Adoption of Accounts

Adoption of Accounts
One of the businesses to be transacted at a annual general meeting is adoption of the accounts including the balance sheet, profit and loss account and the Directors’ report thereon.
If the annual general meeting of a company does not adopt the balance sheet or is adjourned without adopting the balance sheet or if the annual general meeting of a
Can Approval of Annual Accounts be delegated? The Department of Company Affairs [vide its letter dt. 27.10.76] has clarified that in the absence of any specific provision in Section 215, the power of the Directors to approve the annual accounts cannot be delegated to a Committee of Directors or some of the Directors. It, inter alia, states that the approval of annual accounts which are to be ultimately placed before the shareholders of the company is not to be treated as a routine or part of day-to-day work. Hence, the Board of Directors must consider the annual accounts and approve them before the accounts are handed over to the Statutory Auditor of the company.
Circulation of Annual Accounts
Section 219 (1) requires that a copy of every balance sheet (including the profit and loss account, Auditors’ report, Directors’ report and every other document required to be annexed or attached thereto) which is to be laid before the annual general meeting of the company shall be sent, not less than 21 days before the meeting, to every member of the company. Besides, a copy each must be sent to every trustee for the debentureholders of the company and to all other persons so entitled.
However, a copy of the annual account, as aforesaid, need not be sent in the
following cases:
(i) To a member, or holder of debentures, of the company, who is not entitled to
have notices of general meetings of the company sent to him.
(ii) To a member or debentureholder whose address the company is not aware
In the case of a company whose shares are listed on a recognised stock exchange, the aforesaid documents need not be sent to members and trustees for debentureholders if the copies of the documents are made available for inspection at its registered office during working hours for 21 days before the date of the meeting and a statement containing salient features of the said documents in the prescribed form, are sent to the members and trustees for debentureholders at least 21 days before the date of the meeting.