Should Auditors mandatorily attend General Meetings? 

In the recent case of Sen Hon Lee Technologies Private Limited, the Registrar of Companies, Kanpur imposed a penalty of Rs 25,000 on the company and ?5,000 each on its officers for failure to ensure the attendance of the auditor at its Annual General Meetings held on 31 December 2020 and 30 November 2021.

The adjudicating officer held the company in violation of Section 146 and Section 118(10) of the Companies Act, 2013 read with the Secretarial Standard on General Meetings (SS-2). 

This case clearly illustrates that non-attendance of auditors at general meetings attracts regulatory penalties.

Legal Provisions

Section 146 of the Companies Act, 2013:

• All notices and communications of any general meeting must be sent to the auditor.
• The auditor shall, unless exempted by the company, attend the meeting either personally or through an authorised representative.
• The auditor has the right to be heard on any part of the business concerning him as auditor.

Secretarial Standard-2 (SS-2):

• Clause 4.2 – Statutory Auditors must attend general meetings unless exempted by the company.
• They may attend personally or through a qualified authorised representative.
• Clause 4.3 – Secretarial Auditors should attend the Annual General Meeting and may be invited to other general meetings by the Chairman.

The authorised representative must also be qualified to act as an auditor.

Conclusion

Attendance of auditors at general meetings is not just a formality but a statutory duty and governance requirement.
Even if exemption is permitted, companies should ensure their auditors or qualified representatives attend, especially the Annual General Meeting, to uphold transparency and avoid penal consequences.

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From the desk of CS SHARATH