Article contains Checklist, Contents and Detailed disclosure in Board Report related to Approval & Signing of Financial Statements, Board’s Report & its contents, Details of formal annual evaluation, Financial highlights, Change in KMP, details of Subsidiaries, Holding & Associate, Deposits accepted in compliance of Act, Default in repayment of deposits, Details of Deposits, Material order passed by Tribunal, Internal Financial Control, Details wrt Cost Records, Compliance under Prevention of Sexual Harassment Act, Risk Management Policy, CSR Policy, Statement on Formal Annual evaluation, Non repetition of Information, Directors’ Responsibility Statement, Proper system for compliance tracking, Signing of Boards Report, Circulation of FS, Board Report & Auditors Report, Penalty for contravention, MGT -7 & its Contents, Signing of Boards Report, Uploading on Website, Filing with ROC, PCS Certification and Penalty for contravention.
| PARTICULARS | DESCRIPTION |
| SECTION 134 | |
| Approval & Signing of FS | The FS, including consolidated FS, if any, shall be approved by the BOD before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by 2 directors out of which one shall be MD, if any, and the CEO, the CFO and the CS of the company, wherever they are appointed, or in the case of One Person Company, only by one director, for submission to the auditor for his report thereon. |
| The auditors’ report shall be attached to every financial statement. | |
| Board’s Report & its contents | There shall be attached to statements laid before a company in general meeting, a report by its Board of Directors, which shall include— |
| the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed | |
| number of Board meetings; | |
| Directors’ Responsibility Statement; | |
| details in respect of frauds reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government; | |
| a statement on declaration given by independent directors under sub-section (6) of section 149; | |
| in case of a company covered under sub-section (1) of section 178, company’s policy on directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178;] | |
| explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made— | |
| (i)by the auditor in his report; and | |
| (ii) by the company secretary in practice in his secretarial audit report; | |
| particulars of loans, guarantees or investments under section 186; | |
| particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the prescribed form; | |
| the state of the company’s affairs; | |
| the amounts, if any, which it proposes to carry to any reserves; | |
| the amount, if any, which it recommends should be paid by way of dividend; | |
| material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report | |
| the conservation of energy, technology absorption, foreign exchange earnings and outgo, in such manner as may be prescribed; | |
| (1) The Board’s Report shall be prepared based on the stand alone financial statements of the company and shall report on the highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the company during the period under report. | |
| (2) The Report of the Board shall contain the particulars of contracts or arrangements with related parties referred to in sub-section (1) of section 188 in the Form AOC-2. | |
| (3) The report of the Board shall contain the following information and details, namely:- | |
| (A) Conservation of energy- | |
| (i) the steps taken or impact on conservation of energy; | |
| (ii) the steps taken by the company for utilising alternate sources of energy; | |
| (iii) the capital investment on energy conservation equipments; | |
| (B) Technology absorption- | |
| (i) the efforts made towards technology absorption; | |
| (ii) The benefits derived like product improvement, cost reduction, product development or import substitution; | |
| (iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- | |
| (a) The details of technology imported; | |
| (b) The year of import; | |
| (c) Whether the technology been fully absorbed; | |
| (d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and | |
| (iv)The expenditure incurred on Research and Development. | |
| (C) Foreign exchange earnings and Outgo- | |
| The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows. | |
| “Provided that the requirement of furnishing information and details under this sub-rule shall not apply to a government company engaged in producing defence equipment”. | |
| Details of formal annual evaluation | (4) Every listed company and every other public company having a paid up share capital of twenty five crore rupees or more calculated at the end of the preceding financial year shall include, in the report by its Board of directors, a statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors. |
| (5) In addition to the information and details specified in sub-rule (4), the report of the Board shall also contain – | |
| Financial highlights, Change in KMP, details of Subsidiaries, Holding & Associate | (i) The financial summary or highlights; |
| (ii) The change in the nature of business, if any; | |
| (iii) The details of directors or key managerial personnel who were appointed or have resigned during the year; | |
| (iv) The names of companies which have become or ceased to be its Subsidiaries, joint ventures or associate companies during the year; | |
| Deposits accepted in compliance of Act | (v) the details relating to deposits, covered under Chapter V of the Act,- |
| (a) Accepted during the year; | |
| (b) remained unpaid or unclaimed as at the end of the year; | |
| Default in repayment of deposits | (c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved- |
| (i) At the beginning of the year; | |
| (ii) Maximum during the year; | |
| (iii) At the end of the year; | |
| Details of Deposits | (vi)The details of deposits which are not in compliance with the requirements of Chapter V of the Act; |
| Material order passed by Tribunal | (vii) The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future; |
