For the first time in the history of the Delhi Gymkhana Club, the Annual General Meeting (AGM) rejected the clubs accounts which were not passed.
In a letter to Om Pathak, Administrator of the Delhi Gymkhana, the members said that the resolution in connection with the adoption and approval of financial statements for FY 2020-21 proposed at the AGM held on December 23 has been rejected with over 97 per cent of the members voting for it.
The letter pointed out that it was difficult to understand why suddenly the Auditor had accepted the changes in accounting principles and policies adopted by the Club since long and which has been duly accepted by other past Auditors for last six years as mentioned above, without assigning any reasons.
“It seems that the Auditor is not acting as a watchdog of the interest of the members of the Club,” the letter said.
“The going concern status of the Club is also stated in page 9 Para 18 of the report. You state that the NCLT is seized of the matter although the matter is sub-judice and no final order has been passed. The fact that Club has huge investments of market value has not been factored in while deciding on going concern status of the Club.”
It went on to say: “Your intentions do not seem to be in the best interest of the Club and its members. This is borne out by your remarks on page 2/32 of your report where you categorically state that from 2009-10 up to 2019-20, the operations of the club showed a net loss of Rs 127.78 crore. Are you aiming to turn the Club into a ripe case for dissolution/take over?
“The Resolution, was in fact rejected as it would have created an illegal and dangerous precedent and would have probably shaken the very foundations of our institution which is now more than 108 years old. The honourable members were left with no other option, but to not approve the Agenda Item dealing with approval of controversial, erroneous and misleading Audited Accounts/ Report of Administrator /Auditors Report.
“This result is a testament of the importance honorable members give to the critical issues raised by members in connection with the policies and practices adopted while preparing the financial statements of the Club for FY 2020-21. This also signifies that the honorable members of the Club are fully committed to uphold the image of the Club and they are also against any false narrative to make it look economically unviable.”
As per provisions of Article 137 of the Company’s Act 2013, in case of rejection of the Financial Statements and Administrator’s Reports, these are to be got passed in the adjourned AGM meeting that needs to be held for that purpose, the letter said.
“We would therefore request you to revise the financial statements by restoring the accounting policies and principles as were being followed in our esteemed institution for last so many years and reconvene the adjourned Annual General Meeting to take fresh approval of the members of the Club at the earliest,” the Delhi Gymkhana members said in the letter.
“Besides revising Accounts, some necessary amendments have to be made in the Administrators Report and Auditors would have to be requested to furnish a fresh Auditor’s Report.”