Clarification under sub-section (7) of section 186 of the Companies Act,2013

General clrcular !fo. O6l2nl5 File No. 5/3/ 13-CL.V Government of lndia Ministry ol Corporate Affairs 5'h floor, 'A' wing, Shastri Bhavan Dr. R P Road, New Delhi. Dsted 96 APrll' 2015 All Regional Directors, All Registrar of Companies, All Stakeholders. sublect : cl,rrtflcatlor under sub-secttoa (71 of rectlo! 186 of the CoBl|anles Act, 2013 Sir, Attention of this Ministry has been drawn to General Circular No 06/2013 dated 14.03.2013 vide which it was clarified that in cases where the effective yield (effective rate of return) on tax free bonds is greater than the yiild on prevailing bank rate, there was no violation of Section 372A(31 of bompaniis Act, 1956. Stakeholders have requested for similar cLarification w.r.t. corresponding section 186(7) of the Companies Act' 2013' 2. The matter has been examined in the Ministry and it is hereby clarified that in cases where the effective yield (effective rate of return) on tax ftee bonds is greater than the prevailing yield of one year, three year, five yea-r or ten y"* -Gou..rrment Security closest to the tenor of the loan, there is no violation of sub-section (7) of section 186 ol the Companies Act, 2013' 3. This issues with the approval ofcompetent authority' Yours faithfully, ,fr,:kf P}jLo'le 23387263 Copy to : 1. All concerned 2. PS to CAM 3. PS to Secretary 4. PS to A.S. 5. PS to Joint Secretaries 6. E-Governance Cell for uploading this Circular in MCA 21'