ARTICLES OF ASSOCIATION OF A PRIVATE COMPANY
The Companies Act, 1956
Company Limited By Shares
Articles of Association
of
RKG Capital and Finance Co. Private Limited
Table 'A' Excluded
(1) Table A not to apply, but the company to be governed by these Articles-.The regulations contained in the Table 'A' in the First Schedule of the Companies Act, 1956, shall not apply to this Company, but the regulations for the management of the Company and for the observance of the members and their representatives shall, subject to any exercise of the statutory powers by the Company in reference to the repeal or alterations of or additions to its regulations by a special resolution as prescribed by the Companies Act, 1956, be such as are contained in the articles set out hereinbelow.
Interpretation
(2) Interpretation clause.-In these articles, unless the context otherwise requires, the following words or expressions shall have the following meanings:
The Company.-"The Company" means the RKG Capital and Finance Co. Private Ltd.
The Act.-"The Act" means the Companies Act, 1956 or any statutory modification or re-enactment thereof for the time being in force.
Board.-" Board" means a meeting of the Directors duly called and constituted or, as the case may be, the Directors assembled at a Board or the requisite number of Directors entitled to pass a resolution by circulation in accordance with these Articles.
Managing Director.-"The Managing Director" means the Managing Director or Managing Directors of the Company for the time being.
Month.-" Month" means the calendar month.
Year-"Year" means the calendar year.
Dividend.-" Dividend" includes Bonus.
These Presents.-"These presents" means Memorandum of Association and these Articles of Association as originally framed or the regulations of the Company for the time being in force.
Seal.-"Seal" means the common seal of the Company for the time being.
Ordinary and Special Resolution.-"Ordinary Resolution" and "Special Resolution" shall have the meanings assigned thereto respectively by section 189 of the Act.
Paid-up.-"Paid up" includes credited as paid up.
Writing.-"In writing" and "written" shall include printing, lithography or part printing and part lithography and any other mode or modes of representing or reproducing words in visible form.
The Off ice.-"The Office" means the Registered Office of the Company for the time being.
The Chairman.-"The Chairman" means the Chairman of the Board of Directors.
Auditor.-"Auditor" means and includes a Auditor as such for the time being of the Company.
Proxy.-" Proxy" means a person who is appointed by an instrument to vote for a member at a general meeting at a poll.
Secretary. -"Secretary" includes an Assistant Secretary or any person appointed by the Board to perform any of the functions of a Secretary.
Singular number.-The words "singular number" shall include the plural numbers and vice versa.
Gender.-The words "masculine gender" shall include the feminine gender and vice versa.
Debenture.-The word "debenture" includes debenture stock and bonds.
Person.-The word "person" shall include a Company or Corporation.
Marginal notes.-The "marginal notes" and catch lines hereto shall not affect the construction or meaning hereof.
Expression in these regulations to bear same meaning as In Act.-Save as aforesaid and except where the subject or context otherwise requires, the words or expressions contained in these regulations and not defined in these regulations shall bear the same meaning as assigned to them respectively in the Act.
(3) Capital.-The Authorised Share Capital of the Company is Rs. 10,00,00,000 (Rs. Ten crores) divided into 10,00,000 Equity Shares of Rs. 100 (Rupees One hundred only) each: The Company shall have power to increase, consolidate, sub-divide, reduce or otherwise alter its share capital, subject to the provisions of the Act.
(4) Private Company.-The Company is to be a private company and accordingly:
(a) The number of members (exclusive of persons who are in the employment of the Company and of persons who having been formerly in the employment of the Company were members of the Company while in that employment and have continued to be members after the employment ceased) shall not exceed fifty, but where two or more members hold one or more shares in the Company jointly they shall, for the purpose of this Article be treated as a single member.
(b) Any invitation to the public to subscribe for any shares or debentures of the Company is hereby prohibited.
(c) The right to transfer shares of the Company is restricted in the manner and to the extent hereinafter appearing in these Articles.
(5) Commencement of business.-The business of the Company may commence as soon after incorporation of the Company as the Directors think fit and notwithstanding that only part of the shares may have been allotted.
(6) Share capital and share certificate: Shares to be numbered progressively. The shares in the capital shall be numbered progressively according to their several denominations and except in the manner hereinbefore mentioned no share shall be subdivided. Every forfeited or surrendered share shall continue to bear the number by which the same was originally distinguished.
(7) Shares under control of Board.-Subject to the provisions of these Articles and of the Act, the shares shall be under the control of the Board of Directors, who may allot or otherwise dispose off the same to such persons, on such terms and conditions and at such times as the Board of Directors think fit and (subject to the provisions of sections 78 and 79 of the Act) either at a premium or at par or at discount and for such consideration as the Board of Directors think fit.
