News from the Desk of Ministry of Corporate Affairs (MCA)
Cost Audit Report extension: MCA Circular No. 15/2021 (2021)
- Upon receipt of several references and representations from the stakeholders, the Ministry of Corporate Affairs (“MCA”) had, on the 27th day of September, 2021, issued a General Circular No. 15/2021 (“Circular”) with regard to the extension of the due date of filing of the Cost Audit Report (to the Board of Directors) as mandated under the Companies (Cost Records and Audits) Rules, 2014 (“Rules”) for the above-stated purpose (MCA circular extension 2021 / Cost Audit Report extension 2021).
- The abovesaid Circular provides that if the cost audit report for financial year 2020-21 (by the cost auditor to the Board of Directors of the company) is submitted by 31st October, 2021, then the same would not be viewed as a violation of rule 6(5) of the Rules. It is to be noted that prior to the issuance of this Circular, the said report was required to be issued within a period of 180 (one hundred eighty) days from the close of the financial year.
Filing timelines under the Rules (CRA‑4)
- Consequently, the cost audit report for the financial year ended on 31st March, 2021, shall be filed in e-form CRA-4 within 30 (thirty) days from the date of receipt of the copy of the cost audit report by the company.
- The complete text of the General Circular may be viewed at the below link:
https://www.mca.gov.in/bin/dms/getdocument?mds=UxuGnG2gQZrVxQ%2Fz%2FehiFg%3D%3D&type=open
AGM extension MCA 2021: Office Memorandum and ROC orders
- Upon receipt of several references and representations from the companies, industries and professional institutes, pointing out that several companies are finding it difficult to hold their Annual General Meeting (AGM) for the financial year ended on 31st March, 2021, on account of the ongoing pandemic.
- Section 96(1) provides that every company (other than a one-person company) shall, in each year, hold a general meeting as its AGM, and the third proviso of the same section empowers the registrar to extend the time (for any special reason) to hold the AGM (other than the first AGM).
- Therefore, the Ministry of Corporate Affairs (“MCA”), through the Office Memorandum dated 23rd September, 2021 (“Office Memorandum”), had directed all the respective Registrars of Companies to issue orders granting an extension of time for companies to hold an AGM by a period of 02 (two) months from the date on which the AGM of the Company ought to have been held without the requirement of filing an application for seeing such extension.
- In this regard, pursuant to the abovementioned Office Memorandum, the Registrar of Companies (NC of Delhi & Haryana) had issued an Order no. ROC/Delhi/AGM Ext./2021/5464 (“Order”) directing extension of time by an additional 02 (two) months.
Scope of AGM extension orders
The order also states and clarifies that the extension period granted shall also cover the following:
- Pending applications for extending AGM which are yet to be approved,
- Applications for extending AGM which were rejected,
- Applications for extending AGM where approval was granted for fewer than two months.
However, the order shall not cover the applications for extending the AGM wherein the extension approved was for a period of more than 02 (two) months.
Extension of time to hold Annual General Meeting
Upon receipt of several references and representations from the companies, industries and professional institutes, pointing out that several companies are finding it difficult to hold their Annual General Meeting (AGM) for the financial year ended on 31st March, 2021 on account of the ongoing pandemic.
Section 96(1) provides that every company (other than a one-person company) shall, in each year, hold a general meeting as its AGM, and the third proviso of the same section empowers the registrar to extend the time (for any special reason) to hold the AGM (other than the first AGM).
Therefore, the Ministry of Corporate Affairs (“MCA”), through the Office Memorandum dated 23rd September, 2021 (“Office Memorandum”), had directed all the respective Registrars of Companies to issue orders granting an extension of time for companies to hold an AGM by a period of 02 (two) months from the date on which the AGM of the company ought to have been held without the requirement of filing an application for seeing such an extension.
In this regard, pursuant to the abovementioned Office Memorandum, the Registrar of Companies (NC of Delhi & Haryana) had issued an order no. ROC/Delhi/AGM Ext./2021/5464 (“Order”) directing extension of time by an additional 02 (two) months.
The order also states and clarifies that the extension period granted shall also cover the following: –
- Pending applications for extending AGM which are yet to be approved,
- Applications for extending AGM which were rejected,
- Applications for extending AGM where approval was granted for fewer than two months.
However, the Order shall not cover the applications for extending the AGM wherein the extension approved was for a period of more than 02 (two) months.
Article contributed by: Syed Arsalan Ahmed Associate – Legal Advisory