TaxTMI 
TaxTMI 
DISCLOSURES IN PROSPECTUS AND ABRIDGED PROSPECTUS FOR ISSUE OF INDIAN DEPOSITORY RECEIPTS
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....d (without payment of any additional fees), after incorporating therein changes, if any, suggested or specified by the Board. The updated draft prospectus shall be made public for a period of twenty one days from the date of its filing with the Board. (c) The contents of the prospectus including the financial statements of the issuing company, its subsidiaries and associates shall be in plain English. (d) The term "associate" for the purpose of this Schedule would mean "associate" as defined in Indian GAAP, or IFRS or US GAAP in which the financial statements of the issuing company are disclosed. (e) The prospectus shall contain all material information which shall be true and adequate so as to enable the investors to make informed decision on the investments in the issue. (f) The prospectus shall also contain the information and statements specified herein. (g) The issuing company shall, through a merchant banker file a prospectus certified by two authorized signatories of the issuing company, one of whom shall be a whole-time director and other the Chief Accounts Officer or the Chief Financial Officer, stating the particulars of the resolution of the Board or the s....
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....liance officer in relation to the issue of IDR. [The compliance officer should be placed in India]. (f) Name, address and contact information of stock exchanges where applications are made or proposed to be made for listing of the IDR; (g) Disclosure about provisions relating to punishment for fictitious applications; (h) Statement/declaration for refund of excess subscription (i) Statement that an interest of 15% p.a. would be paid to the investors if the allotments letters / refund orders are not despatched within fifteen days of the closure of the public issue (j) Declaration about issue of allotment letters/certificates/ IDR within the stipulated period; (k) Date of opening of issue; (l) Date of closing of issue; (m) Method and expected timetable of the issue (n) A statement that subscription to the issue shall be kept open for at least three working days and not more than ten working days (o) Date of earliest closing of the issue; (p) Declaration by the merchant banker with regard to adequacy of resources of underwriters to discharge their respective obligations, in case of being required to do so; (q) A statement by the issuing company that....
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....ue) providing details of important developments on three key areas: Operations & Management, Shareholding patterns and Business Environment, shall be mentioned. (7) MARKET PRICE INFORMATION AND OTHER INFORMATION CONCERNING THE SHARES IN THE DOMESTIC MARKET OF THE ISSUING COMPANY: The following information should be provided exchange-wise, if the securities are listed in more than one exchange. This information should be updated as on last available date before the date of prospectus. This information shall also b given if it is a further issue of IDR which are already listed in India: (a) Market price of shares for each quarter of the last three calendar years preceding the calendar year preceding the year of the issue of Prospectus (High, Low, Average Daily Trading Volume) (b) Market price of shares for each month of the calendar year preceding the year of the issue of prospectus (High, Low, Average Daily Trading Volume) (c) Market price of shares for the month preceding the date of prospectus (High, Low, Average Daily Trading Volume) (d) The opening and closing price on the last day of the month preceding the date of the prospectus along with the volume (8) DIVI....
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....ls regarding holdings of major shareholders i.e., the person or persons who are in over-all control of the company. (f) ^2[Different classes of shares based on different criteria, if any.] (14) FINANCIAL INFORMATION: ^3 [General Instructions: (1) The format of disclosure of financial results may be as per the disclosure requirements of the issuing company in the home country where the Issuing Company is listed. (2) The issuing company shall intimate to the investors in the offer document the type of disclosures that it will follow i.e. whether as per Indian GAAP, IFRS or US GAAP and any change in such format shall be informed to the IDR Holders by way of notices to the stock exchange. ] (a) The audited consolidated or unconsolidated financial statements, prepared in accordance with Indian GAAP (including all Accounting Standards issued by the Institute of Chartered Accountants of India) or with the International Financial Reporting Standards (IFRS) or US GAAP, for a period of three financial years immediately preceding the date of prospectus shall contain the following: (i) Report of Auditors on the Financial Statements (ii) Balance Sheets (iii) Statement....
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....ovided that if the gap between such date of latest audited financial statements and the date of opening of issue is 180 days or less, the requirement above shall be deemed to be complied with, if disclosures in respect of material changes in the financial position of issuing company for such gap are disclosed in the prospectus: Provided further that in case of an issuing company which is a foreign bank incorporated outside India and which is regulated by a member of the Bank for International Settlements or a member of the International Organization of Securities Commissions which is a signatory to a Multilateral Memorandum of Understanding, the requirement above, in respect of period beginning with last date of period for which the latest audited financial statements are made and the date of opening of the issue shall be satisfied, if the relevant financial statements are based on limited review report of such statutory auditor. (g) In case the issuing company opts to prepare and disclose the financial results as per US GAAP, a reconciliation statement vis-a-vis Indian GAAP and summary of significant differences between the Indian GAAP and US GAAP has to be annexed with the ....
