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1. SECRETARIAL AUDIT AND ANNUAL RETURN
CERTIFICATION
UNDER COMPANIES ACT, 2013
1 ST AUGUST 2014
NEW DELHI

2. NEW DEFINITIONS
• One Person Company
• ASSOCIATE COMPANY
• CONTROL
• FINANCIAL INSTITUTIONS
• INDEPENDENT DIRECTOR
• REMUNERATION
• TURNOVER
• PUBLIC COMPANY
• HOLDING SUBSIDIARY
• RELATED PARTY
• OFFICER IN DEFAULT
• AUDITING STANDARDS
• CEO AND CFO
• SMALL COMPANY
• SFIO

3. OTHER CHANGES
PRIVATE COMPANIES- MAXIMUM MEMBER RAISED
50 TO 200
WITH CHANGE IN ACTIVITY CHANGE IN NAME
COMPULSORY
CONCEPT OF A PRIVATE COMPANY WHICH IS A
SUBSIDIARY OF A PUBLIC COMPANY NO MORE
RELEVANT

4. IMMEDIATE ACTIONS
DO VALUE ADDITION BY TAKING QUICK ACTIONS
• SECTION 5 MODIFICATION IN AOA
• SECTION 12 LETTERHEAD TO INCLUDE
+ CIN, NAME, ADDRESS,
+ TELEPHONE NO, FAX
+ EMAIL, WEBSITE
• SECTION 74 REPORT ABOUT EXISTING DEPOSITS
( now extension given )
• FORMER NAME TO BE DISPLAYED OUTSIDE THE OFFICE FOR 2 YEARS
FROM CHANGE

5. • SECTION 135 CORPORATE SOCIAL RESPONSIBILTY
CSR COMMITTEE
SPEND 2% OF AVG. NET PROFIT OF 3 YRS
• SECTION 149 COMPOSITION OF BOARD OF DIRECTOR
RESIDENT DIRECTOR
INDEPENDENT DIRECTOR
WOMAN DIRECTOR (WITHIN 12 MNTHS)
• SECTION 180 POWER OF BOARD
CERTAIN POWERS ONLY AT A MEETING

6. • SECTION 184 DISCLOSURE OF INTEREST BY DIRECTOR
FORM MBP 1
NOTE THAT IN THE FIRST MEETING OF FY
• SECTION 188 RELATED PARTY TRANSACTIONS
PREPARE LIST OF RELATED PARTIES
PRIOR APPROVAL BY SPECIAL RESOLUTION
• SECTION 2(41) CHANGE IN FINANCIAL YEAR
1ST APRIL TO 31ST MARCH
BEFORE 31ST MARCH 2016
FILING OF FORM MGT 14- RECEIVE FORM DIR 8 AND MBP.1

7. CRITICAL CHANGES
• INCORPORATION STRICTER PROCESS
MORE RESPONSIBILITIES ON
PROESSIONALS
• CERTIFICATE OF INCORPORATION NOT CONCLUSIVE
• SECTION 23, 42, 62 PRIVATE PLACEMENT TIGHTENED
• SECTION 35 LIABILITY OF MISSTATEMENT IN
PRSOPECTUS
ONLY TWO DEFENCES:
A. WITHDRAWAL OF CONSENT BEFORE ISSUE
B. ISSUE WITHOUT CONSENT

8. • SECTION 77 TO 85 CHARGES, CHG-1 & 300 DAYS
• SECTION 88 REGISTER OF ALL SECURITIES
PERMANENT MAINTENANCE
• SECTION 62 FURTHER ISSUE
APPLICABLE ALSO TO PRIVATE CO.
• SECTION 63 BONUS SHARES
DECISION OF BHAGWATI DEV. NULLIFIED
• SECTION 73 TO 76 ACCEPTANCE OF DEPOSIT MADE DIFFICULT
• SECTION 92 ANNUAL RETURN
• SECTION 93 CHANGE IN PROMOTERS’ STAKE
REPORTING BY LISTED COMPANIES
• SECTIION 101 95% CONSENT FOR SHORTER NOTICE
• SECTION 103 QUORUM ON BASIS OF NO. OF MEMBERS 5-30
• SECTION 105 PROXY FOR MAX 50 MEMBERS