(8) Acceptance of shares.-An application signed by the applicant and or his power of attorney on his behalf for the shares in the Company, followed by an allotment of any share therein shall be an acceptance of shares within the meaning of these Articles; and every person who thus or otherwise accepts any shares and whose name is put on the Register of Members shall be a member for the purpose of these Articles.
(9) Deposit and calls, etc. to be a debt payable by allottee immediately.-(a) On the allotment of any shares being made by the Board of Directors, any money required or directed to be paid by way of deposit, call or otherwise in respect of any shares allotted by them, shall immediately on insertion of the name of the allottee in the Register of Members as the holder of such shares become a debt due to and recoverable by the Company from the allottee thereof and shall be paid by him.
(b) Liability of members: Every member or his heirs, legal representatives, executors or administrators shall pay to the Company the portion of the capital represented by his share or shares, which may, for the time being, remain unpaid thereon, in such amounts, at such time or times and in such manner, as the Board of Directors shall fix for the payment thereof from time to time, in accordance with the Company's Articles.
(10) Trusts not recognised.-Except as required by law or ordered by a Court of competent jurisdiction, no person shall be recognised by the Company as holding any shares upon any trust and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any benami, equitable, contingent, future or partial interest in any share or any interest in any fractional part of a share or (except only as by these presents or by law otherwise provided) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.
(11) Company's funds not to be applied In the purchase of Its own shares.-The funds of the Company shall not be applied for the purchase of any shares of the Company and it shall not give any financial assistance for or in connection with the purchase or subscription of any shares in the Company or in its holding Company save as provided by section 77 of the Act.
(12) Issue of share certificate.-The certificates of shares and duplicate thereof shall be issued under the seal of the Company.
(13) Member's right to certificate.-Every member whose name is registered as a member in the Register of Members shall be entitled to one certificate for all the shares registered in his name, or if the Board of Directors so approve to several certificates each for one or more of such shares, but in respect of each additional certificate, there shall be paid to the Company a fee of Re. 1 or such less sum as the Board of Directors may determine. Every certificate of shares shall specify the number and denoting numbers of the shares in respect of which it is issued and the amount paid up thereon.
(14) Issue of new certificates In place of one defaced, lost or destroyed.-If any certificate be mutilated or defaced, then, upon production thereof to the Board of Directors, they may order the same to be cancelled and may issue a new certificate in lieu thereof and if any certificate be lost or destroyed, then upon proof thereof to the satisfaction of the Board of Directors and on such indemnity as the Board of Directors deem adequate being given, a new certificate in lieu thereof shall be given to the registered holder of the shares to which such lost or destroyed certificate shall relate.
(15) Fees for Issue of new certificates.-For every certificate issued under the last preceding Article, there shall be paid to the Company the sum of Rs. 2 or such smaller sum as the Board of Directors may determine. However, Board of Directors may in any case or generally, waive the charging of such fees.
Calls on shares
(16) Calls on shares.-The Board of Directors may, from time to time, subject to the terms on which any shares may have been issued, make such calls as they think fit upon the members in respect of all moneys unpaid on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment thereof made payable at fixed times and each member shall pay the amount of every call so made on him to the person and at the time and place appointed by the Board of Directors. A call may be made payable by instalments.
(17) When call deemed to have been made and notice to call.-A call on the shares shall be deemed to have been made at the time when the resolution of the Board of Directors authorising such call was passed. No call shall exceed one-fourth of the nominal value of the share or be payable at less than one month from the date fixed for the payment of the last preceding call. Notice of at least fourteen days shall be given of any call specifying the time or times and place of payment and to whom such call shall be paid.
(18) Grant of extension of time for payment of calls.-The Board of Directors may at its discretion extend the time fixed for the payment of any call on the shares and may extend such time as to call of any of such members as the Board of Directors may deem fairly entitled to extension by reason of residence at distance or other cause; but no member shall be entitled to such extension save as a matter of grace and favour.
(19) If any member fails to pay any call, due from him on the day appointed for payment thereof, or any such extension thereof as aforesaid, he shall be liable to pay interest on the same from the day appointed for payment thereof to the time of actual payment at five percent per annum or at such lower rate as shall from time to time be fixed by the Board of Directors, but nothing in this Article shall render it obligatory for the Board of Directors to demand or recover any interest from any such member and the Board of Directors shall be at liberty to waive payment of such interest either wholly or in part.
