Lahore: In a significant development, the Securities and Exchange Commission of Pakistan (SECP) has imposed a penalty on MIS. Affaq Steel Mills (Private) Limited for failing to submit its audited financial statements for the year ended 2023 within the prescribed timeline, as mandated by the Companies Act, 2017. This breach of compliance has led to a penalty of Rs. 10,000 being levied on the company.

The proceedings against Affaq Steel Mills were initiated through a Show Cause Notice (SCN) dated April 29, 2024, under sections 233 and 479 of the Companies Act, 2017. The company failed to file its financial statements with the Registrar within the required timeframe, which is a mandatory requirement under Section 233 of the Act. The violation was deemed serious enough to attract penal action under the law.

The initial hearing was scheduled for May 08, 2024, but neither the company nor its directors appeared. A subsequent opportunity for a hearing was provided, yet again, there was no representation from the company. Finally, on May 23, 2024, Muhammad Shahzad, an authorized representative, appeared on behalf of the company, citing restructuring issues within the finance and accounts department as the reason for the delay. However, his explanations were deemed insufficient by the adjudicating officer.

According to information available from the Pakistan Stock Exchange (PSX), the failure to meet the filing requirements has raised concerns about the internal control mechanisms of Affaq Steel Mills. The SECP emphasized the importance of timely and accurate financial reporting to ensure transparency and accountability in the company’s operations.

The adjudicating officer, under powers delegated by the Commission’s Notification S.R.O. 1546 (1)/2019, found the company’s non-compliance to be deliberate, necessitating strict action. The directors of Affaq Steel Mills were reminded of their fiduciary duty to ensure that the company complies with all legal and regulatory requirements.

The penalty must be deposited in the designated bank account within thirty days from the receipt of the order. The SECP has warned that failure to pay the fine could result in further recovery proceedings against the company and its directors.

This order serves as a reminder to all companies in the designated market category to adhere to the legal requirements for financial reporting, ensuring that their financial statements are filed in a timely manner with the relevant authorities. The SECP continues to enforce strict compliance to safeguard the interests of stakeholders and maintain market integrity.