ROC: Fines Companies and Directors forDefault in Filling Annual Returns, FinancialStatements

Provisions Involved –

• Section 92(1) of the Companies Act 2013, mandates that every company, irrespective of its size, must
  file an annual return with the ROC within 60 days of holding its Annual General Meeting (AGM) or where no AGM is held in any year within 60 days from the date on which the AGM should have been held together with the statement specifying the reasons for not holding the AGM with such fees, as
  applicable.
• Section 92(5) of the Companies Act, 2013 provides that if any company fails to file its annual return
  before the expiry of the period specified therein, such company and its every officer who is in default
  shall be liable to a penalty of Rs.10,000 and in case of continuing failure, with further penalty of Rs.100 for each day during which such failure continues, subject to a maximum of Rs.2,00,000 in case of a company and Rs.50,000 rupees in case of an officer who is in default.
• Section 137 of the Companies Act 2013, provides that if a company fails to file the copy of the financial statements, as the case may be, before the expiry of the period, the company shall be liable to a penalty of Rs.10,000 and in case of continuing failure, with a further penalty of Rs.100 for each day during which such failure continues, subject to maximum of Rs.2,00,000, and the MD, CFO, if any, and in their absence, any other director who is charged by the Board with the responsibility of complying with the provisions of this section, and, in the absence of any such director, all the Directors of the Company, shall be liable to a penalty of Rs.10,000 and in case of continuing failure, with further penalty of RS.100 for each day subject to maximum of Rs.50,000.

Facts of the Case –

• Registrar of Companies’ offices issue penalty orders against the below-mentioned Companies
  and their Directors (termed as ‘noticees’) for default in filing Annual Returns and Financial Statements of the Companies for the FYs.
• Adjudicating Officer held that the offence committed is of serious nature since non-filing of Annual
  accounts by the Company has placed itself out of reach of stakeholders/regulatory authorities.
• Apprises that appeals against these orders can be filed by the respective noticees within 60 days from the date of receipt of the orders.

Decision on Violation –

• The Noticees are hereby imposed with monetary penalties under Sections 92 and 137 of the Companies Act, 2013 as per the details mentioned in the Table below.

Rishi Singh, Audit Associate, SW India