Indian companies to get 3-month relief as deadline for holding extended AGM due to COVID-19

Source: Xinhua| 2020-08-19 20:44:34|Editor: huaxia

MUMBAI, Aug. 19 (Xinhua) -- Indian companies have been asked to seek exemption before Sept. 29 if they are unable to hold their statutory annual general meeting (AGM) of shareholders due to the prevailing COVID-19 pandemic, the Ministry of Corporate Affairs (MCA) said.

A circular issued by the MCA said, "It is once again reiterated that companies unable to hold their AGMs for the year ended March 31, 2020 despite availing the relaxations ought to file their applications for seeking extension of time in holding of AGMs for the financial year 2020 with the concerned registrar of companies (RoC) on or before Sept. 29, 2020."

These applications will be viewed liberally and extensions will be granted for a maximum of three months, the circular said.

Indian companies are required to hold AGMs with six months of closure of the financial year, which means before Sept. 30 for those who having March 31 as year-end. Though the MCA had allowed companies to hold virtual AGMs using audio-video applications, the prevailing pandemic crisis had made it a logistical nightmare for companies to complete the audit functions and finalise the annual reports.

"The MCA has clarified that blanket extension will not be granted, but each company will have to submit a request in Form GNL-1 and get their individual approval. Companies need not wait for the last date of Sept. 29 stipulated by MCA to file the request as the approval if denied would culminate into a long-drawn process of compounding penalty for the companies," said Mohnish Wadhwa, founder of Wadhwa & Shah, Chartered Accountants.

Earlier, MCA had extended various due-date pertaining to different compliance of taxation payments and returns, yearly and quarterly results and the extension of timeline to hold AGM by three months is a relief to small and mid-size corporates, said Dhiraj Lalpuria, partner of audit firm M/s SK Patodia & Associates.

India, ranked third after United States and Brazil for the total number of COVID-19 cases with partial lockdowns in its fifth month, has over 1 million companies including public and private on the rolls of the RoC. Enditem