The Registrar of Companies (ROC), Telangana, issued an adjudication order against M/s. Spacenet Enterprises India Limited for violating Section 134(3)(f) of the Companies Act, 2013. The inquiry revealed that the company’s Board of Directors failed to address an audit objection regarding internal financial controls in their Board’s Report for the financial year 2020-2021. The company attributed this omission to oversight, which led to the issuance of an adjudication notice and subsequent hearing. After evaluating the case, the Adjudicating Officer imposed penalties: ₹3,00,000 on the company, and ₹50,000 each on the officers in default—Mr. Krishna Kakkera (WTD), Mr. Dasigi Venkata Surya Prakash Rao (CFO), and Mr. Chowda Medam Reddy (CS). The penalty must be paid within 90 days, and the company has the right to appeal within 60 days to the Regional Director. Failure to comply with the order may result in further fines or imprisonment as per Section 454(8) of the Companies Act, 2013.
OFFICE OF THE REGISTRAR OF COMPANIES, TELANGANA, HYDERABAD
2ND FLOOR, CORPORATE BHAWAN, BANDLAGUDA, NAGOLE, HYDERABAD – 500 068
Order F.NO.ROC/HYD/SPACENET/ADJ/S.134/2024-25/901 DATE: 16.07.2024
ADJUDICATION ORDER UNDER SECTION 134(3)(f) OF THE COMPANIES ACT, 2013 IN THE MATTER OF M/S. SPACENET ENTERPRISES INDIA LIMITED
1. Appointment of Adjudicating Officer:-
The Ministry of Corporate Affairs vide its Gazette Notification No. A-42011/112/2014-Ad. II, dated 24.03.2015 has appointed Registrar of Companies, Chennai as Adjudicating Officer in exercise of the powers conferred by section 454(1) of the Companies Act, 2013 (hereinafter referred as Act or Companies Act, 2013) r/w Companies (Adjudication of Penalties) Rules, 2014 for adjudging penalties under the provisions of this Act.
2. Company: –
Whereas the company viz M/s. SPACENET ENTERPRISES INDIA LIMITED with CIN L72200TG2010PLC068624 (herein after referred as ‘company’ or ‘subject company’) is a registered company with this office under the Companies Act, 2013 having its registered office as per MCA21 Registry at Plot No.114, Survey No.66/2, Raidurgam Gachibowli, Prasanthhills, Navkhalsa, Serilingampally, Rangareddi, Hyderabad, Telangana, India, 500008. The financial & other details of the subject company as available on MCA-21 portal is stated as under:
| S.No. | Particulars | Details as on F.Y. 2022-23 |
| 1. | Paid up Capital | Rs. 55,51,28,306/- |
| 2. | a. Revenue from Operation | 142,11,07,000 |
| b. Other Income | 41,72,000 | |
| c. Profit for the Period | 2,70,40,000 | |
| 3. | Whether it is a Holding Company | Yes |
| 4. | Whether it is a Subsidiary Company | NO |
| 5. | Whether company registered under Section 8 of the Act? | NO |
| 6. | Whether company is a small company? | NO |
| 7. | Whether company registered under any other special Act? | NO |
3. Section and Penal Provision as per Companies Act, 2013
Section 134. Financial Statement, Board’s Report, etc.:
(3) There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include:
(f) explanations or comments by the Board on every qualifications, reservation or adverse remark or disclaimer made-
i) by the auditor in his report; and
ii) by the company secretary in practice in his secretarial audit report
Section 134. Financial Statement, Board’s Report, etc.:
(8) If a company is in default in complying with the provisions of this section, the company shall be liable to a penalty of three lakh rupees and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees.
4. Issue of Adjudication Notice:
An Inquiry of Books and Accounts of the company M/s. Spacenet Enterprises India Limited was carried out U/s 206(4) of the Companies Act, 2013 by the Office of Registrar of Companies authorized by the Central Government wherein the observations of the Inquiry Officer are as follows:
During the course of Inquiry, it was observed by the Inquiry Officer that from the Audit report attached to the Balance Sheet as at 31.03.2021 has an audit objection on internal financial controls which has not been explained in the Board’s Report. The Company has replied that it was due to oversight and therefore, the company has violated Section 134(8) of the Companies Act, 2013.”