9. • SECTION 109 POLL BY
1/10TH MEMBERS OR
SHARES VALUE > RS. 5 LAKHS
• SECTION 110 POSTAL BALLOT UNLISTED CO.
• SECTION 118 SECRETARIAL STANDARDS FOR MINUTES
• SECTION 121 REPORT OF AGM BY LISTED CO. 30 DAYS
• SECTION 123 DIVIDEND WITHOUT TRANSFER TO
RESEREVES
• SECTION 128 MAINTENANCE OF BOOK OF ACCOUNTS
• DEPRECIATION AS PER SCH II – LIFE OF ASSET
• SECTION 130-131 REOPENING OF FINANCIAL STATEMENTS
• SECTION 132 EMPOWERMENT TO NFRA
• SECTION 134 DIRECTORS’ REPORT
MORE DISCLOSURES

10. • SECTION 137 FINANCIALS NOT ADOPTED – PROVISIONAL
P&L OF PVT CO. NOW OPEN FOR PUBLIC
• SECTION 138 BOD MAY APPOINT CS CWAAS INTERNALAUDIT
• SECTION 140 AUDITOR TO GIVE REASON FOR RESIGNATION
• SECTION 141 AUDITOR’S ADDITIONAL DISQUALIFICATIONS
• SECTION 143 FRAUD REPORTING TO AUDITOR
• SECTION 144 AUDITOR NOT TO RENDER OTHER SERVICES
• SECTION 146 AUDITOR MUST ATTEND AGM
• SECTION 148 WOMEN DIRECTOR FOR PUBLIC CO.
PUC 100CR+
TURNOVER 300 CR+

11. • SECTION 160 PERSON OTHER THAN RETIRING DIRECTOR
DEPOSIT RS. 1 LAKH REFUND ON 25% VOTE
• SECTION 161 BAR ON APPOINTMENT AS ADD. DIRECTOR
IF LOST ELECTION IN AGM
ALTERNATE TO ONLY ONE DIRECTOR
• SECTION 164 DISQUALIFICATIONS
• SECTION 167 VACATION- DIRECTORS POSITION
• SECTION 168 DETAILED PROVISION FOR RESIGNATION

12. • SECTION 173 BOARD MEETINGS
7 DAYS NOTICE
MAX GAP 120 DAYS
DRAFT MINUTES IN 7 DAYS
A/C APPROVAL AND DIRECTOR REPORT IN MEETING
VIDEO CONFERENCING PERMITTED
RECORDING TO BE KEPT TILL AUDIT IS OVER
UNATHORISED PERSON BANNED
• NOT BY VIDEO CONFERENCING
A/C APPROVAL
DIRECTORS’ REPORT
PROSPECTUS
RECONSTRUCTION ETC

13. • SECTION 175 NO CIRCULAR RESOLUTION FOR
DECISION ON NEW BUSINESS , JV
CASUAL VACANCY
BUY BACK, INTERNAL AUDITOR
DISCLOSURE OF INTEREST
ACCEPTANCE OF DEPOSITS
SALE INVESTMENT
• SECTION 177 AUDIT COMMITTEE
LISTED COMPANY & PUBLIC CO. WITH
PUC RS. 10 CR +
TO RS 100 CR +
BORROWING RS 50 CR+
NO COMPLUSION ON CM TO ATTEND AGM

14. • SECTION 178 MANDATORY COMMITTEES
- NOMINATION AND REMUNERATION
- STAKEHOLDER RELATIONSHIP
LISTED CO. OR
PUC RS 10 CR+
TURNOVER RS 100 CR +
• VIGIL MECHANISM
MANDATORY FOR LISTED CO. OR DEPOSIT ACCEPTED
OR BANK BORROWINGS RS 50 CR +
DECLARE ON WEBSITE & BAORD REPORT
IMMUNITY TO WHISTLE BLOWER
FRIVOLOUS COMPLAINT TO BE PUNISHED

