Non-Disclosure of Nomination & Remuneration Committee: MCA Imposes ₹18 Lakh Penalty

Ministry of Corporate Affairs, through the Registrar of Companies in Hyderabad, issued an adjudication order against BGR Mining & Infra Ltd. for violating Sections 134(3)(e) and 178(1) of the Companies Act, 2013. The violations were identified during an inquiry into the company’s non-disclosure of the Nomination and Remuneration Committee’s constitution in its Board’s report for the financial years 2016-17, 2017-18, and 2018-19. The company, headquartered in Hyderabad, was found to have failed in fulfilling mandatory compliance related to director appointment and remuneration policies, as required by law. In response, the company acknowledged the oversight, stating it was not intentional. Penalties were imposed, amounting to Rs. 18 lakh in total for the three fiscal years, with the company and its officers, including the Managing Director, Company Secretary, and other directors, individually penalized. The company has 90 days to pay the penalty, failing which further penalties may be applied. Additionally, appeals against the order can be filed with the Ministry’s Regional Director within 60 days.

MINISTRY OF CORPORATE AFFAIRS
GOVERNMENT OF INDIA
OFFICE OF THE REGISTRAR OF COMPANIES, TELANGANA, HYDERABAD
2ND FLOOR, CORPORATE BHAWAN, BANDLAGUDA, NAGOLE, HYDERABAD — 500 068

F.NO.ROC/HYD/BGR MINING/ADJ/S.134(3)(e)/2024-25/240 To 251, DATE: 06.05.2025

ADJUDICATION ORDER FOR VIOLATION UNDER SECTION 134(3)(e) r/w  SECTION 178(1) OF THE COMPANIES ACT, 2013 IN THE MATTER OF M/S. BGR MINING & INFRA 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 Hyderabad 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. BGR MINING & INFRA LIMITED with CIN U45400TG2011PLC115896 (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. 8-2-596/R, Road No. 10 Banjara Hills, Hyderabad, Telangana, India, 500034. The financial & other details of the subject company as available on MCA-21 portal is stated as under:

3. Section and Penal Provision as per Companies Act, 2013

Section 178 Audit Committee

(1) The Board of Directors of every listed public company and such other class or classes of companies, as may be prescribed shall constitute the Nomination and Remuneration Committee consisting of three or more non-executive Directors out of which not less than one-half shall be independent directors:

Provided that the chairperson of the company (whether executive or non-executive) may be appointed as a member of the Nomination and Remuneration Committee but shall not chair such Committee.

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 —

(e) in case of a company covered under sub-section (1) of section 178, company’s policy on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178

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. Facts of the case:

An Inquiry of Books and Accounts of the company M/s. BGR MINING & INFRA 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 “all the public limited company having paid up capital of Rs. 10 Crores or more or Turnover Rs.100 Crores or more or all public companies having in aggregate, outstanding loans, debentures and deposits exceeding Rs.50 Crores or more shall constitute the Nomination and Remuneration committee. As per the board report, the company has not disclosed the constitution of Nomination and Remuneration Committee.” The company stated that the disclosure as to the constitution of the Committee was mentioned in the cover page of the Annual report, but it should disclose the same in the board’s report. Hence, the company has violated section 134(3)(e) r/w 178(1) of the Companies Act, 2013 in respect of financial year 2016­17, 2017-18 and 2018-19.

From the inquiry report it is found that there is reasonable cause to believe that the company and its officers have violated the provisions of section 134(3)(e) r/w Section 178(1) of the Companies Act, 2013 and liable for penal action u/s 134(8) of the Companies Act 2013. Accordingly, this office has issued Show cause Notice to the company and its directors vide Notice No. ROCH/115896(BGRMIL-134(3)(e)/2023/SCN/ 1239 to 1246 dated 11.09.2023. The company vide letter dated 22.05.2024 has filed an adjudication application. However, upon examination of the said application it was found to be defective and incomplete. This office vide letter no. F.NO.ROC/HYD/BGRMINING/ADJ/ S.134/2024-25/1465 dated 11-09­2024 directed the company to file the fresh adjudication application with corrected details.

5. Reply of the Company and its Officers in default for Adjudication Notice issued:

The company has submitted that information has been missed out inadvertently and that the company had no malafide or fraudulent intention in not disclosing the financial statements, Board Reports and related party Transactions etc. As per the directions of the office dated 11.09.2024 for the separate applications for the violation of Sections 134(3) and 134(3)(h), Shri. K CH. Venkat Reddy, PCS the Authorised Representative (AR) has submitted undertaking dated 16.10.2024 that the Company will comply with all necessary provisions of the adjudication and will pay all penalties as per the orders and will ensure compliance with all applicable laws and regulations. Accordingly, the adjudication application submitted on 22.05.2024 has been considered upon necessary corrections carried out by the AR.

6. Adjudication Hearing and Submission by Authorized Representative:

This office has issued a hearing notice vide letter no. ROCH/HEARING NOTICE/BM1L/2024/ 966 to 974 dated 31.07.2024 to the Authorized Representative (AR) of Company, the Company and its Officers in default to appear before the Adjudicating Officer on 05/08/2024. The Authorized Representative Shri. K CH Venkat Reddy, PCS (M No. F7976 and COP 8998) appeared before the Adjudicating Officer and pleaded the case on behalf of Company and Directors and made submission for imposing lesser penalty.

7. Order

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 are liable for penalty as prescribed under Section 134(8) of the Act for violation of Section 134(3)(e) r/w 178(1) 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:

I. For the FY 2016-17:

II. For the FY 2017-18:

III. For the FY 2018-19:

Therefore, in view of the above said violation, in exercise of the powers vested with 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)(e) r/w 178(1) of the Companies Act, 2013.

8. The said amount of penalty shall be paid online from own sources by using the website mca.gov.in(Misc. head) within 90 days of receipt of this order and file form INC-28 attaching copy of order and payment challan. The penalty amount so imposed on officer in default shall be paid from their personal sources / Income.

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 non­compliance of this order,

“(8)(i) Where company fails to comply with the order made under sub- section (3) or sub­section (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.”

Issued under my hand and seal on this the_______ 6th of May 2025.

(PARVINDER SINGH, I.C.L.S)
REGISTRAR OF COMPANIES
TELANGANA, HYDERABAD