CS Divesh Goyal

INTRODUCTION:

Section 159,160,161,162 & Schedule V deals with the Annual Return & related Provisions under Companies Act, 1956. But in Companies Act, 2013 all these Sections are combined together in one Section namely – 92.

Annual return is a yearly statement, required to be filed by every company irrespective of their nature, i.e. private, public, listed, unlisted, or status, i.e. active, dormant or under amalgamation. It is perhaps the most important document required to be filed by every company with the Registrar of Companies. Apart from the Financial Statements, this is the only document to be compulsorily filed with the Registrar every year irrespective of any events / happenings in the company.

Section 92 of the Companies Act, 2013 requires every company to prepare an annual return, a comprehensive document which contains information of a company relating to its share capital, indebtedness, directors, shareholders, changes in directorships corporate governance disclosures etc.

The Companies Act, 2013, a historic legislation which intends to improve corporate governance and empower shareholders. The Act has incorporated a framework which is based on self-regulation but with enhanced disclosures and accountability on the part of companies and their managements.

The Ministry of Corporate Affairs vide General Circular 8/2014 dated 04.04.2014 clarified that annual return in terms of section 92 of the Companies Act, 2013 will be in form MGT 7 and will be applicable for financial years commencing on or after 1st April, 2014

TIME PERIOD:

Earlier in the Companies act, 1956 Annual return was prepared for the period from the date of last AGM to date of current AGM. But there is a major change under Companies Act, 2013 i.e. now Companies are required to prepare Annual Return for the financial year i.e. 1st April to 31st March.

ANNUAL RETURN OF FOREIGN COMPANY:

As per section 384(2), the provisions of section 92 shall also apply to a foreign company, subject to such exceptions, modifications and adaptations as may be made therein by rules. Rule 7 of the Companies (Registration of Foreign Companies) Rules, 2014 provides that every foreign company shall prepare and file, within a period of sixty days from the last day of its financial year, to the Registrar annual return in Form FC.4 along with fee, containing the particulars as they stood on the close of the financial year

EXTRACT OF ANNUAL RETURN:

As per sub-section (3) of section 92, the companies are also required to prepare extract of Annual Return in Form No. MGT-9 which shall form part of Board’s Report.

PENALTY:

If a company fails to file its annual return under section 92, before the expiry of the period specified under section 403 with additional fee, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lacs rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months or with fine which shall not be less than fifty thousand rupees but which may extend to five lacs Rupees, or with both.(Section 92).

FILING OF ANNUAL RETURN WITH THE REGISTRAR (SECTION 92(4))

The return has to be filed with the Registrar of Companies within 60 days from the date of Annual General Meeting. If the Annual General Meeting is not held in any year, the return has to be filed within 60 days from the date on which Annual General Meeting should have been held together with the statement specifying the reasons for not holding the Annual General Meeting, on payment of such fee or additional fee as prescribed (Rule 12 of the Companies (Registration Offices and Fees) Rules, 2014.

Let’s Start Detailed discussion on Annual return Preparation of Annual Return:

MCA by Companies (Management and Administration) Amendment Rules, 2015 dated: 28th August, 2015 came out with the Final format of Annual Return (MGT-7).

No.Heading
MGT-7Info RequiredSource of Income
IREGISTRATION AND OTHER DETAILS
Corporate Identification No. CIN No. of CompanyMCA Website
Name of Company Pre-fillPre-fill
Registered office address Pre-fillPre-fill
Email- ID of the company EMAIL ID of CompanyLetter Head of Company
Telephone number with STD code Telephone No. of CompanyLetter Head of Company
Website, if anyWebsite of CompanyLetter Head of Company
Date of IncorporationPre-fillPre-fill
Type of CompanyPre-fillPre-fill
Category of CompanyPre-fillPre-fill
Sub-Category of CompanyPre-fillPre-fill
Whether company is having Share CapitalPre-fillPre-fill
Whether Company is Listed on Recognize Stock ExchangeSelect Yes or NoIf Yes, Then mention

SE code and SE Name

Transfer Agent CIN

Financial Year1st April, 2015 – 31st March -16Financials of Company
Whether AGM HeldIf yes Then Mention Date

If not then provide extentsion details

Minutes of AGM
II.

