5 THINGS TO KEEP IN MIND DURING ANNUAL FILING (AOC-4, MGT-7/7A), WHICH I HAVE OBSERVED AS COMMON MISTAKES:

1. Signed Financials attached in e-forms must be in rounded off figures like lakhs or hundreds or thousands etc.

According to Schedule III of Companies Act, 2013

Depending upon the ¹¹[Total Income] of the company, the figures appearing in the Financial Statements ¹⁰[shall] be rounded off as given below:—

[Total Income]	Rounding off
(a) less than one hundred crore rupees	To the nearest hundreds, thousands, lakhs or millions, or decimals thereof.
(b) one hundred crore rupees or more	To the nearest lakhs, millions or crores, or decimals thereof.

 

(ii) Once a unit of measurement is used, it  [should] be used uniformly in the Financial Statements.

2. The ratios required as per schedule must also be disclosed in all financials.

Following Ratios to be disclosed:-

(a) Current Ratio,

(b) Debt-Equity Ratio,

(c) Debt Service Coverage Ratio,

(d) Return on Equity Ratio,

(e) Inventory turnover ratio,

(f) Trade Receivables turnover ratio,

(g) Trade payables turnover ratio,

(h) Net capital turnover ratio,

(i) Net profit ratio,

(j) Return on Capital employed,

(k) Return on investment.

The company shall explain the items included in numerator and denominator for computing the above ratios. Further explanation shall be provided for any change in the ratio by more than 25% as compared to the preceding year.

3. As per latest amendment each company is required to designate one person who shall be responsible for extending cooperation to ROC for beneficial interest in the company and detail of the designated person must be intimated to ROC through annual return.

According to the amendment under rule 9 (Declaration in Respect of Beneficial Interest in Any Shares) of the Companies (Management and Administration) Rules, 2014 five new sub-rules are introduced stating:

i) To designate a responsible person for providing information to the Registrar or any authorized officer regarding beneficial interests in the company’s shares;

ii) Options for designating a responsible person, which may include a company secretary, key managerial personnel (other than the company secretary), or every director (if there is no company secretary or key managerial personnel);

iii) Until a responsible person is designated, certain specified individuals under rules are deemed to have been designated;

iv) Every company shall inform the details of the designated person in Annual return; and

v) Further, in case of any change in designated person, the company shall intimate the Registrar vide E-Form GNL-2.

4. UDIN is mandatory in MGT-7 for other than small companies where PCS is certifying the Annual Return.

In case of e Form-MGT 7 as mentioned in paragraph 3 (b) (xiv) of the ICSI UDIN Guidelines, 2019 or in case of any other e-Form(s), the UDIN shall be mentioned by way of attachment in the optional attachment, unless any specific field for the same is provided by the law.

5. If there is a company secretary for the company, the annual return shall only be signed by the Company Secretary in whole time employment of the company as per section 92 of the companies act, 2013.

1) Every company shall prepare a return (hereinafter referred to as the annual return) in the prescribed form containing the particulars as they stood on the close of the financial year regarding—

(a) its registered office, principal business activities, particulars of its holding, subsidiary and associate companies;

(b) its shares, debentures and other securities and shareholding pattern;

(d) its members and debenture-holders along with changes therein since the close of the previous financial year;

(e) its promoters, directors, key managerial personnel along with changes therein since the close of the previous financial year;

(f) meetings of members or a class thereof, Board and its various committees along with attendance details;

[(g) remuneration of directors and key managerial personnel;]

(h) penalty or punishment imposed on the company, its directors or officers and details of compounding of offences and appeals made against such penalty or punishment;

(i) matters relating to certification of compliances, disclosures as may be prescribed;

(j) details, as may be prescribed, in respect of shares held by or on behalf of the Foreign Institutional Investors ; and

(k) such other matters as may be prescribed,

and signed by a director and the company secretary, or where there is no company secretary, by a company secretary in practice:

 

DISCLAIMER: THE CONTENTS OF THIS DOCUMENT ARE PROVIDED BASED ON CURRENT PROVISIONS AND INFORMATION AVAILABLE. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE ACCURACY AND RELIABILITY, NO RESPONSIBILITY IS ASSUMED FOR ANY ERRORS OR OMISSIONS. USERS ARE ENCOURAGED TO REFER TO APPLICABLE LAWS AND REGULATIONS. THIS INFORMATION IS NOT TO BE CONSTRUED AS LEGAL ADVICE, AND NO LIABILITY IS ACCEPTED FOR ANY CONSEQUENCES ARISING FROM ITS USE.

From the desk of CS Sharath

 

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