PAS-6 Reconciliation of Share Capital Audit Report (Half Yearly)
1. As per MCA notification dated 10th September, 2018 came into force on the 2nd day of October, 2018.
In the Companies (Prospectus and Allotment of Securities) Rules, 2014, after rule 9, the following rule shall be inserted, namely: –
(It is mandatory to for every unlisted public companies to convert its shares into DEMAT, therefore, after 2nd October, 2018 all shares shall be shall be in DEMAT form.)
Rule 9A: Issue of securities in dematerialised form by unlisted public companies:-
(1) Every unlisted public company shall –
(a) Issue the securities only in dematerialised form; and
(b) Facilitate dematerialisation of all its existing securities
in accordance with provisions of the Depositories Act, 1996 and regulations made there under,
(2) Every unlisted public company making any offer for issue of any securities or buyback of securities or issue of bonus shares or rights offer shall ensure that before making such offer, entire holding of securities of its promoters, directors, key managerial personnel has been dematerialised in accordance with provisions of the Depositories Act 1996 and regulations made there under.
(3) Every holder of securities of an unlisted public company, _
(a) who intends to transfer such securities on or after 2nd October 2018, shall get such securities dematerialised before the transfer; or
(b) who subscribes to any securities of an unlisted public company (whether by way of private placement or bonus shares or rights offer) on or after 2nd October 2018 shall ensure that all his existing securities are held in dematerialized form before such subscription.
(4) Every unlisted public company shall facilitate dematerialisation of all its existing securities by making necessary application to a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 and shall secure International security Identification Number (ISIN) for each type of security and shall inform all its existing security holders about such facility.
(5) Every unlisted public company shall ensure that _
(a) it makes timely payment of fees (admission as well as annual) to the depository and registrar to an issue and share transfer agent in accordance with the agreement executed between the parties;
(b) it maintains security deposit at all times, of not less than two years’, fees with the depository and registrar to an issue and share transfer agent in such form as may be agreed between the parties; and
(c) it complies with the regulations or directions or guidelines or circulars, if any, issued by the securities and Exchange Board or Depository from time to time with respect to dematerialisation of shares of unlisted public companies and matters incidental or related thereto.
(6) No unlisted public company which has defaulted in sub-rule (5) shall make offer of any securities or buyback its securities or issue any bonus or right shares till the payments to depositories or registrar to an issue and share transfer agent are made.
(7) Except as provided in sub-rule (8), the provisions of the Depositories Act 1996 the securities and Exchange Board of India (Depositories and participants) 3[Regulations, 2018] and the securities and Exchange Board of India (Registrars to an Issue and share Transfer Agents) Regulations, 1993 shall apply mutatis mutandis to dematerialisation of securities of unlisted public companies.
(8) Every unlisted public company governed by this rule shall submit Form PAS-6 to the Registrar with such fee as provided in Companies (Registration Offices and Fees) Rules,2014 within sixty days from the conclusion of each half year duly certified by a company secretary in practice or chartered accountant in practice.
(8A) The Company shall immediately bring to the notice of the depositories any difference observed in its issued capital and the capital held in dematerialised form.
(9) The grievances, if any, of security holders of unlisted public companies under this rule shall be filed before the Investor Education and protection Fund Authority.
(10) The Investor Education and protection Fund Authority shall initiate any action against a depository or participant or registrar to an issue and share transfer agent after prior consultation with the securities and Exchange Board of India]
(11) This rule shall not apply to an unlisted public company which is:-
(a) a Nidhi;
(b) a Government company, or
(c) a wholly owned subsidiary.
2. As per point (1) above:
First report has to be filed for the half year ending on 30th September 2019.
Second report has to be filed for the half year ending on 31st March 2020.
3. Due date for filing
Normally, E-form PAS-6 is to be filed within 60 days from the end of the half year.
But as per MCA Circular No.16/2019 dated: 28.11.2019– it is stated that the time limit for filing Form PAS-6 without additional fees for the half-year ended on 30.09.2019 will be sixty days from the date of deployment of this form on the website of the Ministry.
Hence, as the e-form PAS-6 is deployed on MCA portal on 15th of July, 2020, therefore it should be filed within 60 days from 15th July, 2020 i.e., 13th of September, 2020 for both the half year ending on 30th September, 2020 and 31st March, 2020.
4. Company Responsibility:
The e-form PAS-6 shall be filed for each ISIN of securities.
5. Whether Private Company is required to convert its shares into DEMAT
As on date the provision of conversion of share into DEMAT is not applicable on a private limited company, however if private company is subsidiary of public company then such private company shall be considered as the deemed public company and therefore it is also required to follow the process of conversion of shares into DEMAT.
6. Key Content of E-form PAS-6
-ISIN is a unique 12 digit alphanumeric identification number allotted for a security (e.g. INE383C01018). Equity fully paid up, equity partly paid up, equity with differential voting /dividend rights issued by the same issuer will have different ISINs.
The e-form PAS-6 shall be filed for each ISIN of securities.
7. PROCESS TO GET ISIN FOR COMPANIES
Every company who want to dematerialised their share have to get International Securities Identification Number (ISIN) and then shareholders will be able to dematerialise their shares with any DP after opening a demat Account.
List of documents required for NSDL/CDSL:
8. What is the penal provisions for not converting securities into DEMAT and obtaining ISIN?
As there is no penalty prescribed under rule 9A for non-compliance, therefore section 450 (punishment where no specific penalty or punishment is provided) will be applicable.
As per Section 450, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to ten thousand rupees, and where the contravention is continuing one, with a further fine which may extend to one thousand rupees for every day after the first during which the contravention continues.