| Internal Financial Control | (viii) The details in respect of adequacy of internal financial controls with reference to the Financial Statements. |
| Details wrt Cost Records | (ix) a disclosure, as to whether maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is required by the Company and accordingly such accounts and records are made and maintained, |
| Compliance under Prevention of Sexual Harassment Act | (x) a statement that the company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 |
| (6) This rule shall not apply to One Person Company or Small Company. | |
| Risk Management Policy | Statement indicating development and implementation of a risk management policy for the company including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company; |
| CSR Policy | the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year; |
| Statement on Formal Annual evaluation | in case of a listed company and every other public company having such paid-up share capital as may be prescribed, a statement indicating the manner in which formal annual evaluation of the performance of the Board, its Committees and of individual directors has been made; |
| such other matters as may be prescribed. | |
| Non repetition of Information | Provided that where disclosures referred to in this sub-section have been included in the financial statements, such disclosures shall be referred to instead of being repeated in the Board’s report. |
| Provided further that where the policy referred to above is made available on company’s website, if any, it shall be sufficient compliance of the requirements under such clauses if the salient features of the policy and any change therein are specified in brief in the Board’s report and the web-address is indicated therein at which the complete policy is available | |
| the Central Government may prescribe an abridged Board’s report, for the purpose of compliance with this section by One Person Company or small company. | |
| The report of the Board of Directors to be attached to the financial statement under this section shall, in case of a One Person Company, mean a report containing explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by the auditor in his report. | |
| Directors’ Responsibility Statement | the Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) shall state that— |
| (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; | |
| (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; | |
| (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; | |
| (d) the directors had prepared the annual accounts on a going concern basis; and | |
| (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. | |
| Explanation.—For the purposes of this clause, the term “internal financial controls” means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information; | |
| Proper system for compliance tracking | the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. |
| Signing of Boards Report | The Board’s report and any annexures thereto under sub-section (3) shall be signed by its chairperson of the company if he is authorised by the Board and where he is not so authorised, shall be signed by at least two directors, one of whom shall be a MD, or by the director where there is one director. |
| Circulation of FS, Board Report & Auditors Report | A signed copy of every financial statement, including consolidated financial statement, if any, shall be issued, circulated or published along with a copy each of— |
| (a) any notes annexed to or forming part of such financial statement; | |
| (b) the auditor’s report; and | |
| (c) the Board’s report referred to in sub-section (3). | |
| Penalty for contravention | If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both. |
| Section 92: | |
| 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— | |
| MGT -7 & its Contents | (1) Every company shall prepare its annual return in Form No. MGT.7. |
| (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, | |
| Signing of Boards Report | And signed by a director and the company secretary, or where there is no company secretary, by a company secretary in practice: |
| Provided that in relation to One Person Company and small company, the annual return shall be signed by the company secretary, or where there is no company secretary, by the director of the company. | |
| Provided further that the Central Government may prescribe abridged form of annual return for “One Person Company, small company and such other class or classes of companies as may be prescribed. | |
| Uploading on Website | (3) Every company shall place a copy of the annual return on the website of the company, if any, and the web-link of such annual return shall be disclosed in the Board’s report. |
| Filing with ROC | (4) Every company shall file with the ROC a copy of the annual return, within 60 days from the date on which the AGM is held or where no AGM is held in any year within 60 days from the date on which the AGM should have been held together with the statement specifying the reasons for not holding AGM, with such fees or additional fees as may be prescribed. |
| PCS Certification | (2) The annual return, filed by a listed company or a company having paid-up share capital of ten crore rupees or more or turnover of fifty crore rupees or more, shall be certified by a Company Secretary in practice and the certificate shall be in Form No. MGT.8. |
| Penalty for contravention | (5) If any company fails to file its annual return under sub-section (4), before the expiry of the period specified therein, such company and its every officer who is in default shall be liable to a penalty of 50,000 rupees and in case of continuing failure, with further penalty of 100 Rs. for each day during which such failure continues, subject to a maximum of five lakh rupees. |
| (6) 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 punishable with fine which shall not be less than 50,000 rupees but which may extend to 5,00,000 rupees | |