File your AOC XBRL with MCA successfully.

In India, companies are mandated to file Form AOC-4 with the Registrar of Companies (ROC) and the Ministry of Corporate Affairs (MCA) every year. This form serves as a formal disclosure of the company’s annual financial statements, including the board’s reports and the auditor’s reports.

The purpose of this filing is to demonstrate accountability and transparency to all stakeholders, providing them with a clear view of the company’s financial health and operational integrity. Form AOC-4 must be submitted within 30 days following the Annual General Meeting (AGM) where these reports are presented.

Understanding the Importance of Filing AOC-4 for Your Business

Comprehensive Financial Overview

What are Financial Statements?

Financial statements are formal records that capture all the financial activities and the current financial position of a company. According to a survey by the Ministry of Corporate Affairs, over 90% of stakeholders find financial statements critical in assessing company performance annually.

These documents are essential for providing a transparent account of a company’s financial health, growth, and changes in its financial position, making them invaluable to shareholders and investors.

Why File AOC-4?

Mandatory and Informative Communication

The annual filing of Form AOC-4, which includes the financial statements, the Board’s Report, and the Auditor’s Report, is mandated by Indian corporate law. This isn’t just a legal formality; it’s a foundational aspect of corporate transparency.

Board’s Report Insight: This report gives an annual rundown of your company’s activities, providing insights that are not usually available through financial data alone.
Auditor’s Report Significance: The auditor’s report assesses the accuracy of the financial statements, ensuring that they provide a true and fair view of the company’s financial state. Over 85% of investors reported in a recent financial survey that their confidence in a company increases significantly with the transparency provided by an auditor’s report.

Enhancing Decision-Making Capabilities

For stakeholders, including investors and financial institutions, the accuracy and completeness of information in AOC-4 filings can be pivotal. They use this data to make informed decisions regarding investments, loans, and other financial relations with the company.

Statistical Note: A study in 2021 revealed that businesses that maintain robust disclosure practices through filings like AOC-4 see up to 50% more interest from institutional investors than those that do not.

Compliance and Trust

Regular and timely filing of AOC-4 demonstrates a company’s commitment to legal standards and corporate governance, which can significantly enhance its reputation in the market.

Trust Factor: Consistently updated and accurate financial reports are known to build and maintain investor trust, potentially increasing investment and funding opportunities.

Tool for Internal Analysis

From an internal perspective, these financial statements enable company management to perform detailed financial analysis, which is essential for strategic planning and operational adjustments.

Operational Efficiency: Effective use of these reports can lead to improved operational efficiencies and optimization of resources, as they provide a factual basis for evaluating company performance against industry benchmarks.

Who Has to File AOC-4?

Form AOC-4 is a crucial document that various entities must file as part of their compliance with Indian corporate regulations. Below, we explore who is required to file this form, in which format, and how to manage this requirement.

General Requirement for All Companies

Every company is obligated to file financial statements along with Form AOC-4. This includes both standalone and consolidated financial statements, if applicable.

Special Instructions for Non-Banking Financial Companies (NBFCs)

Every Non-Banking Financial Company (NBFC) that is required to comply with the Indian Accounting Standards (Ind AS) should file their financial statements using Form AOC-4 NBFC (Ind AS). If they have consolidated financial statements, these should also be filed with Form AOC-4 CFS NBFC (Ind AS) to ensure comprehensive compliance.

Corporate Social Responsibility (CSR) Reporting

Companies under Section 135(1) of the Companies Act, 2013, which are engaged in CSR activities, must include a CSR report (Form CSR-2) as an addendum to their AOC-4 filing for fiscal years 2020-2021 onwards.
- For the fiscal year 2021-2022, Form CSR-2 may be filed separately by March 31, 2023, following the submission of Form AOC-4 or its variants.

For a detailed exploration of the requirements and benefits of compliance filings, read our comprehensive guide on Understanding AOC-4 and MGT-7 Filings. This blog provides essential insights into how accurately filing AOC-4 and MGT-7 can enhance your company’s transparency and investor relations

Who should file Form AOC-4 with MCA in XBRL format?

