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It is reconciliation of share issued in electronic form plus shares issued in physical form with the total issued share capital of the Company.

At its very basic, the shares dematerialized plus the shares in physical form should be equal to issued/listed capital. The total shares actually dematerialised should not be in excess of the admitted capital. Admitted Capital refers/relates to the quantum of securities, which are admitted for getting dematerialised into the Depository.

There were number for cases came into light where issuer companies had dematerialised shares in excess of admitted capital or without informing the authorities concerned like Registrar of Companies, Stock Exchanges, etc.

Before the introduction of the concept of Share Reconciliation in the Companies Act, 2013, listed companies were required to submit a Reconciliation of Share Capital Audit under Regulation 55A of the SEBI (Depositories and Participants) Regulation, 1996, with eh stock exchanges.

Ministry of Corporate Affairs vide Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2018, made dematerialisation mandatory for the unlisted public companies. Therefore, the need for Share Reconciliation Audit been seen, however, for the time being, Audit Certificate under regulation 55A of SEBI (Depositories and Participants) Regulation, 1996 was required to be filed with the Registrar of Companies on a half-yearly basis. Later, in the year 2019, Companies (Prospectus and Allotment of Securities) Third Amendment Rules, 2019 has introduced the form PAS-6 for the Share Reconciliation.

Applicability of Form PAS-6

All Unlisted Public Company on which provision of Dematerialisation is mandatory, are required to submit Form PAS-6 with the Registrar of Companies within 60 days from the end of the half-year. The form PAS-6 is required to be certified either by a Company Secretary in Practice or Chartered Accountant in Practice.

Non-applicability of form PAS-6:

Following types of companies are not required to submit form PAS-6:

• Private Companies
• Listed Public Companies
• Nidhi Company
• Government Company
• Wholly owned Subsidiary (We are of the view that here wholly owned Subsidiary mean a Private Company which is wholly-owned Subsidiary of a Public Company)

Methodology for Carrying Out form PAS Verification by PCS/PCA

Verification of following docs is suggested:

• Memorandum of Association
• Latest Copy of Annual Return filed with the Registrar of Companies
• Latest Audited Financial Statement
• Confirmation letter from Depositories for admission of Shares for DEMAT
• Copy of Listing permission from all the Stock Exchanges where shares are listed
• Register of Members
• Filed form PAS-3 during the period under review
• Return of Buy-Back of Shares filed with the ROC
• Certified copy of resolutions passed by the Board for forfeiture and re-issue of forfeited shares
• Certified copy of Order and form INC-28 filed with the ROC for reduction of capital/ Restructuring and Amalgamation Scheme
• Latest copy of quarterly shareholding pattern filed with the stock exchanges where share are listed
• MCA Master Data
• Statements from the RTA

Common Questions

Q. Period for which form PAS-3 required to be filed?
A. Form PAS-3 required to be for the half-financial year i.e. April – September and October – March

Q. Due date to file form PAS-6
A. Form PAS-6 required to be filed within 60 days from the end of the half FY.

Q. How many form PAS-6 required to be filed if the company has more than One ISIN?
A. Form PAS-6 is ISIN Specific. In case the company has more than one ISIN, more than one form PAS-6 required to be filed.

Q. Listed Companies are also required to file form PAS-6?
A. No. Only Unlisted Public Companies are required to file form PAS-6.

Q. Public companies having only it debt securities listed on Stock Exchanges, are they required to file form PAS-6?
A. It suggested to such companies to file form PAS-6.

Team
Compliance Support

Disclaimer: The article is based on the analysis of the facts and our understanding and interpretation of applicable provisions of the Companies Act, 2013 as on date. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this article.