Contents of Annual Report

Contents of Annual Return

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Contents of Annual Return

An annual return is a document that contains details of a company’s share capital, indebtedness, directors, shareholders, changes in dictatorships, corporate governance disclosures etc. The regulations of the Companies Act, 2013 specifies that every company must prepare and file annual return with the registrar each financial year before the 29th of November. In this article, we look at the information filed by company in its annual return in detail.

Authorized Signatories

An annual return should have the authorized digital signature of a director and the company secretary. In the absence of a company secretary, a company secretary in practice can fulfill this responsibility. If the particular firm is a one-person company or small company, the annual return can be signed by a director only.

Annual Return Forms

  1. Annual returns must be filed in Form MGT-7 within 60 days from the date of Annual General Meeting (AGM).
  2. Annual Returns of listed companies and companies having a paid-up share capital of Rs 10 crores or more must be certified by a company secretary in practice in Form MGT 8.
  3. Every foreign company must file their annual returns in Form FC-4 within a period of 60 days from the last day of its financial year.
  4. All the companies must prepare the extract of Annual Return in Form MGT-9.

Contents of Annual Return

A company’s annual return must contain the following details:

  1. Details of registration
  2. Particulars of the company’s registered office
  3. Principal business activities pursued by the company
  4. Particulars of Holding, Subsidiary and Associate Companies
  5. Particulars of the shares, debentures and other securities of the company
  6. Particulars of turnover and net worth of the company
  7. Details of shareholding pattern.
  8. Indebtedness
  9. Details of members, debenture holders and other securities holder
  10. Details of shares/Debenture transfers of the particular financial year
  11. Particulars of promoters
  12. Particulars of directors
  13. Particulars Key Managerial Personnel
  14. Details of meetings of members/class of members/Board/Committees of the Board of Directors
  15. Remuneration of directors
  16. Remuneration of Key Managerial Personnel
  17. Details on penalties/punishment/compounding of offences on company, directors and other officers in default
  18. Details of matters pertaining to certification of compliances and disclosure
  19. Details in respect of shares held by or on behalf of the Foreign Institutional Investor (FII)
  20. Details of other pertinent disclosures

Since we now know the gist of the contents, let us have in-depth examination of the details that must be included in the above-mentioned contents.

Details of Registration

  • Registration number of the company
  • Corporate Identity Number (CIN)
  • Foreign company registration number/ Global Location Number (GLN)
  • Category of the company
  • Sub-category of the company
  • Names of stock exchanges where the shares are listed
  • Whether or not the AGM was held in the particular year. If it was held, the date or due date of AGM. If it wasn’t held, the reason for not organizing the same.

Particulars of the Company’s Registered Office

  • Name of the company
  • Complete address of the company
  • Telephone and fax numbers
  • E-mail address and website of the company, if any
  • Name of the police station situated in the jurisdiction of the company
  • Address for correspondence
  • Address of the principal place of business in the country (if it is a foreign company)
  • Name and address of the Registrar and Transfer agents

Principal Business Activities Pursued by the Company

Specification of the business activities that contributes to 10% or more of the company’s turnover.

Particulars of Holding, Subsidiary and Associate Companies

Name and address of each of the companies, along with the following details:

  • Corporate identity number/Global location number
  • Nature of relationship (holding, subsidiary or Associate company)
  • Percentage holding and applicable section

Particulars of Shares, Debentures and other Securities of the Company

  • Capital structure of the company.
  • Upward or downward change in the authorized, issued, subscribed, paid-up for equity shares, preference shares,
    unclassified shares, and debentures.
  • Details of stock split/ consolidation during the year.
  • Number of shares, nominal value per share and total amount of capital.
  • Total quantity of fully convertible, partly convertible and non-convertible debentures issued and outstanding as on date of concerned Annual General Meeting of the Company.
  • Details of other securities.
  • Details of securities premium account along with changes, if any, during the particular year.

Particulars of Turnover and Net Worth of the Company

This section is self explanatory, as the title covers the details to be included i.e. details of the company’s turnover and its net worth should be mentioned. These details are sufficient and other details needn’t be mentioned.

Details of Share Holding Pattern

This part of the return relates to the breakup of equity share capital as percentage of total equity. The specified details must be in connection with category-wise shareholding, which includes:

  • Promoters
  • Public shareholding
  • Custodian for GDR’s and ADR’s
  • Shareholding of promoters
  • Change in promoter’s shareholding
  • Shareholding pattern of top ten shareholders, except that of Directors, Promoters and Holders of GDR and ADR
  • Shareholding of Directors and Key managerial personnel
  • Shares held in physical from and demat form for each of the categories mentioned above.

Indebtedness

  • Secured loans other than deposits.
  • Unsecured loans.
  • Deposits.
  • Total indebtedness at the beginning of the financial year, changes during the financial year and indebtedness at the end of the financial year.

