UNDER SUB-SECTION (3) OF SECTION 245 READ WITH SECTION 476 OF THE COMPANIES ORDINANCE.
1984 Phis order shall dispose of the proceedings initiated against directors including chief executive (together referred to as "respondents") of Redco Textiles Limited (the "Company"). These proceedings were initiated through show cause notice (the "SCN") dated January 26, 2015, issued under the provisions of sub-section (3) of section 245 read with section 476 of the Companies Ordinance, 1984 (the "Ordinance").
2. The brief facts of the case are that as per record, the Company did not file the interim financial statements ("Quarterly Accounts") for the following periods with the Commission, as per requirements of section 245 of the Ordinance: {{TABLE}} Sr. No. Quarter Ended Due Date 1 31-Dec-13 28-Feb-14 2 31-Mar-14 30-Apr-14 I Consequently, the SCN was issued to the respondents whereof they were called upon to show cause in writing as to why penal action may not be taken against them under sub-section (3) of section 245 of the Ordinance for not filing the aforesaid Quarterly Accounts in terms of the law.
3. In response to the SCN the respondents vide letter dated February 4, 2015 submitted that the aforesaid Quarterly Accounts were duly prepared and e-filed with the Registrar of Companies within stipulated time along with e--filing fee. The Quarterly Accounts were also circulated and uploaded on the Company's website and were submitted to Lahore and Karachi Stock Exchanges in a timely manner. However, the dispatch person inadvertently missed to submit the aforesaid Quarterly Accounts to the Commission. The respondents gave assurance for future compliance and requested to withdraw the proceedings in view of their submissions. Subsequently, upon confirmation form the Companies Registration Office, Karachi, it transpired that the Company e- filed the aforesaid Quarterly Accounts with the Registrar in a timely manner.
3. In connection with this it is important to note that the applicable legal framework, i.e. section 24i of the Ordinance requires separate filing of Quarterly Accounts with the Commission and the Registrar of Companies. In respect of filing of Quarterly Accounts with the Registrar, e-filing mode has been adopted; however, it does not currently eater for filing of accounts with the Commission.
As such, companies are still required to file their quarterly and annual accounts in physical form at the Commission's head office. This fact has been amply clarified by the Commission through a press release dated January 2, 2014.
4. It is clear from the record that the Company did not file the aforesaid Quarterly Accounts in physical form with the Commission, however, those were e-filed with the Registrar within the prescribed time. Therefore, considering the otherwise satisfactory compliance history of filing of accounts with the Commission, instead of imposing fine, I hereby conclude the proceedings with a warning to the respondents to be careful in future and ensure meticulous compliance with provisions of section 245 of the Ordinance. The respondents are further directed to file three physical copies of the aforesaid Quarterly Accounts with the Comm ission along with requisite filing fee.