(20) Amount payable at fixed times or by Instalments payable as calls.-If by the terms of the issue of any shares or otherwise, any amount becomes payable on allotment or at any fixed date whether on account of the nominal value of the share or by way of premium, every such amount shall be payable on the date on which by the terms of issue such sum becomes payable as if it were a call duly made by the Board of Directors and on which due notice had been given and in case of non-payment of such sum, all provisions contained in the preceding article in respect of calls shall apply to such amount herein contained in respect of calls shall relate to such amount or instalment accordingly.
(21) Evidence in actions by company against shareholders.-Subject to the provisions of the Act and these Articles, on the trial or hearing of any action or suit brought by the Company against any shareholder or his representatives for the recovery of any debt or money claimed to be due to the Company in respect of his shares, it shall be sufficient to prove that the name of the member is or was when the claim arose on the Register of shareholders of the Company as a holder or one of the holders of the number of shares, in respect of which such claim is made the resolution making the call is duly recorded in the minutes books and the notice of such call was duly given to the member or his representatives sued in pursuance of these Articles, and the amount claimed is not entered as paid in the books of the Company and it shall not be necessary to prove the appointment of the Board of Directors who made such call, nor that a quorum of Board of Directors was present at the Board at which any call was made nor that the meeting at which any call was made was duly convened or constituted, nor any other matter whatsoever but the proof of matters aforesaid shall be conclusive evidence of the debt.
(22) Payment of calls in advance.-The Board of Directors may, if it thinks fit, agree to receive from any member willing to advance the same all or any part of the moneys due upon his respective shares beyond the sums actually called up and upon the moneys so paid in advance, or upon so much thereof from time to time and at any time thereafter as exceeds the amount of the calls then made upon the shares in respect of which such advances have been made, the Company may pay interest at such rate as the members paying such sum in advance and the Board of Directors agree upon. But the moneys so paid in excess of the amount of call shall not rank for dividends or participation in profits. The Board of Directors may at any time repay the amount so advanced upon giving to such member three months' notice in writing. The member paying any such sum in advance on his shares shall not be entitled to voting rights in respect of moneys so paid by him, until the same would but for such payment become presently payable.
Joint Holders of Shares
(23) Joint holders of shares.-Where two or more persons are registered as holders of any share of the company, they shall be deemed to hold the said share as joint tenants with benefits of survivorship subject to the following and other provisions contained in these Articles.
(a) Registration of shares in case of joint holding.-Shares may be registered in the name of any person, company or other body corporate, but any shares shall not be registered in the name of more than four persons jointly as members.
(b) Delivery of share certificate.-The certificates of shares registered in the names of two or more persons shall be issued and delivered to the person first named on the Register of Members.
(c) Several liabilities of joint holders.-The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.
(d) First-named of joint holders deemed to be sole-holders.-If any share is registered in the names of two or more persons, the person first-named in the Register of Members shall as regards receipt of share certificates, dividends or bonus or service of notices and all or any other matter connected with the Company, (except voting at meetings, and the transfer of the shares) be deemed to be the sole-holder thereof, but the joint holders of a share shall be severally and jointly liable for the payment of all instalments and calls due in respect of such share and for all liabilities thereof according to the Company's regulations.
(e) Death of one or more joint holders of shares.-If any one or more of the persons named in the register of members as the joint holders of any share dies, the survivors shall be the only persons recognised by the Company as having title to or interest in such share, but the estate of a deceased joint holder will continue to remain liable for any liability on shares held by him jointly with any other person.
(f) Votes on shares held in joint holding.-If there are two or more joint holders of any shares, any one of such joint holders may vote at any meeting of the Company either personally or by proxy in respect of such shares, as he were solely entitled thereto, provided that if more than one of such joint holders of such shares be present at any meeting either personally or by proxy, then one of the said persons to present whose name stands higher on the Register of Members shall alone be entitled to vote in respect of such shares, but the other or other joint holders of such shares, shall be entitled to be present, at the meeting. The executors or administrators of a deceased member in whose names shares stand, shall be deemed joint holders thereof for the purpose of these articles.
(g) Service of notice or document to joint holders.-The Company may serve or give any document or notice to the joint holders of a share, by serving or giving the document or notice on or to the joint holder named first in the Register of Members in respect of the share.
Forfeiture of Shares and Lien on Shares
(24) Service of notice, in case call or instalment not paid.-If any member fails to pay any call or instalment on or before the day appointed for the payment of the same or any extension thereof, the Board of Directors may, at any time thereafter during such time as the call or instalment remains unpaid, serve a notice on such member requiring him to pay the same, together with any interest that may have accrued and all expenses that may have been incurred by ihe Company by reason of such non-payment.
