Filing Reconciliation of Share Capital Audit Report in PAS-6 by Unlisted Public Companies

Since dematerialisation of securities, Every listed company is required to keep its shares in dematerialised form. However, to avoid any difference between shares issued as per Books of Accounts and shares held in DEMAT Account, every listed company is required to file a reconciliation with SEBI on a quarterly basis stating reasons of difference in shares issued and shares in DEMAT Account.

Now Government has mandated such provisions of dematerialisation for unlisted public companies as well vide notification dated 10th September, 2018 through insertion of Rule 9A to Companies (Prospectus and Allotment of Securities) Rules, 2014. 

This article contains a detailed discussion of dematerialisation of shared by a unlisted public company and filing of Form PAS-6:

1. Which unlisted company is required to keep shares in DEMAT Form

By virtue of provisions of section 29(1A) of Companies Act, 2013 (‘the Act’) read with Rule 9A of the of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (‘the rules’), evert unlisted public company is required to:

1. issue shares only in dematerialised form.
2. Convert existing shares to dematerialised shares.

Therefore, private companies can issue shares in physical form. Further, provisions of this rule shall also not apply to:

1. A Nidhi Company
2. A Government Company; or
3. A Wholly owned subsidary

Every unlisted public company shall facilitate dematerialisation of all its securities by making necessary applications to a depository and shall secure International security Identification Number (ISIN) for each type of security.

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2. Payment of DEMAT Fee

• Every unlisted public company is required to make timely payment of fees (admission as well as annual) to the depository and registrar to an issue.
• The company is required to maintains security deposit of not less than 2 years fees with the depository and registrar to an issue.; and
• If any unlisted public company defaults in payment of fees or maintaining security deposit then such company can’t 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.

3. Compliance with SEBI Norms

• Every unlisted public company complies with the regulations or directions or issued by the securities and Exchange Board (SEBI) or Depository from time to time with respect to dematerialisation of shares of unlisted public companies.
• Further, provisions of the Depositories Act 1996 and SEBI regulations shall apply mutatis mutandis to dematerialisation of securities of unlisted public companies.

4. Type of companies require to file reconciliation of share capital audit report

• Rule 9A(8) of the rules requires unlisted public companies to file reconciliation of share capital audit reports to the Registrar in Form PAS-6 for every half year. 
• In case of any difference between issued share capital and shares held in DMAT Account, The company shall immediately bring such deviation to the notice of the depositories.

5. Content of Form PAS-6 –Reconciliation of share capital audit report

Form PAS-6 will be filed by every unlisted company for each ISIN (International Securities Identification Number- a unique 12-digit alphanumeric number code used to identify securities issued by NSDL) for each half year of a financial year containing following details:

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1. Details of company viz. name, address and email id.
2. CIN and ISIN
3. Period of filing
4. Details of the company’s capital such as issued capital, shares held in dematerialised form in NSDL, CDSL, physical form and the reason for any differences in the capital.
5. Details of the changes in the share capital during the half-year in the form of a bonus issue, rights issue, ESOPs, private placement, conversion, amalgamation, capital reduction, buyback, forfeiture and others.
6. Details of the total shares held by directors, promoters and KMP in physical and demat form.
7. Details of appointment of common agency for share registry work, if any or any other professional working on filing of Form PAS-6.

6. Certification of Form PAS-6 –Reconciliation of share capital audit report

Reconciliation of share capital audit report in Form PAS-6 is required to be certified by a practising chartered accountant or company secretary. These professionals need to verify the records and registers of unlisted public companies diligently and thereafter, they can certify the said form.

7. Time limit for furnishing Form PAS-6 –Reconciliation of share capital audit report

The time limit for filing the reconciliation of the share capital audit report is 60 days from the end of the relevant half year. Therefore, such form is required to be filed by following due dates:

For First Half year (April to September)	30th November
For second half year (October to March)	30th May

8. Manner of filing Form PAS-6- Reconciliation of share capital audit report

An unlisted public company should follow the below given steps for filing reconciliation of share capital audit report for any half year in a given year:

1. Go to MCA portal www.mca.gov.in
2. Login on the MCA portal with user id and password.
3. Download Form PAS-6 using the path ( Home> MCA Services>  E-Filing>  Company Forms Downloads).
4. Fill up the required details in Form PAS-6.
5. Get the form digitally signed by the Director, CEO, CFO or company secretary of the company.
6. Add the DIN of the director, PAN card of CEO or CFO or membership id of ICSI of company secretary.
7. Get the certification done from a chartered accountant or practising company secretary and enter their membership id of ICAI or ICSI, as the case may be.
8. Pay the applicable fees as per below table given in The Companies (Registration of offices and Fees) Rules, 2014 and submit the form

Nominal share capital of the company	Fees
Less than INR 1,00,000	200
INR 1,00,000 or more but less than INR 5,00,000	300
INR 5,00,000 or more but less than INR 25,00,000	400
INR 25 Lacs or more but less than INR 1 Crores	500
INR 1 Crores or more	600

9. Different ISIN is issued for different types of securities and one PAS-6 has to be filed for one ISIN. Therefore, in case of multiple ISIN, corresponding multiple PAS-6 is required to be filed.

9. Penalty for non-furnishing of Form PAS-6 –Reconciliation of share capital audit report

• The Act contains a general section 450 which deals with penalty provisions for the cases of violation or contravention of provisions of the Act where there is no specific penalty or punishment is provided.
• There is no penalty given in rule 9A for any default in submission of Form PAS-6 to the Registrar by any unlisted public company. Therefore, section 450 of the Act will apply and accordingly, a penalty of INR 10,000 will be applicable for the company and every officer in default. 
• In case of continuing default, a penalty up to INR 1000 per day may be applicable subject to a maximum of INR 2,00,000 in case of a company and INR 50,000 in case of an officer who is in default or any other person.