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Applicable provisions: Section 92(2) of the Companies Act, 2013 read with Rule 11 of Companies (Management and Declaration) Rules, 2014.

The annual return (Form MGT 7), filed by a listed company or, by a company having such paid-up capital and turnover as may be prescribed, shall be certified by a Company Secretary in practice in the prescribed form, stating that the annual return discloses the facts correctly and adequately and that the company has complied with all the provisions of this Act.

In laymen language, the Company Secretary shall certify that the annual return discloses the facts correctly and adequately and the firm has complied with all the provisions of the Act.

Applicability:

  • Every listed company,
  • Company having Paid Up Share capital 10cr or more and
  • Turnover 50cr or more

Items which are covered under the report:

Form MGT 8

  • Status of the company under the act
  • Maintenance of registers/records
  • Filing of forms and returns
  • Calling/convening/holding Board Meeting or its committee meeting, if any, and meeting of members on due dates as stated in the annual return
  • Closure of register of members/security holders
  • Advances to directors or persons mentioned in section 185 of the Companies Act, 2013.
  • Contracts or arrangements with persons specified in Section 188 of the Companies Act, 2013 as related parties.
  • Details of changes in share capital by way of issue, transfer, transmission, redemption, buyback or conversion of securities.
  • Right of dividend/bonus shares/right shares being kept in abeyance till the registration of transfer is completed.
  • Amount to be moved to the Investor Education and Protection Fund as per Section 125 of the Companies Act, 2013.
  • The signing of audited FS as per section 134 and Boards report is as per sub-section (3), (4) and (5) of section 134
  • Appointment/reappointment/remuneration pertaining to directors and key managerial personnel and the remuneration paid to them
  • Appointment/re-appointment/filling up casual vacancies of auditors as per section 139
  • Approvals required to be taken from the CG, NCLT, RD, Registrar of Companies, Court or such other authorities under the provisions of the Act.
  • Acceptance, renewal and repayment of deposits.
  • Borrowings from the directors, members, public financial institutions, banks, and others
  • Loans and investments or guarantee given or providing of securities to other bodies (corporate or persons falling under the provisions of section 186 of the Act).
  • Alteration of the articles of association/memorandum of association.

Every annual return is requires to be certifying by practicing Company secretary in Form MGT 8.

Penalty: If a company secretary in practice certifies the annual return otherwise than in conformity with the requirements of this section or the rules made thereunder, he shall be liable to a penalty of two lakh rupees.

A practicing company secretary will be liable for disciplinary actions by the Disciplinary Committee of the ICSI under the provisions of the Company Secretaries Act, 1980. Further, Section 448 of Companies Act, 2013 also imposes a penalty if any return, report, certificate, financial statement, prospectus, statement or any other document makes a false statement or omits any material fact.

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Disclaimer: –The above mentioned article has been based on relevant provisions of Companies Act, 2013. Under no circumstance, the author shall not liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information.

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