Details of Members, Debenture Holders and other Securities Holder

  • Ledger folio
  • Name
  • Type of share, debenture or other security
  • Number of shares
  • Date of becoming a member/debenture holder/other security holder
  • Address

Furthermore, the company needs to provide the following details without share capital:

  • Total number of members at the date of incorporation/end of financial year
  • Number of persons who have joined as a member since incorporation/end of previous financial year
  • Number of persons who have relinquished their membership since incorporation/end of previous financial year
  • Number of members as on the end of financial year

Details of Shares/Debenture Transfer Since the end of the Previous Financial Year.

  • The closing date of previous financial year
  • The date of registration for share transfer
  • Type of security
  • Name of the transferor
  • Number of shares/debentures
  • Ledger folio of transferor
  • Name of transferee
  • Ledger folio of transferee

Particulars of Promoters

  • Designation of the person
  • Category (He/She can be categorized as independent, Nominee, Alternative Executive Director or non-executive director)
  • Total number of promoters

Particulars of Directors

  • Composition of Board of Directors
  • Category-wise number of directors at the beginning of the year and percentage of total number of director
  • Category-wise number of the directors at the end of the year and percentage of total number of directors

With particular reference to individual directors:

  • Director Identification Number (DIN)
  • Full name
  • Name of the father, mother or spouse
  • Nationality
  • Date of Birth
  • Designation
  • Category
  • Occupation
  • E-mail ID
  • Number of equity shares held
  • Date of appointment
  • Date of relinquishing the position
  • Residential address
  • Details of directorial role performed in other companies and the pertinent changes

Particulars of Key Managerial Personnel

If the concerned person holds the position of a Managing Director/CEO/manager/Whole-time Director:

  • DIN/ PAN/ UIN/ Passport No
  • Name of the person.
  • Name of the father, mother or spouse
  • Nationality
  • Date of Birth
  • Designation
  • Date of appointment
  • Date of relinquishing the position
  • Residential address of the person

If the concerned person holds the position of a company secretary:

  • PAN/UIN/Passport number
  • Name of the person
  • Nationality
  • Date of Birth
  • Designation
  • Membership number
  • Date of appointment
  • Date of relinquishing the position
  • Residential address of the person

If the concerned person holds the position of a Chief Financial Officer:

  • DIN/ PAN/ UIN/ Passport No
  • Name of the person.
  • Name of the father, mother or spouse
  • Nationality
  • Date of Birth
  • Designation
  • Date of appointment
  • Date of relinquishing the position
  • Residential address of the person

Details of meetings of members/class of members/Board/Committees of the Board of Directors

Details of Members/class/requisitioned/NCLT/Court Convened Meetings:

  • Types of meeting
  • Date of meeting
  • Total number of members authorized to attend the meeting
  • Number of members participated with percentage of total shareholding

Details of Board Meeting

  • Date of meeting
  • Total number of directors as on the date of meeting
  • Number of directors participated
  • Percentage of attendance

Details of Committee Meeting

  • Number of committees
  • Name of committee
  • Date of meeting
  • Total number of committee members
  • Number of members participated
  • Percentage of attendance

Participation of Directors at Board and Committee Meetings

  • Name of the Director
  • Number of meetings conducted
  • Number of meetings participated by each director
  • Percentage of attendance
  • Participation in the previous AGM

Remuneration of Directors

Particulars of remuneration paid to Managing Director, Whole Time-director or manager:

  • Name of MD/WTD/Manager
  • Gross Salary
  • Stock Option
  • Sweat Equity
  • Commission
  • Others

Particulars of remuneration paid to Independent Director:

  • Fee for participating in board committee meetings
  • Commission
  • Others

Particulars of remuneration paid to Key Managerial Personnel other than MD/Manager/WTD

  • Gross Salary
  • Stock Option
  • Sweat Equity
  • Commission
  • Others

Details on penalties/punishment/compounding of offences on company, directors and other officers in default

Details of the fees penalized with; accompanied with the following details:

  • Section of the companies Act under which penalties were imposed
  • Brief description
  • The name of the penalizing authourity
  • Details of appeals made, if any

Details of Matters Pertaining to Certification of Compliances and Disclosure

  • Details of events/matters owing to which the company was liable to file returns or comply with the required provisions of the Companies Act and the pertinent rules.
  • Due date of filing compliance
  • The date in which compliance was filed
  • Concerned authority
  • Reasons for delay, if any

Details in respect of shares held by or on behalf of the Foreign Institutional Investor (FII)

This section is self explanatory, as the title covers the details to be included i.e. details in respect of shares held by on or behalf of the FII. These details are sufficient and no additional details are required.

Other Vital Disclosures

  • Closure of Register of Members, Debenture Holders or Other security holders
  • Declaration of dividend
  • Delisting of shares/securities, if any
  • Change in nominal value of shares, sub-division and consolidation
  • Particulars of inter-corporate loans and investment
  • Contracts or arrangements that the directors are interested in/ related party transactions
  • Details of resolution passed in postal ballots
  • Corporate social responsibility (CSR)
  • Investments made in CSR in the particular financial year
  • Amount spent as percentage of the average net profits of the company made during the financial years immediately preceding the current financial year
  • The limits specified in Section  186(2) and 180(1)(c) of the Companies Act
  • Disclosure of directors
  • Appointment and Re-appointment of chartered accountants as the auditors of the company.

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