15. • SECTION 179 NUMBER OF DECISIONS ONLY THROUGH MEETING
INCREASED
• SECTION 181 CHARITY BY SPECIAL RESOLUTION
IF > 5% OF AVG. NET PROFIT 3 YEARS
• SECTION 182 POLITICAL CONTRIBUTION UPTO 7.5%
• SECTION 185 BAN ON LOANS TO DIRECTORS EXCEPT
MD/ WTD (ALSO FOR PVT CO.)
LOAN TO SUBSIDIARY FOR BUSINESS
• SECTION 186 INTERCORPORATE LOANS & INVESTMENT

16. • SECTION 188 RELATED PARTY TRANSACTIONS
INCREASED DISCLOSURE REQUIREMENT
IMMOVABLE PROPERTY RELATED TRANSACTION INCLUDED
GOVT APPROVAL DONE AWAY
RELATED PARTY NOT TO VOTE EVEN AT AGM
BETWEEN TWO PUBLIC CO. IF DIRECTORS HOLD > 2% PUC
EVEN PRESENCE OF DIRECTOR NOT PERMITTED
SPECIFIC MENTION IN NOTICE
SPECIAL RESOLUTION IF
PUC > RS 10 CR
TRANSACTION VALUE > 25 % TURNOVER
TV > 10 % NET WORTH
MONTHLY REMUNERATION > 2.5 LAKHS

17. • SECTION 205 FUNCTIONS OF CS ARE SUBJECTIVE
GUIDE DIRECTOR & BOARD
CONVENE AND ATTEND BM
OBTAIN APPROVALS
REPRESENT BEFORE AUTHORITIES
ASSIST BOARD IN CONDUCT OF BUSINESS
ADVISE FOR GOOD GOVERNANCE
OTHER DUTIES SPECIFIED BY BOARD

18. • SECTION 211-212 SERIOUS FRAUD INVESTGATON OFFICE
• SECTION 228 INVESTIGATION OF FOREIGN CO.
• SECTION 233 MERGER WITH FOREIGN CO.
• SECTION 236 COMPULSORY PURCHASE OF MINORITY
SHAREHOLDING POSSIBLE
• SECTION 245 CLASS ACTION SUIT BY DEPOSITORS
• SECTION 247 VALUATION BY REGD. VALUER
• SECTION 253-269 NEW DEFINITION OF SICK COMPANY
REHABILITATION BY NCLT
• SECTION 381 ACCOUNT OF FOREIGN COMPANIES

19. • SECTION 442 MEDIATION AND CONCILIATION (NEW)
• SECTION 435 SPECIAL COURTS.
• SECTION 436 POWER OF CG TO EXEMPT COMPANIES
SCHEDULES
• SCHEDULE II USEFUL LIFE OF AN ASSET FOR DEPRECIATION
• SCHEDULE IV CODE FOR INDEPENDENT DIRECTORS

20. DEAD CONCEPTS
• STATEMENT IN LIEU OF PROSPECTUS
• OTHER OBJECTS IN MOA
• STATUTORY REPORT AND MEETING
• PAYMENT OF INTEREST OUT OF CAPITAL
• ATTACHING FINANCIAL STATEMENT OF SUBSIDIARY CO.
• GOVT. APPROVAL OR INCREASE IN NO. OF DIRECTORS
• GOVET APPROVAL FOR RELATED PARTY CONTRACTS
• APPROVAL FOR MANAGERIAL REMUNERATION (EXCEPTIONS)
• QUALIFICATION SHARES
• SOLE SELLING AGENTS

21. ChapterXIII
Section 204 and
143(14)
SECRETARIAL
AUDIT

22. APPLICABILITY
TO A COMPANY WHICH IS LISTED
Or
IS A PUBLIC COMPANY WITH T.O. OF 250 CRORES+
Or
IS A PUBLIC COMPANY WITH P.U.C. OF 50 CRORES+
SECTION 134 QULAIFICATIONS TO BE ANSWERED BY DIRECTORS IN
THE REPORT
SECTION143( 14) ABOUT POWERS AND DUITES OF STATUTORY
AUDITOR APPLY TO SECRETARIAL AUDITOR

