Covid-19: CCM Practice Directive No. 6/2020 on AGM and lodgement of financial statements
13 April 2020
Further to the announcement by the Prime Minister of Malaysia on 6 April 2020
[1] that companies with financial years ended 30 September 2019 to 31 December 2019 that are affected by the Covid-19 pandemic (‘Eligible Company’) will be granted a 3-month extension to lodge their financial statements, the Companies Commission of Malaysia (‘CCM’) issued
Practice Directive No. 6/2020 (‘PD6/2020’) titled ‘
Extension of Time for Annual General Meeting and Lodgment of Financial Statement’ on 7 April 2020.
It was also stated in the Prime Minister’s announcement that an Eligible Company will be required to submit an application to the CCM for such approval and the application fee will be waived.
Exercise of powers to grant extensions and waiver
Pursuant to paragraph 12 of PD6/2020, the Registrar has exercised the following powers conferred on him to:
- grant an extension of time of three months to an Eligible Company to hold its annual general meeting (‘AGM’);[2]
- grant extension of time of three months to an Eligible Company to lodge its financial statements with the Registrar;[3] and
- waive the fee of RM100 for the applications in respect of each of the matters set out in paragraphs (a) and (b) above.[4]
Application procedure and approval
Although paragraph 13 of PD6/2020 states that ‘blanket approval’ will be given in respect of the extensions under paragraphs 12(a) and 12(b) of PD6/2020, an Eligible Company is required to lodge an application to Registrar:
- in Annexure A to PD6/2020 for extension of time to lodge financial statements; and
- in Annexure B to PD6/2020 for an extension of time for holding its AGM.
The applications are to be submitted by email to
eot@ssm.com.my.
The extension of time will be granted as follows:
- for lodgement of financial statements, the three months extension will be effective from the date the financial statements were supposed to be lodged; and
- for holding of AGM, the three months extension will be effective from the date the AGM was supposed to be held.
Time frame for circulating financial statements
Section 258(1) of the Companies Act 2016 (‘CA2016’) requires a private company to circulate its financial statements to its members within six months of its financial year end, and a public company to circulate its financial statements to its members at least twenty-one days before the date of its AGM.
Annexure A to PD6/2020 permits an Eligible Company to seek an extension of the applicable time frame under section 258 to circulate its financial statements to its members. An application fee of RM100 is payable for this application. More importantly, what is unclear is whether the ‘blanket approval’ will be granted for such an application given that such application is not referred to in PD6/2020.
[1] The announcement was included in the Prime Minister’s speech on Prihatin SME+ on 6 April 2020 and is available
here.
[2] The power to grant an extension is contained in section 340(4) of CA2016.
[3] Section 259(1) of CA2016 requires (a) a private company to submit its financial statement within 30 days from the date of circulation of the financial statements to its shareholders, and (b) a public company to submit its financial statement within 30 days from the date its annual general meeting. The Registrar has the power to grant an extension of these deadlines under section 259(2) of CA2016.
[4] The power to waive fees is set out in Regulation 8(5) of the Companies Regulations 2017.