All companies registered in India must mandatorily file Form AOC-4.

In 2011, MCA mandated that Companies in India that meet any of the following criteria need to file XBRL financial statements along with e-form AOC-4, shortly known as AOC-4 XBRL:

All companies incorporated under the Companies Act, 1956 and having a paid up capital of Rs 50 million or more, or a turnover of Rs 1,000 million or more
All companies that are listed in an Indian stock exchange (NSE/BSE) and their Indian subsidiaries irrespective of their capital or turnover.

How to file your e-Form successfully?

Despite being a yearly process, there can be some glitches that one can encounter while filing the AOC forms to MCA.

Here are a few tips to help you file successfully.

Always download the AOC-4 form newly from MCA website.
Attach the instance document correctly. XBRL file should always be *.xml format.
Do not rename or open any xml files generated from your software or supplied by your service provider.
Ensure the XBRL is submitted on the same day as the day of validation with MCA. Any delay can lead to the error message “ Latest instance document should be attached with the AOC-4 form”
Choose the appropriate taxonomy/accounting standard and ensure mandatory fields are filled properly with appropriate information.
Example: It is crucial to select the correct taxonomy on the AOC form based on the accounting standard your company adopts; choose “AS Taxonomy” for Indian GAAP and “Ind-AS Taxonomy” for IND AS to avoid submission errors. For a deeper understanding of the differences between these standards, check out our detailed analysis in Indian GAAP vs IND AS: Key Differences.

Frequently encountered errors or failure notices:

“Latest Instance Document not attached”:
- Always Download forms from newly submitted e-forms available at the Ministry of corporate affairs website. Mismatches between the forms may lead to incorrectness.
“Pre Scrutiny error”:
- Once the e-form is filled you’ll have to press the Check form option and then check on Pre Scrutiny option. In case of any inconsistency, it might throw error such as digital signatures unsigned which should not cross the size beyond 6 MB, only class 2 or equivalent class preferable.
“Data filled in the form is not viewing after pre- scrutiny”:
- Could be because of mandatory fields not filled from the client end.
SRN of a form is marked as ‘Defective” :
- Such forms are required to be filed afresh after rectifying the defects/ incompleteness.

Penalty for Late Filing with MCA XBRL

As per the latest rules, for delayed filing of AOC-4 , a penalty of INR 100 per day is payable.

For non-filing of AOC-4 , a company can be penalized at INR 10,000 a day upto a maximum of INR 10 Lakhs, and the managing directors and CFOs penalized at INR 1 Lakh + INR 100 per day upto a maximum of INR 5 Lakhs.

Engaging DataTracks to handle your MCA XBRL work can help ease the stress of meeting filing deadlines without compromising on quality, and at competitive rates.

Write to us on enquiry@datatracks.in or contact us on +91 44 4208 1719 to know more.

DataTracks, a global leader in regulatory compliance reporting solutions, has been in business since 2005 and has helped prepare more than 172,000 reports since inception. DataTracks provides fully assisted services in selected regulatory regimes where inputs provided by clients in traditional formats are converted to HTML, XML, XBRL or iXBRL formats.

Key Takeaways on AOC-4 Filings

Enhanced Transparency: Filing Form AOC-4 helps in maintaining a high level of transparency within the corporate environment, allowing stakeholders to have a detailed understanding of the company’s financial status.
Regulatory Compliance: Timely submission of Form AOC-4 ensures compliance with Indian corporate law, which can help avoid legal penalties and strengthen the company’s credibility among investors and the public.
Stakeholder Confidence: By regularly updating stakeholders with the latest financial and audit reports, companies can build and maintain trust, potentially leading to increased investor confidence and better stakeholder relations.
Audit Insights: The inclusion of auditor’s reports in Form AOC-4 provides critical insights into the company’s financial practices and risk management, essential for informed decision-making by stakeholders.
Deadline Significance: Adhering to the 30-day submission deadline post-AGM underscores the company’s commitment to statutory duties and operational efficiency.