Section 102 of CA 2013 : Section 102: Statement To Be Annexed To Notice

Explanation using Example

Imagine a company, XYZ Private Limited, is holding its Annual General Meeting (AGM). The agenda includes a special resolution to sell one of the company's manufacturing units. According to Section 102 of the Companies Act, 2013, the notice of the AGM sent to all shareholders must include a statement with material facts about this special business item.

In this case, the statement must disclose if any director, manager, or key managerial personnel has any financial interest in the transaction. For example, if Director Mr. A holds a 30% stake in the purchasing company, this must be clearly stated. Furthermore, if Mr. A's relative, Mrs. B, also has a significant stake in the purchasing company, this too needs to be disclosed.

The notice should also provide other relevant information, such as the reason for the sale, the impact on the company's finances, and how it will affect shareholders. Additionally, if there is a document detailing the terms of the sale, the notice must specify where and when shareholders can inspect this document.

If it later emerges that Mr. A failed to disclose his interest and as a result, he gained a financial advantage, he would have to hold that benefit in trust for XYZ Private Limited. He could also face a penalty as per the Act.