Representation for extension of timelines for holding Annual General Meeting (AGM) under the Companies Act, 2013 for the Financial Year ended 31.03.2021 due to continued COVID-19 Pandemic
DIRECT TAXES PROFESSIONALS’ ASSOCIATION
Income Tax Building, 3, Govt. Place West, Ground Floor, Kolkata 700001 Ph 033-22420638
Email : [email protected]
Ref. No. – DTPA/Rep/21-22/31
13th September ,2021
Shri Rajesh Verma, IAS
Ministry of Corporate Affairs
Government of India
Dr. Rajendra Prasad Road
New Delhi 110 001
Subject: Representation for extension of timelines for holding Annual General Meeting (AGM) under the Companies Act, 2013 for the Financial Year ended 31.03.2021 due to continued COVID-19 Pandemic.
1. Acknowlwdgement & Gratitude
At the outset, we appreciate and acknowledge the sincere efforts and various initiatives of the Ministry of Corporate Affairs (MCA) and its sensitivity and promptness in providing relief, relaxations and respite to the Corporate Sector, Professionals, and Business Owners/Entrepreneurs and other connected Stakeholders at large in these unprecedented COVID Pandemic times by providing various relaxations and extension of timelines for adherence of several compliance requirements under the provisions of the Companies Act, 2013 (CA, 2013) and the Limited Liability Partnership Act, 2008 (LLP Act, 2008).
We are grateful to the Hon’ble Union Finance Minister for steering our economy so well even amidst and post – Covid 19 difficult financial situation. Finance Ministry has taken various structural reforms to support the economy financially, which includes
various initiatives like: Atmanirbhar Bharat (आत्मनिर्भर र्ारत), MSME Financial Assistance, CFSS Scheme, GST Amnesty Scheme, LLP Settlement Scheme.
2. Ground Realities and difficulties in compliance within time line
We would like to bring it to your kind attention that the operations of Companies have been disrupted and disturbed due to stringent covid restrictions imposed during the second wave of Covid -19 and no State was left untouched. This Covid 19 pandemic has drastically hampered not just financial conditions but restrained activities supporting businesses. Audit firms and the companies both are facing big challenge in conducting remote audits due to lack of infrastructure, technology and other support which entail extra costs. There have been delay and restraints in providing and verification of information, records, data etc. for the Audit purposes, especially where key support staff members of the Company has got changed or shifted to native places or not available in view of COVID 19 Pandemic.
According to the media reports, the third wave of Covid -19 Pandemic is expected to arrive around end of September, 2021 in India. Scientists from Indian Institute of Technology (IIT) Kanpur show simulations for India, several States and districts. The latest projections show rise in cases by more than 1 lakh day in coming months with mutant coronavirus strains showing up.
3. Prayer for Extension of Time Line:
It is requested that, to mitigate the hardships of Corporate and public at large the time period for holding Annual General Meeting for the year ended 31st March, 2021 be extended at least till 31st December 2021. In addition to ground realities and difficulties mentioned above, the following may also be condidered:
a) In the present continuing pandemic situation, the onslaught of 3rd Wave of COVID-19, which has affected a lot in India, the timely holding of Annual general Meeting (AGM) of the Companies as per the provisions mentioned under the Companies Act, 2013, for the year ended 31st March 2021 is very difficult due the reasons mentioned above.
b) Extension granted by SEBI : In order to provide relief from difficulties faced by various stakeholders, the Securities and Exchange Board of India (SEBI) has already introduced Circular No. SEBI/HO/CFD/CMD1/P/CIR/2021/602 dated 23rd day of July, 2021 to extend the timeline for conduct of AGM by top 100 listed entities by market capitalization. A copy of the above mentioned SEBI Circular is enclosed as “Annexure A” for your ready reference.
c) Extension granted by CBDT: Further in order to provide relief to the stakeholders and difficulties reported by the taxpayers and other stakeholders in electronic filing of Income-tax returns and various reports of audit under the provisions of Income-tax Act, 1961, Central Board of Direct Taxes (CBDT) has extended the timelines for filing of Income-tax returns and various reports of audit for the Assessment Year 2021-22 vide Circular No. 17/2021 dated 09.09.2021. A copy of the above mentioned CBDT Circular is also enclosed as “Annexure B” for your ready reference.
d) Financial Statements and Audit Reports are pre-requisite: Financial Statements and Audit Reports are pre-requisite for convening the Annual General Meeting (AGM) for the Company. Due to current scenario, it is very difficult to conduct physical audit and verification of the Company records and also not possible to conduct Audit by remote mode completely. The nonworking of new income tax portal has added more problems for above issue. The non-downloading of data from Income Tax Portal, which is extremely necessary for proper certification of various financial figures, is further adding to the woes of various stakeholders.
e) It is therefore requested that, to mitigate the hardships of Corporate and public at large the time period for holding Annual General Meeting for the year ended 31st March, 2021 be extended at least till 31st December 2021.
4. Extension also needed in case of One Person Companies (OPC):
We also request your good office to provide extension for the One Person Companies (OPC) whose financial statements duly adopted by its member, along with all the documents which are required to be attached to such financial statements, within 180 days from the closure of the financial year as per Section 137 of the Companies Act, 2013. The time line may please be extended for this purpose as well.
5. Conclusion :
We sincerely hope that the Ministry would provide the requisite reliefs being sought by the companies, professionals and other relevant stakeholders. Your favourable consideration would surely promote the cherished vision and initiative of our Hon’ble Prime Minister of “Ease of Doing Business” with Minimum Government, Maximum Governance.
(CA N.K. Goyal, President)
(Narayan Jain, Chairman, Rep Committee)
(Adv. Mamta Binani, Co- Chair, Rep Committee)
Mrs. Nirmala Sitharaman,
Hon’ble Minister for Finance & Corporate Affairs