23. Covers
• CA 2013
• SCRA 1956
• DEPOSITORIES ACT 1996
• FEMA 1999
• SEBI 1992
Board processes
RULES AND REGULATIONS UNDER ABOVE
• LABOUR LAWS, COMPETITION LAWS, ENVIRONMENTAL LAWS
• INDIRECT TAXES ( Not Covered in GN )

24. FIRST CHECK
MEMORANDUM
OF
ASSOCIATION
ARTICLES
OF
ASSOCIATION

25. MEMORANDUM OF
ASSOCIATION
• NAME CORRECT NAME & CHANGES IN COI
COMPLIANCE U/S 187
NATURE (PVT, PUBLIC OR SECTION 8 CO.)
• REGISTERED
OFFICE PLACE OF MAINTAINING BOOKS
• OBJECT BUSINESS ACTIVITIES AS PER OBJECTS
• CAPITAL PUC WITHIN AUTHORISED CAPITAL
• LIABILITY LIMITED OR UNLIMITED

26. ARTICLES OF ASSOCIATION
• POWERS AND AUTHORITIES OF BOARD
• PROVISION RELATED TO GM AND
SHAREHOLDERS
• BORROWING POWERS- LIMITS
• RESTRICTIONS ON ALLOTMENT & TRANSFER IN
PRIVATE CO.
• SUPER MAJORITY CLAUSE

27. SPECIAL RESOLUTIONS
• MEANING AND REQUIREMENT
• VOTES IN FAVOUR SHOULD NOT BE LESS THAN 3
TIMES VOTES CAST AGAINST
• PROPOSED AS SPECIAL RESOLUTION
• NOTICE OF MEETING DULY GIVEN
• EXPLANATORY STATEMENT- DISCLOSURE OF
INTERET

28. APPROVAL BY SPECIAL RESOLUTION
• ENTRENCHMENT
PROVISION IN AOA
• SHIFT RO OUTSIDE LOCAL
LIMITS
• ALTERATION OF MOA
• CHANGE OBJECT OF
UTILIZATION OF MONEY
RAISED FROM PUBLIC
• ALTERATION OF AOA,
CONVERSION OF PUBLIC
INTO PRIVATE AND VICE
VERSA
• VARY TERMS AND OBJECT
OF PRSPECTUS
• ISSUE OF GDR
• VARY RIGHTS OF CLASS
OF SHARES

29. • ISSUE SWEAT EQUITY
SHARES
• TO ISSUE SHARES
UNDER ESOP/ ESOS
• FURTHER ISSUE OF
SHARES
• CONVERSION OF
DEBENTURES/ LOAN
INTO SHARES
• REDUCTION OF SHARE
CAPITAL
• PURCHASE OF SECURITIES
OF ITS OWN CO.
• ISSUE OF CONVERTIBLE
DEBENTURES
• REMOVE AUDITOR BEFORE
EXPIRY OF HIS TERM
• MAINTAIN REGISTERS AND
COPIES OF ANNUAL
RETURN PLACE OTHER
THAN RO
• APPOINT MORE THAN 15
DIRECTORS

30. • TO REAPPOINT INDEPENDENT
DIRECTOR AFTER EXPIRY OF HIS
TERM OF 5 YEARS
• TO REDUCE NO. OF
DIRECTORSHIP FOR DIRECTOR
• EXERCISE POWER OF BOARD
WITH CONSENT OF COMPANY
• LOAN TO MD AND/ OR WTD
• LOAN / GUARANTEE EXCEEDING
60% (PUC+FR+SECURITIES
PREMIUM)
OR
100% (FR+SP)
• TO ENTER INTO CONTRACT
WITH RELATED PARTY
• APPOINT A PERSON > 70
YEARS AS MD/ WTD/ MGR
• DETERMINE REMUNERATION
TO DIRECTORS
• INVESTIGATE AFFAIRS OF CO.
• INVESTIGATION OF AFFAIRS BY
SFIO
• STRIKING OFF NAME

