Exemption under Section 212 of the Companies Act, 1956

[csarengarajan]

EXEMPTION UNDER SECTION 212 OF THE COMPANIES ACT, 1956

 

MCA has issued guidelines for applications seeking exemption under Sec 212. An application should be accompanied by the following:

 

1. Specific Board resolution in support of the proposal mentioning inter-alia the names of subsidiaries and their financial year in reference.
2. Copies of approvals under Sec 212 obtained, if any, during the last three financial years.

 

The following information should invariably be furnished with the application in the fields forming a part of the e-form.

 

(i)                  The financial year for which exemption is sought which should match with the year as mentioned in the accompanying board resolution.

(ii)                Precise reasons/ justification for seeking exemption

(iii)               Names of the subsidiaries in respect of which exemption is sought.

(iv)              Dates on which the companies became subsidiaries of the applicant company.

(v)                The financial years of the holding and subsidiary companies under reference.

 

The Company seeking exemption from attaching separately the accounts of its subsidiary/ies is required to ensure the following which may also be stated as reasons/ justification for seeking exemption:

 

1. The holding company should prepare consolidated audited accounts as per the Accounting Standard 21- (AS - 21) comprising of the holding company and all its subsidiaries. The consolidated accounts capture all transactions of the holding company and its subsidiaries.
2. The holding company should prepare individual Annual Accounts for all its subsidiaries which are made available to the members of the holding company on request.
3. The holding company should attach abridged statement showing the financial performance of all its subsidiaries to the Annual Accounts of the holding company. [Statement under Section 212(1)(e)]  

 

The application for seeking exemption under Section 212(8) is required to be made in e-form 23AAB. The following documents are required to be attached to the e-form:

 

1. Resolution passed by the Board of Directors for application to the Central Government for exemption under Section 212(8). Approval of the Board of Directors may be sought either at the Board Meeting or by the resolution by the Board of Directors passed by circulation, as convenient.
2. Financial Statements for the latest financial year of the company on stand-alone basis.
3. Financial Statement for the latest financial year of the company on consolidated basis.
4.   Annual Report of the subsidiary Company/ies for which the exemption is sought.
5.   Exemption letter received by the holding company for the previous years, if any.
6. Statement detailing reasons and justification for seeking exemption.

 

The filing fee for making application in terms of Companies (Fees on Application) Rules is as follows:

 

·        Companies with Authorised Share Capital less than Rs 25 Lacs- Rs 500/-

·        Companies with Authorised Share Capital less than Rs 25 Lacs or more but less than Rs 5 crores- Rs 1000/-

·        Companies with Authorised Share Capital less than Rs 5 crores or more - Rs 2000/-

 

Time frame for the application and receipt of approval

 

The Company seeking exemption is advised to apply to the MCA atleast 4 months prior to end of the financial year of the holding company for which exemption is sought.

 

To expedite the process for getting the exemption, it is advised to send a physical set of all documents that are filed for seeking exemption under Section 212 followed by the Electronic filing to the MCA at foll address

 

K/A: Sec 212 Dept Code

The Under Secretary to the Government of India

Ministry of Corporate Affairs

5^th Floor, A wing, Shastri Bhawan,

Rajendra Prasad road,

New Delhi-110001

 

 

 

 

[S.V. Raman]

Some three months ago, a private company applied for exemption. Orally it was informed to the company that consolidated accounts would be required. The company did not pursue the exemption request due to change in some other circumstances. Raman --- On Tue, 3/3/09, csarengarajan <csaren...@gmail.com> wrote:

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[csarengarajan]

Kindly check MCA website where these informations are available,  May be due to pending passing of companies bill, they  might requie and there was a provision in the bill 2008.  Kindly check ROC again.

On 3/4/09, S.V. Raman <svra...@yahoo.com> wrote:

Some three months ago, a private company applied for exempt ion. Orally it was informed to the company that consolidated accounts would be required. The company did not pursue the exemption request due to change in some other circumstances.