Whether MGT-9 required to attach with Directors Report? Series 495
SHORT NOTE:
Whether MGT-9 required to attach with
Directors Report?
This Editorial is updated till 29th August, 2019.
In this editorial auditor shall discuss the few
questions in relating to Directors Report:
I.
Whether Companies need to attach MGT-9 with
Directors Report for F.Y. ending 31.03.2019?
II.
Whether Companies are required to publish
Annual Return on its Website?
III. Practically annual Return prepare after AGM
and Directors’ Report prepare before AGM. Therefore, How to publish give link
of publication of MGT-7 in Directors Report?
IV. Whether Companies are required to prepare both
MGT-9 and need to publish MGT-7 on its website.
A. Whether Companies need
to attach MGT-9 with Directors Report for F.Y. ending 31.03.2019?
As per CA, 2013 section 134, Companies are required to
prepare MGT-9 extract of Annual Return and such MGT-9 was required to file with
Directors Report.
As per Section 134,
extract of Law:-
There shall be attached to statements laid before a company
in general meeting, a report by its Board of Directors, which shall include—
“the extract of the annual return as
provided under sub-section (3) of section 92. Section 92(3) an extract of the annual return in MGT-9 shall
form part of the Board's report”
Note:- The
provision of Section 134(3) has been amended by CAA, 2017 w.e.f. 31.7.2018 i.e.
as per notification dated 31st July, 2017 provision in relation to MGT-9 has
been removed from Section 134 and a new provision I added i.e. “the web
address, if any, where annual return referred to in sub-section (3) of section
92 has been placed.
However, same has not been amended in
Section 92(3) i.e. an extract of the annual return in MGT-9 shall form
part of the Board's report.
One can
clearly opine that as provision of MGT-9 is still forming part of Section 92(3).
Therefore, it is mandatory to prepare MGT-9 and annex same with Directors’
Report as annexure for f.y. ended 31.03.2019.
B.
Whether Companies are required to publish Annual Return on
its Website?
As per CA, 2013 section 134, Companies are required to give
in directors report the web address, if any, where annual return referred to in
sub-section (3) of section 92 has been placed.
As per Section 134,
extract of Law:-
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”.
Note:- The
provision of Section 134(3) has been amended by CAA, 2017 w.e.f. 31.7.2018 i.e.
as per notification dated 31st July, 2017 i.e. “the web address, if any, where
annual return referred to in sub-section (3) of section 92 has been placed.
One can opine that, as per Section
134(3) specifically mentioned that if a Company having website then such
Company mandatorily required to publish its Annual Return i.e. MGT-7 on website
of the Company.
We have to be very clear that, on
website of Company it is required to publish Annual return i.e. MGT-7.
MGT-9 is not required to
publish on the website of the Company.
As per CA, 2013 section 134, Companies are required to give
in directors report the web address, if any, where annual return referred to in
sub-section (3) of section 92 has been placed.
Note:-
·
Directors report prepare in Board Meeting
held before AGM.
·
Director’s report circulated to Members of
Company along with notice of AGM.
·
Annual return prepared after holding of
AGM. Because company have to show presence of directors in AGM or not.
One
school of thought: In such Case Company will give a link in its Directors
Report where MGT-7 Annual return of Company shall be published after AGM.
Therefore, one can opine
that company will give blank link in Directors Report while mentioning that
once company shall be finalized Annual Return, such shall be available on this
link.
D.
Whether Companies are required to prepare both MGT-9 and
need to publish MGT-7 on its website.
This is confusion in corporate and professionals that whether
company have to comply with both i.e. publication of Annual Return i.e. MGT-7
on website and annex MGT-9 in Directors Report.
As per Section 134,
extract of Law:-
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”.
As per Section 92,
extract of Law:-
An extract
of the annual return in MGT-9 shall form part of the Board's report
Note: - Company
has to comply with both the Section i.e. Section 134 and Section 92.
One can opine that, to compliance both
the Sections i.e. 134 & 92
i.
Every Company shall prepare MGT-9 and annex
same with Directors Report.
ii.
If Company having website, its need to
publish Annual Return i.e. MGT-7 on its website and need to give link of the same
in its Directors Report.
Therefore, Company has to
comply with both the requirements.
(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES
Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com)
Disclaimer: The entire
contents of this document have been prepared on the basis of relevant
provisions and as per the information existing at the time of the preparation.
Although care has been taken to ensure the accuracy, completeness and
reliability of the information provided, I assume no responsibility therefore.
Users of this information are expected to refer to the relevant existing
provisions of applicable Laws. The user of the information agrees that the
information is not a professional advice and is subject to change without
notice. I assume no responsibility for the consequences of use of such
information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,
SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH
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author does not intend to solicit any business or profession.
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