Therefore, the Company and its officers have violated the provisions of Sec 134(3)(f) of the Companies Act 2013 and liable for penal action u/s 134(8) of the Companies Act 2013.After that the Adjudicating Authority has issued Adjudication Notice to the company and its directors vide Notice No. ROCH/068624(SEIL- 134(3)(f)/2023/SCN/ 1510 to 1514 dated 20.10.2023:
5. Reply of the Company and its Officers in default for Adjudication Notice issued: The company and its officers in default has filed an Adjudication Application dated 21.05.2024 received in this office on 24.05.2024.
6. Adjudication Hearing:
The Adjudicating officer has issued hearing notice vide letter no. ROCH/HEARING NOTICE/SEIL/2024/ 606 TO 610 dated 12.06.2024 to the Authorized professional, Company and its Officers in default to appear before the Adjudicating officer on 26.06.2024. The Authorized representative Shri. Ankit Sharma, PCS (M No. A65214 and COP 24432) appeared before the Adjudicating Officer and has explained that that one of the officers in default, Mr. Srinivasa Rao Tatipaka has expired. The Authorized Representative has been asked to submit the death certificate and the same was submitted.
7. Decision
Having considered the facts and circumstances of the case and after taking into account the factors above, it is concluded that Company and its officers in default is liable for penalty as prescribed under Section 134(8) of the Act for violation of Section 134(3)(f) of the Companies Act, 2013.
(i) Accordingly, I am inclined to impose a penalty as prescribed under Section 134(8) of the Companies Act, 2013. The details of the penalty imposed on the company and officers in default are shown in the table below:
| S.No | Particulars | Penalty for default (Rs.) | Maximum Penalty (Rs.) | Period of Default | Final Penalty Imposed (Rs.) |
| 1. | Company | Rs. 3,00,000/- | Rs. 3,00,000/- | 2020-2021 | Rs. 3,00,000/- |
| 2. | Mr. Krishna Kakkera (WTD) | Rs. 50,000/- | Rs. 50,000 | 2020-2021 | Rs. 50,000 |
| 3. | Mr. Dasigi Venkata Surya Prakash Rao (CFO) | Rs. 50,000/- | Rs. 50,000 | 2020-2021 | Rs. 50,000 |
| 4. | Mr. Chowda Medam Reddy (CS) | Rs. 50,000/- | Rs. 50,000 | 2020-2021 | Rs. 50,000 |
Therefore, in view of the above said violation, in exercise of the powers vested to the undersigned under Section 454(1) & (3) of the Companies Act, 2013 the penalty imposed above on Company and its Officers in default as penalty amount for violation of Section 134(3)(f) of the Companies Act, 2013.
8. The said amount of penalty shall be paid online by using the website mca.gov.in (Misc. head) within 90 days of receipt of this order and intimate this office with proof of penalty paid.
9. Whereas Appeal against this order may be filed with the Regional Director (SER), Ministry of Corporate Affairs, 3rd Floor, Corporate Bhavan, Bandlaguda, Nagole, Hyderabad, Telangana, within a period of sixty days from the date of receipt of this order, in Form ADJ [available on Ministry website mca.gov.in) setting forth the grounds of appeal and shall be accompanied by a certified copy of this order. [Section 454(5) & 454(6) of the Act read with Companies (Adjudicating of Penalties) Rules, 2014].
10. Your attention is also invited to section 454(8) of the Act in the event of non-compliance of this order, “(8) (i) Where company fails to comply with the order made under sub- section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine, which shall not be less than twenty five thousand rupees but which may extend to five lakh rupees.
(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”
(PARVINDER SINGH, I.C.L.S)
REGISTRAR OF COMPANIES
TELANGANA, HYDERABAD