31. • APPROVE SCHEME OF
AMALGAMATION
• WINDING UP BY TRIBUNAL
• VOLUNTARY WINDING UP
• GRANT AUTHORITY TO
LIQUIDATOR FOR WINDING
UP
• ENTER INTO
ARRANGEMENT WITH
CREDITORS
• GRANT POWER TO CO.
LIQUIDATOR
• DISPOSING BOOKS &
PAPERS AT TIME OF
DISSOLUTION
• ADOPT TABLE F IN SCH I

32. CENTRAL GOVERNMENT APPROVAL
• SEC 4(3) REGISTRING A COMPANY WITH A NAME
RESTRICTED
• SEC 8(4) (I) ALTERATION OF MOA / AOA OF SECTION 8
COMPANY U/S
• SHIFTING OF RO FROM ONE STATE TO ANOTHER
• SEC 140 (1) REMOVAL OF AN AUDITOR BEFORE EXPIRY OF
TERM
• SEC 196(4) APPOINTMENT OF MD/ WTC/ MANAGER NOT AS
PER SCH V

33. • SEC 197(1) MANAGERIAL REMUNERATION > 11 %
• IN CERTAIN CASES
• SEC 210-213 INVESTIGATION BY INSPECTOR
• SEC 239 DISPOSAL OF BOOKS & PAPERS BY
AMALGAMATED CO.
• SEC 272(4) WINDING UP PETITION BY REGISTRAR

34. SHARE CAPITAL

35. SEC 52- ISSUEAT
PREMIUM
• TRANSFER OF
AMOUNT TO
SECURITIES
PREMIUM A/C
• UTILIZATION FOR
THE PURPOSE
MENTIONED IN
THE SECTION
SEC 62- FUTHER
ISSUE
• NOTICE FOR OFFER OF
RIGHT SHARES
WHETHER DULY SENT
• EXERCISE WITHIN 30
DAYS

36. SEC 68- BUY BACK
• SOURCE FREE RESERVES
SECURITIES PREMIUM A/C
PROCEED OF SHARES/ SECURITIES
• OTHER
COMPLIANCES VALUATION OF SHARES
LIMITS- 10% OR 25%
PROPER AUTHORITY
DEBT EQUITY RATIO NOT > 2:1
NO BUY BACK U/S 70
• CHANGE IN AUTHORISED, SUBSCRIBED & PAID UP CAPITAL
• CERTIFICATE FROM AUDITOR ABOUT SOLVENCY

37. SEC 66- REDUCTION IN CAPITAL
• CHECK WHETHER ANY ARREARS IN REPAYMENT OF
DEPOSITS OR INTEREST THEREON
• VARIOUS WAYS OF REDUCTION
• EFFECT OF REDUCTION ON LIABILITY OF MEMBERS/
CREDITORS
• AUTHORITY FOR REDUCTION – MEMBERS AND
CONFIRMATION OF TRIBUNAL

38. SEC 63- BONUS SHARES
• ELIGIBILTY OF COMPANY
• WITHIN LIMITS OF AUTHORISED CAPITAL
• EFFECT OF BONUS SHARES ON PAID UP CAPITAL
• RELEVANT ACCOUNTING ENTRY FOR REDUCING THE
RESERVE AND INCREASING THE PUC
• NO BONUS ISSUE BY CAPITALIZING RESERVE CREATED OUT
OF REVALUATION OF ASSETS

39. FORFEITURE OF SHARES
• CREATION OF CAPITAL REDEMPTION RESERVE
• VALUATION OF SHARES FOR RE-ISSUE
• CRITICAL ISSUES:
WHETHER CRR NECESSARY IF FORFEITED SHARES NOT
REISSUED?
AFFECT ON PAID UP CAPITAL AFTER RE-ISSUE?

