ROC Mumbai Levies Rs. 2 Lakh Penalty on Company for Delayed Secretarial Audit Report Compliance Under Section 204
Background of the Adjudication Proceedings
The Registrar of Companies, Mumbai has issued a significant adjudication order imposing substantial penalty on a corporate entity for its failure to comply with the mandatory requirements concerning Secretarial Audit Reports. The adjudication order, bearing reference PO/ADJ/02-2026/MB/01632 and dated 10.02.2026, was issued pursuant to the powers vested under Section 454 of the Companies Act, 2013. This order addresses violations pertaining to Section 204(1) read with Section 204(4) of the Companies Act, 2013.
The Ministry of Corporate Affairs had appointed the undersigned Registrar as the Adjudicating Officer through its Gazette notification number S.O. 831(E) dated 24/03/2015. This appointment was made in exercise of the powers conferred by Section 454 of the Companies Act, 2013, read together with the Companies (Adjudication of Penalties) Rules, 2014, for the purpose of adjudging penalties under various provisions of the statute.
Details of the Corporate Entity Involved
The corporate entity under scrutiny in these proceedings is EVONIK INDIA PRIVATE LIMITED, a company bearing Corporate Identification Number (CIN) U25200MH1998PTC113786. This company is duly registered with the Registrar of Companies, Mumbai under the applicable provisions of the Companies Act, 2013/1956. The registered office of this corporate entity is located at PLOT NO. D-5, WAGLE INDUSTRIAL ESTATE ROAD NO. 34, PANCHPAKHADI WAGLE I.E. THANE THANE MAHARASHTRA INDIA 400604.
The proceedings also initially involved VINOD PAREMAL, who holds the position of Managing Director and is identified by Director Identification Number (DIN) 08803466.
Statutory Framework and Applicable Provisions
Section 204 Requirements
The primary statutory provision at the heart of this matter is Section 204 of the Companies Act, 2013, which establishes mandatory obligations regarding Secretarial Audit Reports. According to Section 204(1), every listed company and companies belonging to other prescribed classes must annex with its Board's report (as required under sub-section (3) of Section 134), a secretarial audit report prepared by a company secretary in practice, in the form as may be prescribed.
Section 204(2) further imposes a duty upon the company to provide all necessary assistance and facilities to the company secretary in practice for conducting the audit of secretarial and related records of the company.
Penal Consequences Under Section 204(4)
Section 204(4) of the Companies Act, 2013 prescribes the consequences for non-compliance with the provisions of Section 204. The statutory language reads as follows:
"If a company or any officer of the company or the company secretary in practice, contravenes the provisions of this section, the company, every officer of the company or the company secretary in practice, who is in default, shall be liable to a penalty of two lakh rupees."
This provision establishes a maximum penalty ceiling of Rs. 2,00,000 for violations concerning Secretarial Audit Report requirements.
Factual Matrix of the Default
Timeline of Events
The chronological sequence of events that led to this adjudication is crucial for understanding the nature and extent of the default committed by the company.
The financial statements of EVONIK INDIA PRIVATE LIMITED for the Financial Year 2021-2022 were approved by the Board of Directors and subsequently by the members in the Annual General Meeting conducted on 29.09.2022. This approval was granted in accordance with the statutory requirements governing the finalization of financial statements.
However, a critical compliance gap emerged in the company's regulatory adherence. The mandatory Secretarial Audit Report for the Financial Year 2021-2022, which should have been obtained prior to the approval of the Board's Report and financial statements, was actually procured only on 29.03.2023. This represents a delay of approximately six months from the date of the Annual General Meeting.
Following the belated procurement of the Secretarial Audit Report, the company filed its financial statements for FY 2021-2022 through E-form AOC-4, which was submitted under Service Request Number (SRN) F60081593 on 30.03.2023.
Nature of the Violation
The fundamental violation in this case stems from the company's failure to obtain the Secretarial Audit Report in a timely manner before presenting the Board's Report to the members at the Annual General Meeting. Section 204(1) explicitly mandates that prescribed companies must annex the Secretarial Audit Report with the Board's Report made under Section 134(3) of the Act.
Since the Board's Report is required to be attached to the financial statements as per Section 134(4), and the Secretarial Audit Report must be annexed to the Board's Report as per Section 204(1), the proper sequence demands that the Secretarial Audit Report be obtained before the finalization and approval of the financial statements at the Annual General Meeting.
In the present case, the company proceeded with the approval of financial statements on 29.09.2022 without having the requisite Secretarial Audit Report in place, thereby committing a clear contravention of Section 204(1) of the Companies Act, 2013.
Adjudication Process and Procedural Compliance
Suo-Motu Application by the Company
The Registrar of Companies, Mumbai received a suo-motu Adjudication Application dated 19.12.2025 filed by EVONIK INDIA PRIVATE LIMITED under Section 454 read with Section 204 of the Companies Act, 2013. In this application, the company itself acknowledged the default and admitted to the violation of statutory provisions.
The company's voluntary disclosure stated that although the financial statements were approved on 29.09.2022 during the Annual General Meeting for FY 2021-2022, the Secretarial Audit Report required under Section 204 was obtained only on 29.03.2023. Consequently, the financial statements for FY 2021-2022 were filed in E-form AOC-4 only thereafter. The company recognized its liability for penalty under Section 204(4) of the Act.