Introduction of Form for Reconciliation of Share Capital Audit report

Ministry of Corporate Affairs (MCA) vide notification dated 22 May 2019 has amended the Companies (Prospectus and Allotment of Securities) Rules 2014. Pursuant to the amendment, Sub-rule 8 of Rule 9A is amended whereby every unlisted public company to submit the Reconciliation of Share Capital Audit report with the registrar (ROC) in form PAS-6 within sixty (60) days from the conclusion of each half year.

The form is required to be digitally signed by any one of the Directors of the Company and to be certified by a Company Secretary in practice or by Chartered Accountant in practice duly engaged for the purpose of certification of this form. The filing fees of this Form shall be as provided in the Companies (Registration Offices and Fees) Rules, 2014, i.e., as per the Authorized capital slabs of the Company.

Before this amendment, sub-rule 8 of Rule 9A provided that “The audit report provided under regulation 55A of the SEBI (Depositories and participants) Regulations, 1996 shall be submitted by the unlisted public company on the half-yearly basis to the Registrar under whose jurisdiction the registered office of the company is situated.” Since the manner of submission was not clearly given in the Rule, there was lot of confusion among corporates with regard to the format of audit report, a timeline of submission and the e-form in which this report was to be submitted to ROC.

However, as mentioned in the Amendment Notification, this amendment is effective from 30 September 2019.

Probably the intention of this Amendment appears to enforce the requirement of filing this Audit Report with effect from the half-year ending on 30 September 2019. However, by the way, this Amendment Notification is drafted, the amendment will not be effective till 30 September 2019, and hence the current Rule 9A(8) as mentioned above will continue to be in force till then.

Hence, even after this Amendment, whether to submit this audit report for the half year ending 31 March 2019 and manner of submission, if required, is still unclear….

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