23 Sep , 2021 By : Kanchan Joshi
NEW DELHI: The government has decided to grant extra time of up to two months beyond end of September for companies to hold their annual general meetings to finalise their FY21 accounts, according to an official order.
As per this, Registrars of Companies (RoCs) are authorised to give companies extra time under section 96 of the Companies Act. This section stipulates that companies have six months after the close of a financial year to hold their annual general meeting of shareholders and if there is any special reason, extra time of up to two months could be granted.
The extension is beneficial to companies who have not already held their AGMs. They would also get extra time for filing their annual accounts and annual returns with the RoCs as the due dates for these are linked to the date of holding the AGM.
The relaxation is granted after the government received requests from various quarters for extra time to hold the meeting.
“This extension of two months for holding AGM by corporate houses is a welcome move considering that during April to May, the coronavirus pandemic had disrupted the functioning of all businesses. Even at present the functioning of many corporate houses continues to be disrupted in many parts of the country particularly in southern and eastern India where the pandemic has not subsided," explained Jain.
The normal last date being 30 September, most of the corporate houses would have held their annual general meetings by now or would have issued notices and circulated audited accounts for holding the meeting by 30 September. Thus, the present extension will help only those corporate houses which haven’t issued notice yet for holding the AGM, explained Ved Jain, former president of Institute of Chartered Accountants of India (ICAI). Experts also said that if the extension had come earlier, it would have been a bigger relief.
AGM gives shareholders of companies an opportunity to interact with its directors and learn about past performance and future strategies. One of the purposes of this meeting is to present the audited accounts of the company and to get it approved by shareholders. It is also an occasion for electing directors and for selecting the auditors.
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