40. SEC 39- ALLOTMENT OF
SECURITIES
• WHETHER SHARE APPLICATION MONEY
RECEIVED
• AMOUNT PAYABLE ON SUBSCRIPTION NOT LESS
THAN 5% NOMINAL VALUE
• RETURN OF APPLICATION MONEY IF MIN
SUBSCRIPTION NOT RECEIVED WITHIN 30 DAYS
FROM ISSUE OF PROSPECTUS

41. LOANS AND INVESTMENTS

42. No Company shall directly/
indirectly
• MAKE LOAN TO ANY OTHER BODY COPORATE
• GIVE GUARANTEE/ PROVIDE SECURITY IN CONNECTION WITH
LOAN MADE
BY ANY OTHER PERSON TO
OR
TO ANY OTHER PERSON BY ANY BODY COPORATE
• ACQUIRE BY SUSCRIPTION/ PURCHASE OR OTHERWISE
SECURITIES OF ANY OTHER BODY CORPORATE.

43. • COMPLIANCE OF REQUIREMENT UNDER SETION 186
• COMPLIANCE OF SECTION 185
• LIMITS OF SECTION 186 :
60% (PUC+FR+ SECURITIES PREMIUM A/C)
OR
100% (FR+SECURITIES PREMIUM A/C)

44. SECTION 123 DIVIDEND
• DIVIDEND ONLY OUT OF FREE RESERVES
• TIME LIMIT FOR TRANSFER TO SEPARATE BANK
ACCOUNT AND PAYMENT
• ONLY AFTER PROVIDING FOR DEPRECIATION
• DIVIDEND NOT OUT OF ANY OTHER RESERVES OR
PROFIT PRIOR TO INCORPORATION OR
SECURITIES PREMIUM A/C

45. • INTERIM DIVIDEND, IF DECLARED IS PAYABLE
OUT OF PROFIT FOR THE PERIOD
• DIVIDEND ON EQUITY SHARES WITH
DIFFERENTIAL RIGHTS
• DISCLOSURE OF UNPAID DIVIDEND ACCOUNT
BALANCE SHEET
ANNUAL REPORT
• CLAIM TO DIVIDEND TRANSFERRED TO
INVESTOR EDUCATION AND PROTECTION
FUND.

46. DEPOSITS

47. SECTION 73 AND 74
• WITHIN LIMITS PRESCRIBED
• REPAYMENT WITHIN 1 YEAR FROM
COMMENCEMENT OF ACT
• RULE 10 FILING OF RETURN
• AUDITOR CERTIFCATION OF NON COMPLIANCE IS
PRIMA FACIE EVIDENCE FOR FRAMING A CHARGE
• CREDIT RATING, INSURANCE, DEPOSIT TRUSTEES

48. MANAGERIAL REMUNERATION

49. • APPLICABILITY TO PRIVATE COMPANY
• WHETHER REMUNERATION IS WITHIN LIMITS
• MAXIMUM LIMIT 11% EXCLUSIVE OF SITTING FEES
• LIMIT ON REMUNERATION TO NON EXECUTIVE DIRECTOR
• INADEQUATE/ NO PROFIT- PART II OF SCHEDULE V

50. SIGNING OF BALANCE SHEET
• DATE OF SIGNING?
• WHO CAN SIGN?
• NUMBER OF DIRECTORS WHO CAN SIGN?
• WHEN DO THEY SIGN?

51. CONSTITUTION OF BOARD OF
DIRECTORS
• DULY APPOINTED IN BOARD/ GENERAL MEETING
• HAS OBTAINED DIN PRIOR TO APPOINTMENT
• NOT DISQUALIFIED UNDER SEC 164- VACATION U/S 167
• NOT DISQUALIFIED UNDER ADDITIONAL CONDITION OF AOA
• DECLARATION ABOUT NO DISQUALIFICATION AND DIN

52. • ADDITIONAL DIRECTORS, ALTERNATE
DIRECTORS AND NOMINEE DIRECTORS ARE
APPOINTED IN ACCORDANCE WITH SEC 161
• REGULARIZATION OF ADDITIONAL DIRECTOR IN
AGM
• MAXIMUM DIRECTORSHIP 20 COMPANIES OUT OF
WHICH MAXIMUM 10 PUBLIC COMPANIES