PRINCIPLE BUSINESS ACTIVITY OF COMPANY

(All the business activities contributing 10% or more of the total turnover of the company shall be stated)

Number of Business activityNIC Code List
Main Activity Group Code99531NIC Code List
Description of main business activityResidential BuildingsNIC Code List
Business Activity code9953112NIC Code List
Description of Business ActivityMulti-dwelling residential buildingsNIC Code List
% of Total Turnover of Company40%NIC Code List
NIC CODE LISThttp://www.mca.gov.in/XBRL/pdf/NPCS_codes.pdf
III.

PARTICULARS OF HOLDING, SUBSIDIARY, JOINT VENTURES

AND ASSOCIATE COMPANIES

Number of Company for which Information is givenCheck the Investments of Company and Check the Shareholder of Company.
Name of CompanyPre- fillBalance Sheet- Investment of Company
CIN of CompanyMCA WebsiteBalance Sheet- Investment of Company
Holding/ Subsidiary/ Joint VentureCheck Status as per DefinitionBalance Sheet- Investment of Company
% of shares HeldBalance Sheet- Investment of Company

POINTS TO BE KEPT IN MIND WHILE PREPARING THE POINT NO III:

1. Check the Register of Member for – Subsidiary.

2. Check the definition of Holding, Subsidiary and Associate Company.

3. Check the Investment Register of the auditee company.

4.

SHARE CAPITAL, DEBENTURES AND OTHER SECURITIES

OF THE COMPANY

(I)SHARE CAPITAL
(a)Equity/ Preference Share Capital
ParticularsFace ValueAuthorized CapitalIssued CapitalSubscribed capitalPaid up Capital
Total no. of shares1. Balance Sheet

2. MCA Website

3. Register of Members

Number of classesCheck whether there is different-2 class of Equity shares.
Class of sharesAuthorized CapitalIssued CapitalSubscribed capitalPaid up Capital
1. Balance Sheet

2. MCA Website

3. Register of Members

(d)Break-up of paid-up Share Capital
Class of sharesNumber of sharesTotal Nominal AmountTotal Paid-up amountTotal premium
Equity Shares
At the beginning of the Year
Increase during the Year

Points to be kept in mind while preparing the point No d:

1. Register of Member at the beginning of the Year.

2. Whether any allotment during the year (PAS-3)

3. Type of Allotment.

Decrease during the Year
Points to be kept in mind while preparing the point No d:

1. Register of Member at the end of the Year.

2. Transfer of Shares during the year.

3. Forfeiture of shares during the year, if any.

4. Redemption of Shares during the year if any.

(III)Details of shares/debenture transfers since closure date of last financial year(or in the case of the first return at any time since the incorporation of the Company)
Points to be kept in mind while preparing the point No d:

1. Register of Share Transfer.

2. Share Transfer Deeds.

3. Minutes of Board Meeting.

(IV)Indebtedness including debentures(Outstanding as at the end of Financial Year)
Points to be kept in mind while preparing the point No d:

1. Register of Securities.

2. Balance Sheet.

V.

TURNOVER AND NET WORTH OF THE COMPANY

(AS DEFINED IN THE COMPANIES ACT. 2013)

Turn OverTurn over as on 31.03.2015Statement of Profit & Loss account- Income side.
Net worthNet Worth as on 31.03.2015Check Balance Sheet and Calculate as:

As given in 2 (57) of Companies Act, 2013

VI.SHARE HOLDING PATTERN
SHARE HOLDING PATTERN- PROMOTER
Given in Table format Below- Annexure INumber of Shares and Percentage of Share holding.1. Check the Status of Promoter.

