Order This order will dispose of the proceedings initiated under Section 246(2) of Flee Companies Ordinance, 1984 ("Ordinance") by the Securities and Exchange Commission of Pakistan ("Commission") through Show Cause Notice No. S.1\4(B.0)C.0, 156(730)93 dated 2 I /1 2/2011 ("Notice") issued to Nadeem Textile Mills Limited ("Respondent").
2 The facts of the matter leading up to aforesaid Notice are that it was observed from the record of this office that the Respondent is a public listed company. Thus, pursuant to this office Notifications Num ber S .R.0 763(1)/85 dated 7/8/1985 & S.R .0 1014(1)/86 dated 12111/1986 issued in exercise of the powers conferred by sub-section (1) of Section 246 of the Ordinance. Circular No. 4 of 1992 and Circular No 6 of 2001, the Respondent was required to file annual return in Form-A of the Third Schedule specified in Section 156 of the Ordinance, 1984 and tile prescribed additional information regarding pattern of shareholding and soft copy of list of members (Annual Return) with Head Office of the Commission within the stipulated time limit. Rut, the Respondent failed to the said Annual Returns for the Annual (knot-al Meeting held in the ycar 2010.
3. The ziforesaid Notification No. S,R.0 763(1)85 stipulates the time period within which the said Annual Return is required to be submitted as under.:- '11.4fhinf6r1Y-five days from the dale of the annlial general meetirfg held in the year or, when no .572,,ch meeting is held or if held is no! Conchrded. .1,0172 flirt last day of the calendar year to 1.1.7ich it relates".
It is worth mentioning that the Commission through Notices dated 07109/2009 and 21/09/2010 provided an opportunity to all listed companies to file their over due Annual Returns with I lead Office of the Commission by 31/10/2009 and 31/10/2010 respectively and to ensure timely compliance in future. The said notices were sent to all listed companies and were also disseminated through Stock Exchanges and print media.
On scrutiny of record it was noticed that the Respondent Ihiled to file the Annual Return, for the Annual General Meeting held in the year 2010, The Company Secretary of the Respondent was thereibre, asked vide letter dated 27/09/2011 to tile the said Annual Return alongwith reasons for icon-filing of the same within the stipulated time limit.
In response to aforementioned letter, the Respondent filed the said Annual Return for the Annual General Meeting held in the year 2010 with this Commission on 20/10/2011 with a delay of 238 days respectively, in contravention of aforementioned Notifications/directive issued by the Commission.
The said defaults attract penal provisions of Section 246(2) of the Ordinance, which provides as under:- "In the event of a default in complying with the order of the Commission issued wider sub-section (1), the company, and every officer of the company who knolvingly and willfully authoriizes or permits the dclaulic shall be liable to a line which may extend to one thousand rupees jOr every day during which the default continues.- The Commission accordingly took cognizance of the aforesaid default and issued Notice, calling upon the Respondent to explain through written reply alongwith documentary evidence, if any as to why action may not be taken against it pursuant to Section 246(2) or the Ordinance, for aforesaid contraventions of the abovementioned Not; lication.
In order to provide an opportunity of being heard in person, hearing in the matter was fixed for 30/12/201 I at the Commission's Regional Office, Karachi_ On the given date Mr, Ahsan Elahi Chartered Accountant and Mr, Muhammad Farooq, Corporate Consultant ("Authorized Representatives") appeared before me and made the followings submissions on behalf of the Respondent:- The Re.Respondent has timely filed the annual return the Annual General Meeting held in 2010 i.With the Company Registration Office, Karachi and a copy of the same alongwith other requisite documents was sent to the ( 'commission A copy of the same documents Wai: also provided to the Commission on receipt of letter dated 27/09/2011.
The Respondent has never defaulted in this regard in the past_ Thus, the good track record of the Respondent may be kept into view while deciding the mailer.
9. l have considered the. Submissions made by the Autheriz,ed R.Epreseniatives on behalf or the Respondent during the course of persona] hearing. The Respondent has admitted the default of late filing of the Annual Returns \via] the contention that said defilult was not committed willfully and knowingly. The Respondent has assured for timely filing of the Annual Returns in fuiure and requested to condone the default w question.
10, In order to arrive at conclusion, I have ads() reviewed the available n-d which reveals that the Respondeni has filed the under reference Annual Returns vviih Company Registration Office, Karachi. Within the period stipulated in Section 156 of the Ordinance. Considering the arguments advanced on behalf of the Respondent. 1 intend to agree with the contention of the Respondent and of the view that the la(e filing of the under reference Annual IZeitirns may not he Therefore, a lenient view of the matter has been taken and the Respondent is hereby strictly warned to ensure timely euxnplianec of aforesaid Notifications/directives issued by (he Commission in ii.Rture.
11. This order is issued without prejudice to any other action that the Commission/Registrar may initiate against the Respondent in accordance with the law on matter subsequently investigated or brought to the Notice of the Commission.