(25) Form of Notice.-The notice issued under the preceding Article shall name a further day (not being less than fourteen days from the date of the notice) and a place or places on and at which, such call or instalment and such interest and expenses as aforesaid are to be paid by such member. The notice shall also state that in the event of non-payment of such call or instalment and such interest and expenses at or before the time and at the place appointed in the said notice, the shares in respect of which such call was made or instalment and such interest and expenses are payable will be liable to be forfeited.
(26) Forfeiture of shares in case notice not complied with.-If the member does riot pay such call, instalment, interest and expenses in compliance of such notice, any shares in respect of which such notice has been given, may at any time thereafter but before payment of such calls or instalments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board of Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and which have not actually paid to the member before the forfeiture of any such share.
(27) Service of notice after forfeiture.-When any share shall have been so forfeited, notice of the resolution of the Board of Directors shall be given to the member, in whose name it stood immediately prior to the forfeiture and on entry of the forfeiture with the date thereof, shall forthwith be made in the Register of Members but no forfeiture shall be invalidated in any manner by any omission or neglect to give or non-receipt of such notice or to make such entry in the Register of Members as aforesaid.
(28) Forfeited shares to become property of the company.-Any shares so forfeited shall be deemed to be property of the Company and the Board of Directors may sell, re-allot or otherwise dispose off the same in such manner as it thinks fit.
(29) Annulment of forfeiture of shares.-The Board of Directors may at any time before the sale, re-allotment or otherwise disposal of such forfeited share, cancel the forfeiture on such conditions as it thinks fit.
(30) Payment of arrears notwithstanding forfeiture.-Notwithstanding the forfeiture of the shares by the Company, the member whose shares have been forfeited shall remain liable to pay and shall forthwith pay to the Company all calls, instalments, interest and expenses, owing upon or in respect of such shares at the time of the forfeiture together with interest thereon, from the time of forfeiture until payment at 12 per cent per annum, and the Board of Directors may enforce the payment of such calls, instalments, interest and expenses from such member without any deduction or allowance for the amount by the member paid on such shares at the time of forfeiture but shall not be under any obligation to do so. The liability of such person shall cease if and when the Company shall have received payment in full of all such moneys in respect of the shares.
(31) Extinction of interest, claims and demands on forfeiture.-The forfeiture of a share shall involve the extinction of all interest in and also of all claims and demands against the Company in respect of the share and all other rights, incidental to the share, except only such of those rights as by these Articles are expressly saved.
(32) Evidence of forfeiture.-A duly verified declaration in writing that the declarant is a Director, the Manager or Secretary of the Company and that certain shares in the Company have been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the shares. The company may receive the consideration, if any, given for the shares on the sale or disposal thereof and may execute a transfer of the shares in favour of the person to whom the shares have been sold or disposed off and such person shall be registered as the holder of such shares and shall not be bound to see to the application of the purchase money nor shall his title to such shares be affected by any irregularity or invalidity in the proceeding in reference to such forfeiture, sale or disposal.
(33) Company's lien on shares.-The Company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of that share and all the shares (not being fully paid up) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof for moneys called or payable at a fixed time in respect of such shares solely or jointly with any other person to the Company whether the period for the payment thereof shall have actually arrived or not. The Company's lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise provided, the registration of a transfer of shares shall operate as a waiver of the Company's lien, if any, on such shares.
(34) Enforcement of lien by sale.-For the purpose of enforcing such lien, the Board of Directors may sell the shares subject thereto in such manner as it thinks fit, but no sale shall be made unless a sum in respect of which the lien exists is presently payable or until the expiration of fourteen days after a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the share or the persons entitled thereto by reason of his death or insolvency and default shall have been made by him or them in payment of moneys called in respect of such shares for fourteen days after such notice.
(35) Application of sale proceeds of shares.-The net proceeds of sale of such shares shall be received by the Company and applied in or towards payment of such part of the amount in respect of which the lien exists as is presently payable and residue, if any, shall subject to a like lien for sums not presently payable, as existed upon the shares before the sale, be paid to the person entitled to the shares at the date of the sale.
(36) Validity of sale of forfeited shares.-To give effect to sale of the forfeited shares, the Board of Directors may authorise some person to execute an instrument of transfer of the shares sold and cause the purchaser's name to be entered in the Register of Members in respect of the shares sold and the purchaser shall not be bound to see to the regularity of the proceedings nor to the application of the purchase money and after his name has been entered in the Register of Members in respect of such shares, the validity of the sale shall not be impeached by any person and such person aggrieved by the sale will have remedy in damages against the Company only.
