📝 Background :

The Registrar of Companies (RoC) penalised a company and its directors for not ensuring that the statutory auditor attended the company’s Annual General Meeting (AGM)— a statutory obligation under the Companies Act, 2013.

📌 Key Points

🔹 Statutory Requirement

Under Section 146 of the Companies Act, 2013, the statutory auditor must attend the AGM either in person or via a qualified authorised representative.

Secretarial Standard (SS-2) also mandates auditor attendance and the right to be heard on audit-related business at AGMs.

Non-Compliance Observed

• During an inquiry under Section 206(4) of the Act, it was found that the auditor failed to attend AGMs on specific dates (e.g., 31 Dec 2020 and 30 Nov 2021) for the concerned company.
• No response or hearing request was received from the company or its officers despite a Show Cause Notice.

🔹 Penalties Imposed

Penalty on the Company: ₹25,000 (maximum under statute).

Penalty on Each Director (Officers in Default): ₹5,000 each.

Total Penalty:

₹40,000 levied under Section 118(11) of the Companies Act for failing to comply with AGM auditor attendance rules.

• The company and directors are obliged to rectify the default and pay penalties via the MCA e-Adjudication portal within the stipulated timeline.

📌 Key Takeaways

✅ Auditor Attendance at AGM Is Mandatory:

Companies must ensure that their statutory auditors attend AGMs as required under law — it’s not a mere procedural expectation but a statutory duty.

✅ Documentary Compliance Alone Is Not Enough:

Forwarding notice to the auditor is not sufficient; actual attendance (in person or through a qualified representative) is necessary to avoid penalty.

✅ Non-Compliance Attracts Penal Liability:

Failure to ensure auditor attendance attracts adjudication penalties on both the company and its directors.

🔎 Governance Implication:
Ensuring auditor presence enhances transparency and corporate governance, reaffirming the auditor’s role in shareholder oversight.

Sources: ROC Kanpur passed Adjudication Order (ID: PO/ADJ/10-2025/KN/00762, dated 13.10. 2025)