2. Register of Members

SHARE HOLDING PATTERN- PUBLIC
Given in Table format Below- Annexure INumbers of Shares and Percentage of Share holding.1. Register of Members

2. Register of Shareholder

SHARE HOLDING PATTERN- PUBLIC (FII)
Details Of Foreign Institutional Investors’ (FILS) Holding Shares Of The Company.Name of FII Address, Date of Incorporation,

Country of Incorporation

No. of Share Hold and Percentage of Share Holding.

1. Register of Members

POINTS TO BE KEPT IN MIND WHILE PREPARING THE POINT NO VI:

1. Read the Definition of Promoter given in section 2(69) of Companies Act, 2013. As per definition decide the Promoters of the Company.

2. Shareholding of person other than promoter is to be entered in Share Holding Pattern- Public.

VII.NUMBER OF PROMOTERS, MEMBERS, DEBENTURE HOLDERS
Promoters
At the Beginning of YearAdditionCessationAt the End of year
1. Register of Members

2. PAS-3 (filed during the Year)

3. Transfers Deeds

4. Minutes of the Meetings

Members

{other than promoters)

Debenture holders

POINTS TO BE KEPT IN MIND WHILE PREPARING THE POINT NO VII:

1. Check Register of Member (Shareholder at the beginning of the Year).

2. Check whether there is any allotment during the year for (Addition).

3. Check whether any Transfer/forfeiture/Buy-back for (Cessation).

4. Check the Register of Member (Shareholder at the end of the Year).

VIII.DETAILS OF DIRECTORS AND KEY MANAGDRIAL PERSONNEL- Annexure- III
PromoterCheck as per Definition
Executive & Non executiveCheck form DIR-121. Register of Director

2. DIR-12

No. of Director at Beginning of the yearCheck No. of Total Director as on beginning of the year (as on 01.04.2014)Register of Director
No. of Director at the end of the yearCheck No. of Total Director as on end of the year (as on 31.03.2015)1. Register of Directors

2. MCA Website

Percentage of share held by Director at the end of the YearDirector Shareholding as on 31.03.2015 i.e. at the end of the year.Register of Directors Shareholding
Independent or NotCheck status of Director1. Declaration of Independency

2. DIR-12

3. Register of Director

Nominee or RepresentativeCheck Status1. DIR-12

2. Register of Member

No. of Director & KMP as on 31.03.2015Check Register of Directors

VII.

 

DETAILS OF DIRECTORS & KMP AS ON CLOSURE OF FINANCIAL YEAR
NameName of all the Directors and KMP as on 31st March1. Register of Director

2. MCA

3. DIR- 12

DINDIN of all the Directors and KMP as on 31.03.20151. Register of Director

2. MCA

DesignationDesignation of all the Directors and KMP as on 31st March1. Register of Director

2. MCA

3. DIR- 12

Number of Equity Shares heldShareholding of all the Directors and KMP as on 31st March1. Register of Director Shareholding

2. Register of Member

Date of Cessation

(after closure of Financial Year if any)

Between 31.03.2015 to Date of finalization of Annual Return1. DIR-12

2. MCA

3. Minutes

VIII

 

PARTICULAR OF CHANGE IN DIRECTOR(S) OR KMP

DURING THE YEAR

Name1. Register of Director

2. DIR-12

DIN1. Register of Director

2. DIR-12

3. DIN-3

Designation at the beginning/ during the financial year1. Register of Director

2. DIR-12

Date of Appointment/ Change in designation / Cessation1. Register of Director

2. DIR-12,

Nature of Cessation

(after closure of Financial Year if an Date of Appointment/ Change in designation / Cessation

1. Register of Director

2. DIR-12

Points to be kept in mind while preparing the point No VIII:

