According to Section 92(2) discussed earlier here, the annual return, 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.
According to Rule 11(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 MGT – 8.
In this certificate company secretary at first certify that company secretary has examined the registers, records, and books and papers of the company. This self certificate of examination is important because at any stage company may not deny this fact and admissible under any proceeding related to fraud and misrepresentation as well as class action suits.
Please note, certification of annual return is subject to opinion and information of company secretary and examination carried out by company secretary, its officer and agents. The information shall always be obtained by some source of information and may have some background documentation. Opinion shall be a reasonable opinion made by a prudent person. The examination may be carried out by officers and agents of company secretary.
Correctness and adequacy:
Para A of this certificate states, “this certificate is the Annual Return states the facts as at the close of the aforesaid financial year correctly and adequately.”
Para A require a company secretary to check all facts stated in Annual Return from record for correctness and adequately.
This part requires a certificate that during financial year Company has complied with provisions of the Act & Rules made there under in respect of certain aspects. This limits responsibility of company secretary only to listed regulation only. The qualification, reservation or adverse remarks; if any, may be stated at the relevant place. This certificates deals with following aspects only.
- Compliance related to status of the company under the Act;
- Compliance related to maintenance of registers/records & making entries therein within the time prescribed therefor;
- Compliance related to filing of forms and returns as stated in the annual return, with the Registrar of Companies, Regional Director, Central Government, the Tribunal, Court or other authorities within/beyond the prescribed time;
- Compliance related to calling/ convening/ holding meetings of Board of Directors or its committees, if any, and the meetings of the members of the company on due dates as stated in the annual return in respect of which meetings, proper notices were given and the proceedings including the circular resolutions and resolutions passed by postal ballot, if any, have been properly recorded in the Minute Book/registers maintained for the purpose and the same have been signed;
- Compliance related to closure of Register of Members / Security holders, as the case may be.
- Compliance related to advances/loans to its directors and/or persons or firms or companies referred in section 185 of the Act;
- Compliance related to contracts/arrangements with related parties as specified in section 188 of the Act;
- Compliance related to issue or allotment or transfer or transmission or buy back of securities/ redemption of preference shares or debentures/ alteration or reduction of share capital/ conversion of shares/ securities and issue of security certificates in all instances;
- Compliance related to keeping in abeyance the rights to dividend, rights shares and bonus shares pending registration of transfer of shares in compliance with the provisions of the Act
- Compliance related to declaration/ payment of dividend; transfer of unpaid/ unclaimed dividend/other amounts as applicable to the Investor Education and Protection Fund in accordance with section 125 of the Act;
- Compliance related to signing of audited financial statement as per the provisions of section 134 of the Act and report of directors is as per sub – sections (3), (4) and (5) thereof;
- Compliance related to constitution/ appointment/ re-appointments/ retirement/ filling up casual vacancies/ disclosures of the Directors, Key Managerial Personnel and the remuneration paid to them;
- Compliance related to appointment/ reappointment/ filling up casual vacancies of auditors as per the provisions of section 139 of the Act;
- Compliance related to approvals required to be taken from the Central Government, Tribunal, Regional Director, Registrar, Court or such other authorities under the various provisions of the Act;
- Compliance related to acceptance/ renewal/ repayment of deposits;
- Compliance related to borrowings from its directors, members, public financial institutions, banks and others and creation/ modification/ satisfaction of charges in that respect, wherever applicable;
- Compliance related to loans and investments or guarantees given or providing of securities to other bodies corporate or persons falling under the provisions of section 186 of the Act ;
- Compliance related to alteration of the provisions of the Memorandum and/ or Articles of Association of the Company.
We will discuss all these points in details in future post from certification point of view. However, all these points have already been discussed earlier.
Please note: I welcome your comments and feedback. This blog post is not a professional advice but just a knowledge sharing initiative.