Right of Members to Copies of Audited Financial Statement (Section 136)
# Section 136 — Right of Members to Copies of Audited Financial Statement
## 1. Who is Entitled to Receive Copies?
Copies of audited Financial Statements + Consolidated FS + Auditor's Report + other documents shall be sent to:
Every member of the company
Every trustee for the debenture holders
All other persons entitled to receive them
## 2. Timing of Despatch
General Rule: At least 21 days before the General Meeting.
Shorter Notice Allowed: Less than 21 days is allowed if members holding ≥ 95% of the voting power (majority entitled to vote) agree.
## 3. Mode of Circulation (Rule 11)
In case of Listed companies AND Public companies with net worth > ₹1 crore AND turnover > ₹10 crore, FS may be sent:
Type of Member
Mode
Shareholding in demat form with email ID registered with Depository
Electronic mode
Shareholding in physical form, but members have positively consented in writing
Electronic mode
All other cases
Physical copies through recognised mode under Section 20
## 4. Special Provisions
### (a) Listed Company — Alternative Compliance
Instead of sending copies to every member, the company may:
1. Make the documents available for inspection at registered office during working hours for 21 days (14 days for Section 8 companies) before the meeting; AND
2. Send a statement containing salient features of the documents (in prescribed form), or copies as the company deems fit, to every member and debenture trustee at least 21 days before the meeting.
3. Provided shareholders do not ask for full FS.
Website obligations of Listed Company:
Must place FS (including CFS) and all attached documents on its website.
A listed company with subsidiary(ies) (in India or outside) must:
Place separate audited accounts of each subsidiary on its website.
Provide a copy of separate audited FS of each subsidiary to any shareholder who asks for it.
If a foreign subsidiary is not required to be audited in its country of incorporation and is not audited, the holding Indian listed company may place such unaudited FS on its website. If in a foreign language, an English translation must also be placed.
### (b) Nidhi Company — Special Relief
For members holding shares ≤ ₹1,000 in face value, OR ≤ 1% of total paid-up share capital (whichever is less):
Nidhi Company need not individually send FS.
Instead, give intimation by public notice in newspaper circulating in the district of the registered office, stating date, time and venue of AGM.
FS with enclosures must be available for inspection at registered office AND affixed on the notice board.
Members can still vote in person or through proxy.
## 5. Penalty for Contravention
Person
Penalty
Company
₹25,000
Every officer in default
₹5,000
Worked example
### Example 1
Example 1 — Listed Co. Electronic Mode
A listed company has 10,000 shareholders. 7,000 hold shares in demat form with email IDs registered with the depository; 1,500 hold physical shares and have given written consent for e-mode; 1,500 hold physical shares without consent.
A Nidhi Company has paid-up capital of ₹1 crore. A member holds shares of face value ₹800 (which is also less than 1% of ₹1 crore = ₹1,00,000).
Analysis: The threshold is the LOWER of ₹1,000 in face value OR 1% of paid-up capital. Here, ₹800 ≤ ₹1,000 ✓ AND ₹800 ≤ ₹1,00,000 ✓.
Conclusion: The Nidhi can dispense with individual despatch to this member and give notice via newspaper plus board notice + inspection at registered office.
### Example 3
Example 3 — Shorter Notice
A company wants to despatch FS only 15 days before AGM. Members holding 96% of voting power consent in writing.
Conclusion: Permitted, as the 95% threshold is met. If consent were only 90%, despatch must be made at least 21 days in advance.
⚠️ Common exam mistakes
Stating 21 days is mandatory without exception — Section 136 itself allows shorter notice if ≥ 95% of voting power consents.
Confusing the inspection window for listed companies (21 days) with that for Section 8 companies (14 days).
Forgetting that the electronic mode option is available only to listed companies AND eligible public companies (net worth > ₹1 crore AND turnover > ₹10 crore — both conditions).
Applying the Nidhi exemption to ALL small shareholders — it applies only where the FACE VALUE is ≤ ₹1,000 OR shareholding is ≤ 1% of paid-up capital, whichever is LESS (i.e., the stricter threshold).
Forgetting that even for foreign subsidiaries not audited abroad, the holding listed company must still place such unaudited FS (with English translation if needed) on its website.
Bare-Act text Section 136 · Companies Act, 2013 · click to expand
Section 136(1): Without prejudice to the provisions of section 101, 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.
Provided 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 and to every trustee.
Section 136(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.