, (1994) 80 Com Cases 174(Del)
2

Circular No. 8/45(166)/64-PR dated 12-1-1965

Accordingly, the Registrar's powers to grant extension of time under the second proviso to section 166(1) does not become exercisable if the extension sought by the company is for holding the meeting falling within the time-limits mentioned in the said section 166 and is asked solely on the ground that it has not been able to prepare the accounts for the period mentioned in section 210(3). Notwithstanding the legal provision aforesaid, the board is of the view for administrative and practical consideration where a company approaches for the grant of extension of time for holding the annual general meeting in terms of the proviso to section 166(1) of the Act, the Registrar may continue to give the required extension for the holding of AGM beyond the period of six months from the close of the financial year of the company as contemplated under section 210(3) even though the time-limit for holding the meeting as per section 166 may not have reached. It is considered that apart from facilitating the smooth working of companies, such a practice would be administratively desirable as well. It was also in this context that the Department had earlier advised the field offices and companies which sought clarification on the point that sections 166 and 210 should be read together and if a breach of the provisions of one or the other of the two sections is to be avoided, an annual general meeting should be held in the earliest of the three relevant dates prescribed under these two sections (vide item No. 27 of interpretation, explained above, Circular No. 8/16(1)/61-PR dated 25-2-1961.) However, when it comes to determining for purposes of legal proceedings or levy of additional fees as to whether there has been a default in holding the AGM it would no doubt be necessary for the Registrar to continue the provisions of section 166 strictly in the manner indicated above. For this purpose the financial year of a company or the provision of section 210 is irrelevant. In other words, where a company holds its AGM within the time prescribed under section 166, though such a meeting is held after the expiry of six months from the close of its financial year and the company files its annual return within 42 days of the holding of the said meeting (now extended to 60 days), no action should be taken against the company for default of section 159 or 166 nor additional fee be levied in such a case in respect of the filing of the annual return and audited accounts.