ROC GUJARAT IMPOSED A PENALTY OF ₹11.40 LAKHS ON ESSAR SHIPPING LIMITED AND ITS DIRECTORS FOR IMPROPER MAINTENANCE OF AUDIT COMMITTEE MINUTES VIOLATING SECTION 118(10) OF THE COMPANIES ACT, 2013.

 ROC GUJARAT IMPOSED A PENALTY OF ₹11.40 LAKHS ON ESSAR SHIPPING LIMITED AND ITS DIRECTORS FOR IMPROPER MAINTENANCE OF AUDIT COMMITTEE MINUTES VIOLATING SECTION 118(10) OF THE COMPANIES ACT, 2013.

ROC, GUJARAT VS ESSAR SHIPPING LIMITED

FACTS OF THE CASE

ROC GUJARAT IMPOSED A PENALTY OF ₹11.40 LAKHS ON ESSAR SHIPPING LIMITED AND ITS DIRECTORS FOR IMPROPER MAINTENANCE OF AUDIT COMMITTEE MINUTES, INCLUDING NUMBERING WITH PENCIL, LEAVING BLANK PAGES, AND FAILURE OF THE CHAIRMAN TO SIGN THE MINUTES—VIOLATING SECTION 118(10) OF THE COMPANIES ACT, 2013.

VIOLATION:

·       Improper maintenance of Audit Committee Minutes Book

·       Page numbering done with pencil

·       Blank pages left in the register

·       Serial numbers not properly maintained

·       Minutes not signed by the Chairman

LEGAL PROVISION BREACHED:

·       Section 118(10), Companies Act, 2013 → mandates compliance with Secretarial Standards (SS-1 & SS-2) issued by ICSI.

These standards require proper numbering, authentication, and signing of minutes by the Chairman.

PENALTY IMPOSED:

·       ₹10.50 lakh on the Company

·       ₹45,000 on the Chairman of the Audit Committee

·       ₹45,000 on Directors

·       Total: ₹11.40 lakh

KEY COMPLIANCE LESSONS

·       Minutes must be numbered in ink (not pencil) to prevent tampering.

·       No blank pages should be left in statutory registers.

·       Chairman’s signature is mandatory for authentication.

·       Audit Committee records are subject to strict scrutiny by ROC/MCA.

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