Corporates convening general meetings at a shorter notice, less than the 21 days mandated under the companies law, can circulate financial statements during that period, according to the government.
Under the Companies Act, 2013, general meeting can be called only by giving at least 21 days notice.
In case of a general meeting being held within a shorter notice, it has to be approved by a minimum 95 per cent of the members.
The Corporate Affairs Ministry has clarified that in case a general meeting is convened at a shorter notice, financial statements too can be circulated during that time.
"A company holding a general meeting after giving a shorter notice...May also circulate financial statements (to be laid/considered in the same general meeting) at such shorter notice," the ministry said in a recent circular.
Besides, companies can place unaudited financial statements of their subsidiaries subject to certain conditions.
This would be applicable to foreign subsidiary which is not required to get its financial statements audited as per legal requirements prevalent in the country of its incorporation and those that do not get such financial statements audited.
However, the ministry has said that such financial statements need to be translated into English, if the original accounts are not in that language.
"Further, the format of accounts of foreign subsidiaries should be, as far as possible, in accordance with requirements under Companies Act, 2013. In case, this is not possible, a statement indicating the reasons for deviation may be placed/ filed along with such accounts," the circular said.
The circular has been issued after stakeholders' sought clarity on both matters.
Leading consultancy KPMG in India said these clarifications indicate that the ministry is committed to addressing the practical challenges faced by corporates while implementing the requirements under the Companies Act, 2013.
These clarifications are a step in the right direction and echo the ministry's efforts "to nurture a supportive regulatory environment," it added.