1. Check the Register of Director

2. Check Form DIR-12

3. Check the MCA Website

IX.MEETINGS OF MEMBERS
Type of MeetingNotice of the Meeting
Date of MeetingMinutes of the Meeting
Total No. of Member entitle to attend MeetingRegister of Member
Number of Members PresentAttendance Sheet & Proxy Sheet of Meeting
Present Member- % of shareholdingAttendance Sheet with Register of Member
IX.MEETINGS OF BOARD
Date of MeetingMinutes of the Meeting
Total No. of Director as on date of MeetingRegister of Director
Number of Director PresentAttendance Sheet of Meeting
Present Director- % of Total DirectorAttendance Sheet with Register of Director
IX.MEETINGS OF COMMITTEE
Type of MeetingName of Committee
Date of MeetingMinutes of the Meeting
Total No. of Members as on date of MeetingList of Members of Committee
Number of Member PresentAttendance Sheet of Meeting
% of total shareholdingAttendance Sheet with total no. of Members

Note:

After filling of above mention details there is Part ‘D’ of Point ‘IX’ which talks about the presence of Director in all type of Meeting whether Board, Committee and General Meeting. It will calculate the presence of Director in the Business of Company by calculating his presence in the Meetings of the Company.

Points to be kept in mind while preparing the point No IX:

1. Check the Frequency of No. of Meeting

2. Check the Quorum of the Meeting

X.

REMUNERATION TO DIRECTORS AND KMP

MD/ WTD/ MANAGER/ CEO/ CFO/ CS/ Director

NameName of the Person
Designation1. Register of Director

2. MCA

3. DIR-12

Gross Salary1. Balance Sheet of the Company

2. Minutes of Meeting in which appointment made

3. Appointment Letter

CommissionLedger
Stock optionBalance Sheet of the Company
OthersBalance Sheet of the Company
Total AmountBalance Sheet of the Company

Note:

Remuneration to all the Directors / KMP / required to be given in the Annual Return.

Points to be kept in mind while preparing the point No XII:

1. Verify the Amount of Remuneration from Balance Sheet, Ledger, Minutes of appointment / increase in remuneration and any form if filed.

XII.

PENALTY/ PUNISHMENT DETAILS THEREON

Company/ Director/ Officer

Name of Company/

Director/ Officer

Check with the Director/ Officer and Company whether they penalize during the year.
Name of Court/ Concerned Authority.If answer of above Question is Yes, then mention the Name of Authority.
Date of OrderIf Order Passed, then Mention dates of Order – Copy of Order.
Name of Act And Section Under Which PenalizedCheck the Section and Act under which Penalty Levied.
Details of Penalty Brief Particular of Offence penalized.
Details of Appeal & Present StatusDetails of appeal done during the financial year and current status.
XII.Details of Compounding of Offence
Name of Company/

Director/ Officer

Check with the Director/ Officer and Company whether they gone for any compounding during the financial year.
Name of Court/ Concerned AuthorityIf answer of above Question is Yes, then mention the Name of Authority
Date of OrderIf Order Passed, then Mention date of Order – Copy of Order
Name of Act and Section under which CommittedCheck the Section under which compounding was done.
Particular of offence Brief Particular of Offence compounded
Amount of compoundingAmount levied by authority on compounding.

Note:

For the better Corporate Governance, Knowledge of Stake Holders and for the Transparency regarding default of Company, Its Directors and Officer above step is taken by the Ministry.

Points to be kept in mind while preparing the point No XII:

1. Check maximum amount of the fine- If it does not exceed five lakh rupees then the application for compounding of an offence be made to Regional Director and in other case to the tribunal.

2. Refer the particular Sections of the Companies Act, 2013 to identify the nature of offence and penalty/ punishment

NOTEBelow Given Part No. XI. XIV

I will discuss in my Next Article– Professional Involvement in preparation of Annual Return

XI. Whether company has made all compliances and disclosures during the year
XIII.Whether complete list of shareholders, debenture holders has been enclosed as an attachment
XIV.Compliance of Sub-Section (2) of Section 92, in Case of Listed Companies

(Author – CS Divesh Goyal, ACS is a Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)

Read Other Articles Written by CS Divesh Goyal

(Republished with amendments)

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