MCA:
Ministry of Corporate Affairs has notified amendments to the rules which shall be called as the Companies (Share Capital and Debentures) Amendment Rules, 2016 and come into existence from the date of the notification in the official gazette. A proviso has been inserted after Clause n (iii) of the Rule 17(1) of the existing rules, stating that where the audited accounts are more than six months old, the calculations with reference to buy back shall be on the basis of un-audited accounts not older than six months from the date of offer document which are subjected to limited review by the auditors of the company. The said clause provides for the requirement of a report addressed to the Board of directors by the company’s auditors stating that the audited accounts on the basis of which calculation with reference to buy back is done is not more than six months old from the date of offer document.
MCA:
Ministry of Corporate Affairs has issued an Order stating that the debt to capital and free reserves ratio shall be 6:1 for government companies as defined under section 2(45) of Companies Act, 2013, which carry on Non Banking Finance Institution activities and Housing Finance activities. Section 68(2)(d) of the Companies Act 2013 provides that the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back should not be more than twice the paid-up capital and its free reserves.
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