[Opinion] Delayed submission of financial statements after the AGM held by the company

[2022] 141 taxmann.com 285 (Article) dated 17-08-2022

1. Annual General Meeting – a brief

An annual general meeting (AGM) is a yearly gathering of a company’s shareholders. At an AGM, the directors of the company present an annual report containing information for shareholders about the company’s performance and strategy. According to sub-section (1) of section 96 of the Companies Act 2013, a meeting known as an annual general meeting is required to be held by every company other than one Person Company every year. The company shall have to specify the meeting as such in the notices calling for annual general meeting spelling out the venue, date, time and the agenda of the item of business to be transacted.

2. Provisions under the Companies Act 2013 relating to Annual general meetings

Since the companies are incorporated and registered under the framework of the Companies Act, the companies are mandatorily required to follow the laid down procedure of the provisions of the Companies Act, 2013. Relating to the provisions of conducting the general meeting – especially the annual general meeting which is to be held each year. Following the annual general meeting, the company is required to ensure the filing of its annual financial statements with required / applicable enclosures and as well the annual return.

3. Section 137 of Companies Act, 2013 – Meetings of Annual general meetings

Section 137 of the Companies Act 2013 read with the relevant rules lay conditions which are mandatorily required to be followed and fulfilled by the companies in respect of annual general meetings.

Sub-section (1) of section 137 of the Companies Act, 2013 provides inter-alia that 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 financial statements under this Act, duly adopted at the annual general meeting of the company, shall have to be filed with the Registrar of Companies within thirty days of the date of annual general meeting in such manner, with such fees or additional fees as may be prescribed.

The provision to the section 137(1) further states that where the financial statements under sub-section (1) are not adopted at annual general meeting or adjourned annual general meeting, such unadopted financial statements along with the required documents under sub-section (1) shall have to be filed with the Registrar of Companies within thirty days of the date of annual general meeting and the Registrar shall take in his records as provisional till the financial statements are filed with him after their adoption in the adjourned annual general meeting for that purpose.

Sub-section (2) of section 137 of the Companies Act 2013 stats that where the annual general meeting of a company for any year has not been held, the financial statements along with the documents required to be attached under sub-section (1), duly signed along with the statements of facts and reasons for not holding the annual general meeting shall have to be filed with the Registrar of Companies within thirty days of the last date before which the annual general meeting should have been held and in such manner with such fees or additional fees as may be prescribed.

Sub-section (3) of section 137 of the Companies Act 2013 provides that if a company fails to file the copy of the financial statements under sub-section (1) or sub-section (2), as the case may be, before the expiry of the period specified therein, the company shall be liable to a penalty of one thousand rupees for every day during which the failure continues but which shall not be more than ten lakh rupees, and the Managing Director and the Chief Financial Officer of the company, if any, and, in the absence of the Managing Director and the Chief Financial Officer, 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 one lakh rupees and in case of continuing failure with further penalty of one thousand rupees for each day after the first during which such failure continues, subject to a maximum of five lakh rupees.

4. Details of the company

AdGlobal 360 India Private Limitedis a company incorporated on 19th June 2010 having its registered office at Unit No.14, First Floor, Vasanth Square, Mall Sector – B, Vasant Kunj, and New Delhi. The company falls under the jurisdiction of Registrar of Companies, Delhi & Haryana and the Registrar of Company is situated at Delhi. The company operates in digital transformation involving with big data analytics, providing analytics function, measuring and making sense of metrics and also undertaking psychographic segmentation and chart sound strategies that undergird gripping narratives.

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