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Microlesson · 5-min read

Right of Members to Copies of Audited Financial Statement (Section 136)

# Right of Members to Copies of Audited Financial Statement — Section 136

## 1. Who must receive the documents

A copy of the following must be sent at least 21 days before the general meeting (14 days for a Section 8 company):

  • Financial Statements (FS)
  • Consolidated Financial Statements (CFS)
  • Auditor's report
  • Every document required to be attached to the FS

Entitled persons:

  • Every member of the company
  • Every trustee of debenture-holders
  • All other persons entitled to receive notice of general meeting

> Note: If a member asks for a copy of the separate FS of a subsidiary (audited or unaudited), the company must provide it.

## 2. Shorter Notice (less than 21 days)

Documents may be sent with shorter notice if agreed by any one of:

Company typeRequired consent
Company with share capitalMajority in number of members holding ≥ 95% of PUSC (with voting rights)
Company without share capitalMembers holding ≥ 95% of voting power at the meeting
Where AGM notice itself is sent on shorter noticeShorter-notice consent for AGM is sufficient

## 3. Special Relaxation — Nidhi Company

Notice and FS need NOT be served on members holding shares of face value up to the lower of ₹1,000 or 1% of PUSC, provided:

  • A public notice is given in a newspaper circulating in the district of the registered office stating date, time & venue of AGM, AND
  • FS (with enclosures) are available for inspection at the registered office and are affixed on the notice board.

## 4. Manner of Sending FS to Members

Companies covered (mandatory electronic mode where applicable):

  • Listed Company, OR
  • Public company with net worth > ₹1 crore AND turnover > ₹10 crore
Member holdingMode of sending
Demat form with email registered with depositoryElectronic mode
Physical form but consented to electronicElectronic mode
All other membersPhysical despatch by recognised mode u/s 20

Other companies: Sent in any manner permitted under Section 20.

## 5. Listed Company — Deemed Compliance

A listed company is deemed to comply if, at least 21 days before the meeting:

  • Copies of documents are available for inspection at the registered office during working hours for 21 days before the meeting, AND
  • A statement of salient features (Form AOC-3) OR copy of documents is sent to members & trustees (unless a shareholder asks for the full FS).

## 6. Accounts to be placed on Website (Listed Company)

Must place on its website:

  • FS and CFS
  • Separate audited accounts of every subsidiary
  • All documents required to be attached

Foreign Subsidiary (incorporated outside India):

  • If not required to get FS auditedUnaudited FS to be placed.
  • If FS is in a language other than English → also place the English translation.
  • If foreign subsidiary is required to prepare CFS → such CFS to be placed on website.

## 7. Inspection

The company must allow every member and every trustee of debenture-holders to inspect the above documents at the registered office during business hours.

## 8. Penalty for Default

DefaulterPenalty
Company₹ 25,000
Officer in default₹ 5,000

Worked example

### Example 1

Example — Nidhi Company relaxation: A Nidhi Co. has PUSC of ₹50 lakhs. A member 'M' holds shares of face value ₹400. The face-value threshold = lower of ₹1,000 or 1% of ₹50,00,000 = lower of ₹1,000 or ₹50,000 = ₹1,000. Since ₹400 < ₹1,000, no individual notice/FS need be served to M, provided the company has issued public newspaper notice AND affixed the FS on the notice board at the registered office.

⚠️ Common exam mistakes

  • Forgetting that the time period is 14 days (not 21 days) for a Section 8 company.
  • Confusing PUSC threshold (95%) for shorter notice with the simple-majority requirement applicable to other resolutions.
  • Believing FS need not be sent to debenture trustees — they are entitled persons under Section 136.
  • Thinking foreign subsidiary FS need not be placed on the website if they are unaudited — unaudited FS must still be placed (with English translation if originally in another language).
  • Treating the ₹1,000 / 1% Nidhi relaxation as automatic — it is conditional on public notice AND inspection at registered office.
Bare-Act text Section 136 · Companies Act, 2013 · click to expand
Section 136 — Right of Members to Copies of Audited Financial Statement (key provisions): A copy of the FS, CFS, auditor's report and every document required to be attached, which are to be laid before a company in its general meeting, shall be sent at least 21 days before the date of the meeting (14 days for Section 8 company) to every member, trustee for debenture-holders, and all other persons entitled to receive notice. Documents may be sent with shorter notice if agreed by the prescribed majority. Listed companies must place such documents on their website. Failure to comply attracts a penalty of ₹25,000 on the company and ₹5,000 on every officer in default.
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