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CA Nitesh Kumar MoreProcess of approval of Directors report & Financial Statements (FS) : MGT 14 can be filled by 20th Oct, if Board meeting held on 21st September & shorter notice for Annual General Meeting (AGM) is been served on Shareholders

1) Auditor had been appointed in last AGM & audit, say , whole year (generally,in case of Big CO). In any case, he must finish audit before draft financial statement is prepared.

2) Draft financial statement is nothing but unsigned financial statement.

3) Draft financial statement  is approved by board in Board Meeting (BM) for which MGT 14 is required to be filled.

4) After that, it is forwarded to auditor, who is say, sitting outside Board Room, where meeting for approval of FS & directors report is going.

5) After signing by auditor, draft FS becomes Audited FS & sent to board room.

6) Board, then takes record of Audited FS & approve Directors Report as Directors report can be finalized only after Board takes record of Audited FS. Reason is if there is adverse & qualificatory remark  by auditor, Directors report have to include comment on this. For approval of Directors report, MGT 14 is required to be filled.

MGT 14 can be filled by 20th Oct, if Board meeting held on 21st Sep & shorter notice for AGM

STEP 1: BM held: A board meeting for approval of a/c & Directors report etc. & for approval of notice for calling AGM etc is required to be held. As 21 days clear notice is required for calling AGM, we usually hold such BM latest by 7th Sep (if notice for AGM is issued electronically or delivered by company on same date) [Sec 101].

However, in case shorter notice for AGM is accepted by at least 95% shareholders, such Board meeting can also be held on say, 21/25/30th Sep also. & accordingly MGT 14 can be filled. A per sec 179(3), MGT14 is required to be filled for approval of a/c & Directors report etc. within 30 days of Board meeting.

STEP 2: Notice for AGM is issued.

STEP 3: AGM held on 30th September.

Note: For small co, First BM of FY can be held by 30th Sep., in which directors are required to disclose interest (sec 184). However, for other companies, first BM can be held by 30th August only, in which directors are required to disclose interest (sec 184).

Sec 101. (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 maybe prescribed:

Provided that a general meeting may be called after giving a shorter notice if consent is given in writing or by electronic mode by not less than ninety-five per cent. of the members entitled to vote at such meeting.

DUE DATES FOR FILLING GNL2, 23AC, 66, 20B

The due dates for filling are

  1. Form GNL 2 (Appointment of auditor): 15 days from the date of AGM
  2. Form 23AC,23AC: 30 days from the date of AGM

  3. Form 66: 30 days from the date of AGM

  4. Form 20B: 60 days from AGM date

Sec 137(1) of Companies act, 2013:

A copy of the financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such financial statements under this Act, duly adopted at the annual general meeting of the company, shall be filed with the Registrar within 30 days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed within the time specified under section 403.

Sec 92(4) of Companies act, 2013: 

Every company shall file with the Registrar a copy of the annual return, within 60 days from the date on which the annual general meeting is held or where no annual general meeting is held in any year within sixty days from the date on which the annual general meeting should have been held together with the statement specifying the reasons for not holding the annual general meeting, with such fees or additional fees as may be prescribed, call within the time as specified, under section 403.

139(1) of companies act, 2013: 

The company shall inform the auditor concerned of his or its appointment, and also file a notice of such appointment with the Registrar within 15 days of the meeting in which the auditor is appointed.

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0 responses to “Process of approval of Directors report & Financial Statements”

  1. chandan says:

    I think, no need to file mgt-14 ,,,exemption provided..plz correct

  2. CA.Paresh Shah says:

    Can approval of audited financials and directors’ report be done in separate board meeting???

  3. Yashasvi Sharma says:

    Thanks a lot for such a useful information.

  4. B.Chackrapani Warrier says:

    Read. Thanks.

  5. Kush says:

    Dear Sir,

    Very Good Article. However, one query – would the short notice be violating section 136 – rights of member for financial information atleast 21 days before the AGM date ?

  6. RENISH says:

    Dear Sir

    In case of newly incorporate company, the first AGM can be held on or before 31.12.2014. In this case, MGT-14 for approval of Board’s report and financial statement, can be filed before 10th of Dec, 2014.

    Please clarify whether the above interpretation is correct or not.

    Thanking you

  7. amrut says:

    thank you for information…

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