CA Pratik Anand
Approval of Financial statements of a Company for FY 2013-14 – Have You filed form MGT-14?
We are all in the process of finalising the accounts of Companies for the Financial Year 2013-14 or have already finalised such financial statements. But, do we know that the resolution with respect to approval of financial statements by the Board for the FY 2013-14 is to be filed with the Registrar of Companies.
As per the provisions of Companies Act’2013, the financial statements of a company alongwith the Directors’ report are to be approved by the Board of Directors of the company at a meeting of the Board of Directors.
Let us take a look at the resolutions to be filed with the Registrar:
As per clause (g) of Section 117 (3) of the Companies Act’2013 the following resolutions are to be filed with the Registrar:
♠ resolutions passed in pursuance of sub-section (3) of section 179
Now let us look at the provisions of sub-section (3) of section 179:
The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:—
(a) to make calls on shareholders in respect of money unpaid on their shares;
(b) to authorise buy-back of securities under section 68;
(c) to issue securities, including debentures, whether in or outside India;
(d) to borrow monies;
(e) to invest the funds of the company;
(f) to grant loans or give guarantee or provide security in respect of loans;
(g) to approve financial statement and the Board’s report;
(h) to diversify the business of the company;
(i) to approve amalgamation, merger or reconstruction;
(j) to take over a company or acquire a controlling or substantial stake in another company;
(k) any other matter which may be prescribed:
From the simultaneous reading of the above Sections 117 and Section 179 (3) of the Companies Act’2013, it is clear that unlike the previous years, the resolution with respect to approval of financial statements and the Board’s report for the FY 2013-14 onwards has to be separately filed with the Registrar of Companies.
Form MGT-14 has been prescribed for filing resolutions listed under section 117 of the Companies Act’2013.
Q. What is the last date for filing the form MGT-14?
Ans: As per the provisions of Section 117 of the Companies Act’2013, every resolution listed under sub-section (3), has to be filed with the Registrar within thirty days of passing of such resolution.
Therefore, in order to avoid late fee under the provisions of the Companies Act’2013, the resolution approving the financial statements and the Board’s Report has to be filed within 30 days of such approval.
Now let us examine the latest date upto which the financial statements can be approved and Form MGT-14 could be filed.
As per the provisions of Section 96 of the Companies Act’2013, every company other than a one-person company shall hold in each year a general meeting as its Annual General Meeting within a period of six months, from the closing of the financial year.
Since, the accounting year of most of the companies is the financial year i.e period beginning from 1st day of April of the preceding year and ending with the 31st day of March of the subsequent year. 1stApril’2013 to 31st March’2014 in our case, therefore
The Annual General Meeting can be held latest by 30th September’2014.
As per the provisions of Section 101 of the Companies Act’2013,
(1) A general meeting of a company may be called by giving not less than clear
Twenty one days’ notice either in writing or through electronic mode in such manner as may be prescribed:
Therefore, the notice of the meeting should reach the members latest by the 8th of September’2014.
Since, the facility of internet is not available in everywhere in India, therefore we consider notice in writing to be sent by registered post. In that case we consider three clear days as the time lag between the posting of notices and the receipt of the notices by the members. Therefore the notices need to be posted by the 4th of September’2014 for the AGM of FY 2013-14.
Since the notices are to be posted by the 4th of September’2014, therefore the Board meeting approving the financial statements alongwith the Board’s Report and setting the Agenda for the AGM for FY 2013-14 should have taken place latest by the 3rd of September’2014.
So, If 3rd of September’2014 is taken as the date of Board meeting for approval of the financial statements then MGT-14 has to be filed latest by 2nd of October’2014 in order to avoid late fee under section 403 of the Companies Act’2013.
The views expressed in this article are personal. Hope you find the above information relevant and useful in your daily practice
(The author is a CA in practice at Delhi and can be contacted at: E-mail: firstname.lastname@example.org, Mobile: +91-9953199493)