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Procedure for approval u/s 212(8)

Niki Shingade (Company Secretary) (83 Points)

06 April 2010

Dear All,

Please provide with a brief procedure and draft resolution for seeking approval u/s 212(8).

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Kiran Toshniwal (Practicing Company Secretary) (142 Points)
Replied 07 April 2010

Hi,

S. 212(8)—Exemption from incorporation of subsidiary’s account in the annual accounts—Board Resolution

“RESOI.VED that an application he made to the Central Government for exempting the Company from complying with the provisions of section 212 of the Act in relation to M/S. ………………. Limited, a subsidiary of the company on the ground that the office of the Company having been gutted by fire and all accounts and books having been destroyed, no information is available to the company as to the balance sheet and other statements of that company required to he incorporated in the balance-sheet of the holding company.”

S. 212(8) — Exemption from the provision of incorporating subsidiary’s accounts situated in foreign land—Board Resolution

“RESOLVED that as the Company’s subsidiary, M/s. ………………….. & Co. Ltd., is situated in ……………. and no information is available to the Company as to the balance-sheet and other statement of that company required to be incorporated in the balance-sheet of the company pursuant to the provisions of section 212 of the Companies Act, 1956, the Secretary of the Company be and is hereby authorised to apply to the Central Government to direct that in relation to M/s. …………… Ltd., a subsidiary of the Company, the provisions of section 212 shall not apply.”

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Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 07 April 2010

Dear Kiran,

Kindly share the exact procedure/checklist for exemption u/s 212(8), if possible.

Thanks

J. Manivannan (Advocate & IP) (242 Points)
Replied 07 April 2010

LISTED COMPANIES MAY USE THIS RESOLUTION:

“RESOLVED THAT pursuant to the provisions of Section 212(8) of the Companies Act, 1956 and other applicable provisions, if any, of the Companies act 1956, (including any statutory modification or re-enactment thereof for the time being in force) and subject to the Articles of Association of the Company and subject to such approvals, consents, sanctions and permissions of the appropriate authorities, departments or bodies as may be necessary, the company do hereby make an application in e-Form 23AAB to the Central Government for seeking exemption from attaching the annual accounts of the subsidiaries of our Company namely ABC Limited, a company incorporated under the provisions of the Companies Act, 1956, XYZ Limited, a company incorporated under the provisions of the Companies Act, 1956 and PQR Limited, a company incorporated in Germany for the Financial Year ending 2009-10 on the ground that the Company, being a listed company has been mandated by clause 32 of the listing agreement entered into with Bombay Stock Exchange Limited and National Stock Exchange (India) Limited and as prescribed by Accounting Standard 21 issued by the Institute of Charted Accountants of India to publish audited consolidated financial statements, therefore, publishing the standalone Annual Report of individual subsidiaries will lead to duplication of data, increase in size of Annual report and thereby making the annual report ‘non-reader friendly’ and increasing the printing, postage, dispatching charges.”

“RESOLVED FURTHER THAT Mr. Ajith Kumar, Chairman & Managing Director and Mr. Ashok Kumar, Company Secretary be and are hereby authorized severally on behalf of the Company to sign and verify the application and to take such steps as may be necessary for obtaining such approval, to do all acts, deeds and things that may be necessary, proper, expedient or incidental for the purpose of giving effect to the aforesaid Resolution.”

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S. Satheesh Kumar (Assistant Company Secretary) (84 Points)
Replied 07 April 2010

Thanks Mr. Manivannan and Mr. Kiran.

In addition to the above, I am giving the following procedure:

Applications seeking exemption under Section 212 of the Companies Act should be filed through Form 23AAB accompanied by the following documents:

Specific Board resolution in support of the proposal mentioning inter-alia the names of subsidiaries and their financial year in reference.

Copies of approvals under Section 212 obtained, if any, during the last three financial years.
The following information should invariably be furnished with the application in the fields forming part of the eForm:

The financial year for which exemption is sought.This year should also be the year mentioned in the accompanying board resolution.

Precise reasons/justification for seeking exemption.

Names of subsidiaries in respect of which exemption is sought.

Dates on which the companies became subsidiaries of the applicant company.

The financial years of the holding and subsidiary companies under reference.
The companies may have to furnish any other additional information as may be asked for by the Department.