53. INTEREST OF DIRECTORS
• AS-18 DISCLOSURES
• SECTION 184 AND 189
• TRANSACTIONS PURCHASE / SALE OF GOODS
PURCHASE/ SALE OF FIXED ASSETS
SERVICES
AGENCY ARRANGEMENT
LEASE/ HIRE
TRANSFER OF R&D
LICENSE AGREEMENT FOR FINANCE
GUARANTEE/ COLLATERALS
MANAGEMENT CONTRACTS

54. RELATED PARTY AND RELATIONSHIP
• HOLDING COMPANY
• SUBSIDIARIES
• ASSOCIATES
• KEY MANAGERIAL PERSONNEL
• RELATIVES OF KMP

55. RELATED PARTY COMPLIANCE
• TRANSACTIONS
UNSECURED LOANS
CONTRACTS
ALLOTMENT OF SHARES /CONVERTIBLE SECURITIES
•AMOUNT INVOLVED IN TRANSACTION
•MAINTENANCE OF REGISTER
•NEW CONTRACTS DURING THE YEAR

56. TERMS OF CONTRACT
• RATE OF INTEREST
• REGULAR PAYMENT OF PRINCIPAL AND INTEREST
• VALUATION IN CASE OF ALLOTMENT
• REGISTER OPEN DURING AGM
• WHETHER ANY T&C PREJUDICIAL TO INTEREST OF THE
COMPANY

57. SECURITY OR CHARGE
• COMPLIANCE UNDER SECTION 2(16), SEC 77-87
• CERTIFICATE OF CHARGE BY ROC
• ENTRY IN REGISTER OF CHARGES

58. COMPOUNDING OF OFFENCES
• OFFENCES PUNISHABLE WITH FINE ONLY
• COMPOUNDABLE WITH PERMISSION OF SPECIAL COURT
IMPRISONMENT OR FINE
IMPRISONMENT OR FINE OR BOTH
• COMPOUNDING AUTHORITY DEPENDS ON QUANTUM OF
PENALTY- REGIONAL DIRECTOR OR TRIBUNAL
• COOLING PERIOD 3 YEARS

59. CERTIFYING THE ANNUAL
RETURN
COMPANIES ACT, 2013
SECTION 92
RULE 11 OF COMPANIES (MANAGEMENT
AND ADMINISTRATION ) RULES, 2014

60. REQUIREMENTS OF THE
ANNUAL RETURN
• Form MGT-7 NEW FORMAT
The company's Registered Office, principle business activities,
particulars of its holding, subsidiary and associate companies;
Its shares, debentures and other securities and shareholding
pattern;
Its indebtedness
Its members and debenture holders along with changes therein
since the close of the previous financial year;
Its promoters, directors, key managerial personnel along with
changes therein since the close of the previous financial year;

61. Continued..
Meetings of members or a class thereof, Board and its various
committees along with attendance details;
Remuneration of directors and key managerial personnel;
Penalty or punishment imposed and details of compounding of
offences and appeals made against such penalty or punishment;
Matters relating to certification of compliances, disclosures as may
be prescribed;
Details, as may be prescribed, in respect of shares held by or on
behalf of the Foreign Institutional Investors
Such other matters as may be prescribed.

62. When is the return required to
be made ?
Rule 11 of Companies (Management and
Administration) Rules, 2014 says, the
Annual Return should be made at the
close of every Financial Year.
 To be filed :
Within 60 days from the date of AGM or
Within 60 days from the date on which the
AGM should have been held

63. CERTIFICATION
• A Company Secretary is to certify the correctness
and accuracy of the information stated in the
Annual Return.
• This certificate in Form no. MGT- 8.

64. EXTRACT OF ANNUAL
RETURN
 An extract of the Annual Return,
in Form MGT- 9 is to be attached
to and forms a part of the Board's
Report

65. CRITICALISSUES WHILE CERTIFYING
THE ANNUAL RETURN
 Going about the critical issues while making Form no. MGT-7,
one might come across the following issues:
• The sub-category of a company has to be identified in the
annual return. The sub-categories are:
Small company
 One Person Company
 Subsidiary of Foreign Company
 NBFC
Guarantee Company
 Unlimited Company, etc.

