Guidance Note on AOC-4 intends to explain various features relating Guidance Note on AOC-4 to financial statements under the Companies Act, 2013. MCA form AOC 4 is for filing the company’s financial statement for every financial year with the Registrar of Companies. The company is responsible for duly furnishing the form within 30 days of its Annual General Meeting. It is intended to guide the professionals in filling, filing and certifying the Form AOC-4. Financial Statements of a company includes Balance Sheet, Profit and Loss Account, Cash Flow statement (if applicable), statement of change in equity (if applicable) and any explanatory notes annexed to the financial statements.
Introduction: Guidance Note on AOC-4
Financial Statements are formal record of the financial operations and financial position of the Company. Financial statements are the heart and soul of Company’s annual report. While financial statements do not provide answers, they provide information of great significance to the stakeholders. It gives a broad financial picture of the affairs of the company during the financial year.
Mandatory disclosure through financial statement including Auditor’s Report and Board’s Report is a method of providing information to the shareholders and the public about the financial position and activities of the company so as to enable its members to exercise a more intelligent and purposeful control thereon.
It is mandatory for the Board of Directors of every company to present financial statement (annual report) to the shareholders along with its report i.e. Board’s Report. Financial statement prepared, presented and filed annually is the most important means of communication by the Board of Directors of a company with its shareholders.
As per section 137(1) of the Companies Act, 2013, every Company is required to file with the Registrar a copy of its financial statements, including consolidated financial statement, if any, along with all the documents which are required to be or attached to such
financial statements under this Act, duly adopted at the annual general meeting of the company within thirty days of such AGM. Section 403 prescribes the manner, fees or additional fees in this respect.
This Guidance Note intends to explain various features relating Guidance Note on AOC-4
to financial statements under the Companies Act, 2013. It is intended to guide the professionals in filling, filing and certifying the Form AOC-4. Financial Statements of a company includes Balance Sheet, Profit and Loss Account, Cash Flow statement (if applicable), statement of change in equity (if applicable) and any explanatory notes annexed to the financial statements.
Definitions
(i) “Accounting Standards” means the standards of accounting or any addendum thereto for companies or class of companies referred to in section 133. [Section 2(2)].
(ii) “Associate Company”, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the
company having such influence and includes a joint venture company. [Section 2 (6)].
Explanation.—For the purposes of this clause, “significant influence” means control of at least twenty percent of total share capital, or of business decisions under an agreement.
(iii) “auditing standards” means the standards of auditing or any addendum thereto for companies or class of companies referred to in sub-section (10) of section 143. [Section 2(7)]
(iv) “authorised capital” or “nominal capital” means such capital as is authorised by the memorandum of a company to be the maximum amount of share capital of the company.
[Section 2 (8)]
(v) “book and paper” and “book or paper” include books of account, deeds, vouchers, writings, documents, minutes and registers maintained on paper or in electronic form. [Section 2 (12)]
(vi) “books of account” includes records maintained in respect of—
(i) all sums of money received and expended by a company and matters in relation to which the receipts and expenditure take place;
(ii) all sales and purchases of goods and services by the company;
(iii) the assets and liabilities of the company; and
(iv) the items of cost as may be prescribed under section 148 in the case of a company which belongs to any class of companies specified under that section. [Section 2 (13)]
(vii) “chartered accountant” means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 who holds a valid certificate
of practice under sub-section (1) of section 6 of that Act. [Section 2 (17)]
(viii) “Chief Financial Officer” means a person appointed as the Chief Financial Officer of a company Section 2 (19).
(ix) “company secretary” or “secretary” means a company secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 who is appointed by a company to perform the functions of a company secretary under this Act.
(x) “electronic form” with reference to information means any information generated, sent, received or stored in media, magnetic, optical, computer memory, micro film, computer
generated micro fiche or similar device.
(xi) “electronic record” means data, record or data generated, image or sound stored, received or sent in an electronic form or micro film or computer generated micro fiche.
(xii) “financial statement” in relation to a company, includes—
(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on any activity not for profit, an income and expenditure account for the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv):
Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement. [Section 2 (40)]
(xiii) “financial year”, in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period ending on the 31st day of March of the following year, in respect whereof financial statement of the company or body corporate is made up:
Provided that on an application made by a company or body corporate, which is a holding company or a subsidiary of a company incorporated outside India and is required to follow
a different financial year for consolidation of its accounts outside India, the Tribunal may, if it is satisfied, allow any period as its financial year, whether or not that period is a year: Provided further that a company or body corporate, existing on the commencement of this Act, shall, within a period of two years from such commencement, align its financial year as per the provisions of this clause. [Section 2 (41)]
(xiv) “issued capital” means such capital as the company issues from time to time for subscription Section 2 (50).
(xv) “net worth” means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate
value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of
revaluation of assets, write-back of depreciation and amalgamation Section 2 (57).
(xvi) “officer who is in default” [Section 2 (60)], for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty
or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:—
(i) whole-time director;
(ii) key managerial personnel;
(iii) where there is no key managerial personnel, such director or directors as specified by the Board in this behalf and who has or have given his or their consent in writing to
the Board to such specification, or all the directors, if no director is so specified;
(iv) any person who, under the immediate authority of the Board or any key managerial personnel, is charged with any responsibility including maintenance, filing or distribution of accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default;
(v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice
to the Board in a professional capacity;
(vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the receipt by him of any proceedings of the
Board or participation in such proceedings without objecting to the same, or where such contravention had taken place with his consent or connivance;
(vii) in respect of the issue or transfer of any shares of a company, the share transfer agents, registrars and merchant bankers to the issue or transfer;
(xvii) “paid-up share capital” or “share capital paid-up” means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paidup in respect of
shares issued and also includes any amount credited as paidup in respect of shares of the company, but does not include any other amount received in respect of such shares, by
whatever name called [Section 2 (64)].
(xviii) “subscribed capital” means such part of the capital which is for the time being subscribed by the members of a company Section 2 (86).
(xix) “turnover” means the aggregate value of the realization of amount made from the sale, supply or distribution of goods or on account of services rendered, or both, by the company during a financial year Section 2 (91).
