FILING OF FINANCIAL STATEMENTS

UNADOPTED    

1. As per the proviso to Section 137(1) where the financial statements under sub-section (1) are not adopted at AGM or adjourned AGM such unadopted financial statements along with the required documents under sub-section (1) shall be filed with the Registrar within thirty days of the date of AGM. 

2. The Registrar shall take them in records as provisional till the financial statements are filed with him after their adoption in the adjourned annual general meeting for that purpose.

3. It is further provided that financial statements adopted in the adjourned annual general meeting shall be filed with the Registrar within thirty days of the date of such adjourned annual general meeting with such fees or such additional fees as may be prescribed. 

A pile of wire bound financial statement documents in a pile on a boardroom table surface

UNAUDITED 

1. The word “financial statement” is defined in clause (40) of section 2 of the Act, 2013 does not include Board Report and Auditor Report. But the Auditor’s Report and Board’s report shall be attached to every financial statement and be laid before the company in AGM for their adoption as per section 137(1) of the Act, 2013. Further, a signed copy of every financial statement shall be circulated, issued or published along with all notes or documents, the auditor’s report and Board’s report as provided under sub-section (7) of section 134 of the Act, 2013.

2. If the audit of the financial statement is not done, then the members shall not adopt the financial statement. In this case, the position of the financial statement is unaudited and unadopted and the procedure of unadopted Fin statement to be followed.

NO AGM HELD BUT FIN STAT ADOPTED AND AUDITED.

1. The situation where the annual general meeting is not held is dealt with by subsection (2) of section 137 of the Act, 2013. 

2. It seeks to provide that the financial statements along with the documents required to be attached under sub-section (1), duly signed along with the statement of facts and reasons for not holding the annual general meeting are required be filed with the Registrar within 30 days from the last date before which the Annual General Meeting should have been held. The manner of filing and fees are same as for the adopted financial statements. It should be noted that this provision in applicable where the financial statements, duly signed and audited are available but no meeting is held within the due date.

NO AGM AND ADOPTION OF FIN STATEMENTS (APP FOR EXTENSION OF AGM MADE BEFORE DUE DATE)

Company may file an application for extension of time limit for holding of Annual General Meeting. But it is to be noted that the date of filing of an application must be well in advance.

PROCEDURE TO FILE APPLICATION SEEKING EXTENSION OF TIME FOR HOLDING ANNUAL GENERAL MEETING:

1. Chairman/ Director of the company shall call for a meeting of Board of Director for which a notice must be sent at least 7 days before holding of Meeting of Board.

2. To Convene a Board Meeting on the specified date;

3. To Pass a resolution for extension of time limit for holding annual general meeting specifying the due reason for extension of AGM;

4. The file an application to the Registrar of Companies in Form No – GNL1.

5. In GNL-1, the special reason for not to be holding of AGM along with other necessary information to be provided

6. To attach the Certified true copy of the Board Resolution in E Form GNL-1

7. Follow up with the office of the Registrar of Company

8. The registrar shall examine the application on the specific grounds and may grant an extension, if it thinks it necessary to grant the same.

9. To obtain the certificate of grant of extension in holding of Annual General Meeting of the company

NO AGM AND ADOPTION OF FIN STATEMENTS (APP FOR EXTENSION OF AGM NOT MADE IN ADVANCE)

If the Annual General Meeting is not held within the due date mentioned above or held after the due date but without taking approval of ROC for an extension then the Company will have to go to NCLT/RD, as the case may be, for compounding.

Process of Compounding of Offenc

> Call the Board Meeting to discuss

the nature default and the offence under the Companies Act;

an amount of fine as per the relevant section;

to give authority to director to sign compounding application and other necessary documents;

to authorize professional to file application and appear before the authority for compounding of offence.

> Filling of e-form GNL-1 with the RoC

Application for compounding shall be submitted electronically in e­form GNL­1. This form will be forwarded by ROC either to the NCLT or to the Regional Director depending upon the amount of fine involved.

> Hearing before the authority, if required

There is no specific provision in the Act for personal hearing in cases of compounding matters. If required by authorities, it can be attended by Director or by independent professional on behalf of the company.

> File form INC-28 with the RoC

Where any offence is compounded, intimation thereof shall be given by the company to the Registrar in e-form INC-28 within 7 days from the date on which the order is made available to the company.

Failure of compliance with the order of compounding is an offence punishable with imprisonment of six months or fine not exceeding Rs 100,000/- or with both.

Consequences of not holding an Annual General Meeting

Companies which are not holding their AGM within stipulated time period are contravening the requirements of section 96 of the Act and liable to pay fine under section 99 of the Companies Act, 2013. The offence under this section is a continuing offence till the compliance is made.

According to Section 99, if any default is made in holding an annual general meeting of the company in accordance with section 96 or in complying with any directions of the tribunal, the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs.1,00,000/- and in the case of a continuing default, with a further fine which may extend to Rs.5000/- for every day during which such default continues.

What if Annual Accounts are not ready by the due date of AGM?

Even if Annual Accounts are not ready, it is the duty of the Board to call and convene AGM within the stipulated timeline.

What if AGM is held after due date? Whether it is treated as Void?

No. AGM held after the due date is not to be treated as Void. Company is liable for fine for the default of late holding of an AGM for the number of days of delay

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