Approval of Financial statements of
a Company for FY 2013-14 – Have You filed form MGT-14?
We are all in the process of finalising the accounts of Companies for the Financial Year 2013-14 or have already finalised such financial statements. But, do we know that the resolution with respect to approval of financial statements by the Board for the FY 2013-14 is to be filed with the Registrar of Companies.
As per the provisions of Companies Act’2013, the financial statements of a company along with the Directors’ report are to be approved by the Board of Directors of the company at a meeting of the Board of Directors.
Let us take a look at the resolutions to be filed with the Registrar:
As per clause (g) of Section 117 (3)
of the Companies Act’2013 the following resolutions are to be filed with the
Registrar:
Resolutions passed in pursuance of sub-section (3) of section 179
Now let us look at the provisions of
sub-section (3) of section 179:
Section 179(3):
The Board of Directors of a company
shall exercise the following powers on behalf of the company by means of
resolutions passed at meetings of the Board, namely:—
(a) to make calls on
shareholders in respect of money unpaid on their shares;
(b) to authorise buy-back of
securities under section 68;
(c) to issue securities,
including debentures, whether in or outside India;
(d) to borrow monies;
(e) to invest the funds of
the company;
(f) to grant loans or give guarantee
or provide security in respect of loans;
(g) to approve financial
statement and the Board’s report;
(h) to diversify the business
of the company;
(i) to approve amalgamation,
merger or reconstruction;
(j) to take over a company or
acquire a controlling or substantial stake in another company;
(k) any other matter which
may be prescribed:
From the simultaneous reading of the
above Sections 117 and Section 179 (3) of the Companies Act’2013, it is clear
that unlike the previous years, the resolution with respect to approval of
financial statements and the Board’s report for the FY 2013-14 onwards has to
be separately filed with the Registrar of Companies.
Form MGT-14 has been prescribed for filing
resolutions listed under section 117 of the Companies Act’2013.
What is the last date for filing the form MGT-14?
As per the provisions of
Section 117 of the Companies Act’2013, every resolution listed under
sub-section (3), has to be filed with the Registrar within thirty days of
passing of such resolution.
Therefore, in order to avoid late
fee under the provisions of the Companies Act’2013, the resolution approving
the financial statements and the Board’s Report has to be filed within 30 days
of such approval.
Now let us examine the latest date
upto which the financial statements can be approved and Form MGT-14 could be
filed.
As per the provisions of Section 96
of the Companies Act’2013, every company other than a one-person company shall
hold in each year a general meeting as its Annual General Meeting within a
period of six months, from the closing of the financial year.
Since, the accounting year of most
of the companies is the financial year i.e period beginning from 1st
day of April of the preceding year and ending with the 31st day of
March of the subsequent year. 1stApril’2013 to 31st
March’2014 in our case, therefore
The Annual General Meeting can be
held latest by 30th September’2014.
Section 101:
As per the provisions of Section 101
of the Companies Act’2013,
(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 may be prescribed:
Therefore, the notice of the
meeting should reach the members latest by the 8th of
September’2014.
Since, the facility of internet is
not available in everywhere in India, therefore we consider notice in writing
to be sent by registered post. In that case we consider three clear days as the
time lag between the posting of notices and the receipt of the notices by the
members. Therefore the notices need to be posted by the 4th of
September’2014 for the AGM of FY 2013-14.
Since the notices are to be posted
by the 4th of September’2014, therefore the Board meeting approving
the financial statements alongwith the Board’s Report and setting the Agenda
for the AGM for FY 2013-14 should have taken place latest by the 3rd
of September’2014.
So, If 3rd of
September’2014 is taken as the date of Board meeting for approval of the
financial statements then MGT-14 has to be filed latest by 2nd of
October’2014 in order to avoid late fee under section 403 of the Companies
Act’2013.
Notes:
- In this situation, we have considered clear twenty days notice for the AGM. The AGM can be called at 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. The situation may alter in that case.
- The notice of the meeting can also be called by electronic mode i.e E-mail, the notice in that case will be received on the day of mailing itself and the same can be done by the 7th or 8th of September’2014 and the meeting could be held on the seventh of September’2014 and MGT-14 can be filed latest by 6th October’2014.
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