FILING OF ANNUAL ACCOUNTS
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1. Companies required to file Annual Audited Financial Statements:
Following companies are required to file annual audited financial statements with Registrar:
• Listed companies
• Other Companies excluding private companies and single member companies having paid up capital not exceeding Rs. 10 million
• Foreign companies
2. Companies required to file Annual Unaudited Financial Statements:
• Private company and single member company (SMC) having paid up capital of
upto Rs.1 million (not being a subsidiary of a public company)
3. When to file Annual Audited Financial Statements
(A). By Listed Companies:
In terms of Section-223(7) of the Act, every listed company shall at least 21 days before the Annual General Meeting send:
• Three (3) copies by post to the Registrar and the Commission;
• One (1) copy electronically to the Commission via email address statements@secp.gov.pk as notified vide SECP’s Circular No. 24 of 2017 dated October 19, 2017;
• One copy to the registrar through SECP’s e-service.
Moreover, in terms of Section-233 of the Act, every listed company is required to file through e-service with the registrar a copy of annual audited financial statements along with the reports and documents required to be annexed, within 30 days of holding of AGM.
(B). By Other than Listed Companies excluding private companies having paid up capital not exceeding Rs. 10 million:
Annual audited financial statements are required to be filed with the registrar within 15 days of holding of AGM.
(C). Foreign Companies are required to file with the registrar, annual audited financial statements within 45 days from date of submission to the public authority of the country of incorporation or within 180 days of the date accounts are made upto, whichever is earlier.
4. When to file Annual Unaudited Financial Statements:
In terms of Section- 234 of the Act, companies (as mentioned in Sr. # 2 above) which are required to file unaudited financial statements shall file such statements within 30 days of holding of AGM or otherwise in case of SMC.
5. Approval and authentication/signing of the annual financial statements :
In terms of Section- 232 of the Act, the annual financial statements are required to be approved by the board of the company and signed on behalf of the board by the chief executive and at least one director and in case of listed company also by the chief financial officer.
Where the chief executive is for the time being not available in Pakistan, then the financial statements of the company should be signed by at least two directors.
Financial statements of a single member company shall be signed by one director.
In case of private company having paid up capital not exceeding 01 million rupees, financial statements shall be accompanied with an affidavit executed by chief executive if the financial statements are signed by him and by any of the directors if the financial statements are signed by two directors, affirming that the financial statements have been approved by the board.
6. Reports and documents attached to annual audited financial statements:
A listed company is required to file annual audited financial statements alongwith auditor’s report, director’s report, chairman review report and statement of compliance.
Public Sector Companies i.e., companies majority owned or controlled by the Government are required to file statement of compliance and auditors’ review report thereon along with annual audited financial statements, setting out compliance status with the Public Sector Companies (Corporate Governance) Rules, 2013.
7. Board’s duty to lay Financial Statements:
Annual audited financial statements must be approved from the board (required under Section 183 of the Act) and then laid before the Annual General Meeting (AGM) within a period of 120 days of close of financial year (Section 223)
8. Time for laying the Financial Statements
First Annual Financial Statements:
First annual financial statements are to be laid in first Annual General Meeting required to be held in first sixteen months after the incorporation of the company but within a period of 120 days of closing of financial statements.
Subsequent Annual Financial Statements:
Subsequent annual financial statements are laid once in AGM, required to be held once in each calendar year
Extension in period of laying the Financial Statements:
The Commission, in the case of a listed company, and the registrar in any other case can extend the period for a term not exceeding 30 days on application of the Company giving special reason.
9. Period of Annual Financial Statements:
The period of financial statements should not exceed one year.
10. Permission to prepare Annual Financial Statements for period exceeding one year:
The registrar can permit preparation of the annual financial statements for period exceeding one year under special circumstances and on application filed by the Company.
11. Audit of Annual Financial Statements:
The financial statements are audited by the statutory auditor of the company except for private company and single member company (SMC) having paid up capital of upto Rs.1 million (not being a subsidiary of a public company). Auditor’s report is to be attached with the annual financial statements (Section 223)
12. Annual financial statement be kept at registered office :
A copy of the annual financial statements is also kept at the registered office of the company for the inspection of the members of the company during the period of at least 21 days before AGM (Section 223).
13. Penalty for non-filing of financial statements (Section 233):
If a company fails to deliver financial statements on time then the company in default shall be liable. In case of default relates to a listed company, to a penalty of level 2 on standard scale and (b) if the default relates to any other company to a penalty of level 1 on standard scale.
Quarterly Financial Statements
Section 237 of the Act sets out the provisions relating to transmission of quarterly financial statements by listed companies.
1. Filing of Quarterly Financial Statements:
In term of Section 237 of the Act, every listed company is required to electronically transmit its quarterly financial statements within 30 days of close of 1st and3rd quarter of its year of accounts and within sixty (60) days of the close of 2nd quarter of its year of accounts to the Commission and also post the quarterly financial statements on company’s website for information of members. The email address financial.statements@secp.gov.pk is to be used for electronic transmission of quarterly financial statements as notified vide SECP’s Circular No. 24 of 2017 dated October 19, 2017. In addition to electronic transmission, such quarterly financial statements are also to be filed with the Registrar through SECP’s e-service.
2. Authentication/signing of the quarterly financial statements:
The quarterly financial statements are required to be approved by the board of the company and signed on behalf of the board by the chief executive, at least one director and also by the chief financial officer. Where the chief executive is for the time being not available in Pakistan, then the financial statements of the company should be signed by at least two directors.
3. Board’s duty to lay Financial Statements:
Quarterly financial statements must be approved from the board.
4. Audit Review of Quarterly financial statements:
The cumulative figures for the half-year, presented in the second quarter financial statements are subject to a limited scope review by the statutory auditors. Such a review is not required for the first and third quarter financial statements.
5. Penalty for non-filing of quarterly financial statements (Section 237):
If a company fails to deliver its quarterly financial statements on time or to comply with the requirements related to quarterly financial statements then every director, including chief executive and chief financial officer of the company who has by his act or omission caused such default would be liable to a penalty of level 2 on the standard scale.