(37) Cancellation of old certificates and issue of new certificates.-The certificate or certificates originally issued in respect of the relative share which has been sold, re-allotted or otherwise disposed off under the provisions of the preceding Articles, shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting member) stand cancelled and become null and void and of no effect and the Board of Directors shall be authorised to issue a new certificate or certificates in respect of the said shares to the person or persons entitled thereto distinguishing it or them in such manner as it thinks fit from the old certificate or certificates.
Transfer and Transmission of Shares
(38) Register of transfers.-The Company shall keep a register called the "Register of Transfers". The particulars of every transfer or transmission of any shares of the Company shall be fairly and distinctly entered therein.
(39) Transfer of shares.
(a) A share may be transferred by a member or other persons entitled to transfer the same to a nominee of the Board of Directors or any member selected by the transferor. However, no share shall be transferred to a person (unless he is a nominee of the Board of Directors) who is not already a member of this Company so long as any member of the Company is willing to purchase the same at fair value.
(b) Determination of fair value of share in case of difference.-If in case any difference arises between the proposing transferor and the purchasing members as to the fair value of the share, the Auditor shall on application of either party certify in writing the sum which in his opinion is the fair value, and in so certifying the fair value of the shares, the Auditor shall be considered to be acting as an expert and not as an arbitrator and accordingly the Arbitration Act, 1940 shall not apply.
(c) Board discretionary power to refuse transfer.-Save as aforesaid the Board may, in its absolute and uncontrolled discretion, refuse any proposed transfer of shares without assigning any reason.
(40) Title to shares of deceased members.-The executors, administrators or holders of a succession certificate or the legal representatives of a deceased member (not being one or two or more joint holders) shall be the only persons recognised by the Company as having any title to the shares registered in the name of such member and the Company shall not be bound to recognise such executors, administrators or holders of succession certificate or the legal representatives unless they shall have first obtained probate or letters of Administration or Succession Certificate or other legal representation, as the case may be, from a Court in India. However, the Board of Directors may in its absolute discretion dispense with the production of Probate, Letters of Administration or Succession Certificate upon such terms as to indemnify or otherwise as the Board of Directors in its absolute discretion may think necessary and register the name of any person who claims to be entitled to the shares standing in the name of a deceased member as a member.
(41) Registration of persons entitled to shares otherwise than by transfer.-Subject to the provisions of the preceding Articles, if any person becomes entitled to shares in consequence of the death, lunacy, bankruptcy or insolvency of any member or by any lawful means other than by transfer in accordance with these Articles, he may with the consent of the Board of Directors (which it shall not be under any obligation to give) upon producing such evidence that he sustains the character in respect of which he purports to act under these Articles or of his title as the Board of Directors thinks sufficient either get registered himself as the holder of the shares or elect to have some person nominated by him and approved by the Board of Directors registered as such holder; provided nevertheless that if such person shall elect to have his nominee registered, he shall testify the election by executing in favour of his nominee an instrument of transfer in accordance with the provisions herein contained and until he executes transfer deed and the nominee is registered as a member in the Register of Members, he shall continue to be liable in respect of the shares.
(42) Claimant to be entitled to same advantage.-The person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled as if he were registered holder of the share, except that he shall not, before being registered as a member in respect of the share, be entitled in respect of it, to exercise any right conferred by membership in relation to the meeting of the Company provided that the Board of Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer shares and if notice is not complied with within ninety days, the Board of Directors may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the share, until the requirements of the notice have been complied with.
(43) Instrument of transfer to remain with the company.-Every instrument of transfer which is registered by the Company shall remain in the custody of the Company, until destroyed by order of the Board of Directors.
(44) Fee for registration of probate, letter of administration, etc.-The Company shall be entitled to charge a fee not exceeding two rupees on the registration of every probate, letter of administration, certificate of death or marriage, power of attorney or other instrument.
(45) Fee for registration on transfer of shares.-For every transfer or transmission of share, there shall be paid to the Company the sum of Rs. 2 or such smaller sum as the Board of Directors may determine. The Board of Directors may in a particular case or generally waive the charging of such fees.
(46) Company not liable for disregard of notice in prohibiting registration of transfer.-The Company shall not be liable in consequence of its registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the register of members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the said shares notwithstanding that the Company may have had notice of such equitable right, title or interest to notice prohibiting registration.
Borrowing Powers of the Company
(47) Power of Directors to borrow from members or accept deposits from any person.-Subject to the provisions of sections 292 and 293 of the Act, and of these Articles, the Board of Directors may, from time to time at its discretion, by a resolution passed at a meeting of the Board, accept deposits from members either in advance of calls or otherwise and accept deposits from any person and generally raise or borrow or secure the payment of any sum or sums of money for purposes of the Company.