26.08.2020
Smt.
Nirmala Sitharaman,
Hon’ble
Minister of Finance & Minister of Corporate Affairs,
New Delhi – 110001
Madam,
Subject: Request for extension of due date for holding Annual General Meeting (AGM) under the Companies Act, 2013
for companies whose financial year has
ended on 31.03.2020
1. We draw your kind attention to General
Circular (GC) No. 28/2020 dated 17th August, 2020 whereby the
Ministry of Corporate Affairs has, after considering the representations for
extension of AGM for the financial year ended 31.03.2020, have asked the
Companies to seek extension of time in holding AGM with the concerned Registrar
of Companies on or before 29.09.2020. The aforesaid GC also mentions procedural
relaxations granted vide GC 20/2020 dated 21.04.2020 to conduct the AGM through
video conferencing (VC) or other audio-visual means (OAVM).
2. Whereas the procedural relaxations
granted vide aforesaid GC 20/2020 dated 21.04.2020 would go a long way in
mitigating hardships for conducting AGM, however, at present, the companies are
struggling even to finalize their financial statements for the financial year
ending 31.03.2020. These financial statements would then be required to be
audited by the statutory auditors of the company for laying before the AGM.
3. Your goodself is aware that due to
nation-wide lockdown in the months of March, April and May, 2020 and the
staggered process of unlocking from June, 2020 on account of Covid-19, the
offices of the companies as well as of their Chartered Accountant auditors have
largely remained closed. Since the Covid-19 infections are still increasing
exponentially, the level of activity in the offices of the Companies is limited
to achieving day-to-day functioning for running the business. Consequently,
finalization of financial statements for the financial year 2019-20 has taken a
backseat and priority is being given to run the business.
4. It would be relevant to mention here that
though large companies and their auditors with their elaborate ERP systems have
been able to finalize their audited financial statements through Work from Home
infrastructures, the mid-segment and small segment companies due to severe
infrastructural handicaps have been struggling to finalize their financial
statements for the financial year ended 31.03.2020. Needless to mention that
most of these companies are audited by small and medium sized Chartered
Accountant auditors by making physical visits to the company’s offices which is
not possible due to the pandemic. In a nutshell, the difficulties faced by
small and medium sized companies whether for running the business or for making
necessary compliances under various laws cannot be overemphasized.
5. The aforesaid GC 28/2020 dated 17.08.2020
has caused a lot of consternation in the management of such small and medium
sized companies as it would now require them to seek extension of time for
holding AGM by making necessary compliances in these already trying times.
6. In view of genuine hardships arisen
due to Covid-19 pandemic, we request you to kindly consider our request for
blanket extension of due date for holding AGM under section 96 of the Companies
Act, 2013 of those companies whose financial year has ended on 31.03.2020
(other than first financial year) by at least three months from 30th
September, 2020 to 31st December, 2020 instead of requiring the
companies to seek extensions separately.
Respectfully Submitted,
Thanking you
Yours sincerely,
Cc to:
The Secretary, Ministry of Corporate Affairs,
Government of India, Shastri Bhawan, Dr.
Rajendra Prasad Road,
New Delhi – 110001
You will be the same person in five years as you are
today,
except for the people you meet and the books you read.
—
John Wooden