66. More issues..
• Indebtedness of the company has been systematically
categorized into Secured Loans, Unsecured Loans and
Deposits in the new Form and hence the information has
to be written likewise.
• Details about and Changes in the designations of
Directors, Promoters, Key Managerial Personnel are to be
given in the annual return.
• Details of Directorships of a Director in other companies
and changes therein have to be given.

67. • The details of meetings such as AGM, EOGM,
Class Meetings, NCLT/Court ordered meetings,
Requisitioned Meetings have to be disclosed in
the return.
• Directors and Key Managerial Personnel may be
reluctant to disclose the details, which the
Annual Return, i.e. Form MGT-7 requires to be
filled in.

68. EXCEPTIONS TO
CERTIFICATION
• For all companies, the Annual Return shall be
signed by a Director and the company secretary
or where there is no company secretary, by a
PCS.
EXCEPTIONS: One Person Companies and Small
companies. If an OPC or a Small Company does
not have a company secretary, a director of such
company shall sign the Annual Return.

69. THRESHOLDS
FOR LISTED COMPANIES
• Paid Up Capital : Rs. 10 Crores or more
• Turnover: Rs. 50 Crores or more
• Certification by : Practicing CS.

70. MOST CRITICAL ISSUES
• Non- filing of any event based forms, if not filed, needs
to be reported in the Annual Return.
• Form MGT - 8 – Point no. B lists out certain specific
provisions of the Companies Act 2013 & Rules there
under about which PCS has to report. This is not in tune
with the corresponding section 92(2) of the Act which
requires certification by PCS certifying inter alia ,
whether the Company has complied with “all the
provisions of the Act”.

71. • Form MGT-7 – Point XV (3) states “Disclosure of
Directors: All directors have furnished Notices in “Form
12.1” but there is no such Form 12.1 .
• Form MGT-7 – signing of AR by PCS as contemplated by
section 92(1) is at the end of various certificates as listed
(a) to (i). Does it not mean Certification & not merely
signing of AR?

72. SIGNING VS. CERTIFICATION
 MAJOR DIFFERENCE:
• Mere signing doesn’t impose a liability on the person who
signs, as was decided in Kashinath vs New Akoy Ginning and
pressing Co. Ltd.
WHEREAS
• Certification shows that the person has authenticated the
document, verified it and is therefore taking the responsibility
and liability upon himself.

73. SMALL COMPANY
• Small Company
 PAID UP CAPITAL : Should not exceed Rs. 50 Lakhs
 TURNOVER : Should not be more than Rs. 2 Crores
• Exceptions:
 a holding and a subsidiary company
 a company registered under section 8
 a company or body corporate governed by any special
Act.

74. ISSUE:SIGNINGTHE ANNUALRETURNOF A
SMALLCOMPANY
• While signing the Annual Return it is
important to decide whether the company
is a small company or not.
• If the paid up capital of a company is less
than Rs. 50 Lakhs but the turnover is more
than Rs. 2 Crores, it shall be called as a
Small Company.

75. PENALTIES
• Non-compliance of the provisions of Section 92 of this Act
shall imply the following Penal actions:
ENTITY PENALTY
COMPANY Fine (Rs. 50,000/- to Rs. 5,00,000/-)
OFFICER Imprisonment (6 months) or Fine (Rs.
25,000/- to Rs. 5,00,000) or both
PCS Fine (Rs. 50,000/- to Rs.
5,00,000/-)

76. CONCLUSION
To conclude:
• Penalty has been substantially increased by
the new Act.
• Scope of verification by practicing Secretary is
enlarged as he has to confirm compliance of
provisions of the companies Act besides the
correctness of contents of Annual Return.

77. AND HENCE..
The professional certifying the
annual return must do the same,
with utmost caution lest the penal
provisions as mentioned below
should be attracted.

78. ANY QUERIES?

79. DHANYAWAAD!