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....AST FINANCIAL STATEMENTS AS DISCLOSED IN THE PROSPECTUS: A statement by the directors whether in their opinion there have arisen any circumstances since the date of the last financial statements as disclosed in the prospectus any which materially and adversely affect or is likely to affect the trading or profitability of the issuing company, or the value of its assets, or its ability to pay its liabilities within the next twelve months, and if so, an outline of such circumstances and an assessment of their likely impact. (16) MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL STATEMENTS (BY COMPARING THE RECENT FINANCIAL YEAR WITH THE PREVIOUS THREE FINANCIAL YEARS): (a) A summary of past financial results after adjustments as given in the auditors report for the past three years containing significant items of income and expenditure shall be given. (b) Overview of the business of the issuing company. (c) Factors that may affect results of the operations. (d) An analysis of reasons for the changes in significant items of income and expenditure shall also be given, inter alia, containing the following: (i) unusual or infrequent events or transaction; (ii) signi....
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....al (iv) Reserves (excluding revaluation reserve) (v) Sales (vi) Profit after tax (PAT) (vii) Earnings per share (EPS) and (viii) Net Asset Value (NAV) (b) If the subsidiaries and associates are not required to prepare such audited statements as per the laws prevailing in those countries, the same may be certified as true and correct by the Board of Directors and the management of such companies, provided a certificate from a certified public accountant or equivalent practicing in the concerned country is submitted to the Board. (20) MANAGEMENT: (a) Details with respect to the promoters and their background. If there are no identifiable promoters, then the details and background of all persons who hold 5% or more equity share capital of the issuing company.) (b) Details of the Board of Directors and the Key Managerial Personnel (i.e. name, address(es) of directors, manager, managing director or other principal officers of the issuing company, age, qualifications, industry experience, other directorships). (c) Remuneration of the Directors and the Key managerial personnel with detailed breakup, sitting fees, their relation with promoters / controlling sh....
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....rities. (26) TAXATION FRAMEWORK IN INDIA AND THE COUNTRY OF INCORPORATION/ WHERE SHARES ARE LISTED: Information relating to relevant provisions of taxation law, tax treaties and their impact for IDR holders. (27) OUTSTANDING LITIGATIONS AND DEFAULTS: (a) Material litigation / liabilities/defaults including arrears / potential liabilities of the issuing company, its promoters / controlling shareholders / directors and its subsidiaries and associates. (b) Materiality shall be determined on the basis of factors which are specific to the project and to the issuing company, its promoters / controlling shareholders / directors, its subsidiaries and associates, which may have a bearing on the performance of the issuing company. (c) Materiality shall be decided taking the following factors into account: (i) Some litigation/defaults may not be material individually but may be found material collectively. (ii) Some litigation/defaults may have material impact qualitatively instead of quantitatively. (iii) Some litigation/defaults may not be material at present but may be having a material impact in future. (28) BASIS OF ISSUE PRICE: (a) Earnings per share i.e. E....
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.... General Instructions: (1) The information to be provided under each of the heads specified below shall be as per the requirement of Part A of this Schedule except when specified otherwise. (2) The abridged prospectus shall be printed in a font size which shall not be visually smaller than Times New Roman Size 10. (3) The order in which items appear in the abridged prospectus shall correspond, as far as may be applicable, to the order in which items appear in the prospectus. (4) The application form shall be so positioned that on the tearing-off of the application form, no part of the information given in the abridged prospectus is mutilated. The abridged prospectus for the issue of Indian Depository Receipts (IDR) shall contain the following disclosures: (1) General Information: (a) The name of the issuing company and address of the registered office of the issuing company, along with telephone number, fax number, e-mail address and website address, and where there has been a change in the address of the registered office or name of the issuing company, details thereof. (b) Name, address and contact information of the registered office of the issuing compan....
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....bed and paid up capital (Number of instruments, description, aggregate nominal value). (b) Size of present issue. (c) Paid-up Capital: (i) before the issue; (ii) after the issue (if the IDR issue involves issue of fresh equity shares); and (iii) share premium account (before and after the issue) (d) Detailed notes to Capital Structure (e) ^4[Different classes of shares based on different criteria, if any.] (3) Terms of the Present Issue: (a) Authority for the issue, terms of payment and procedure and time schedule for allotment and issue of certificates/ refund orders. (b) The clause "Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders in case of public issues" shall appear. (4) Instructions for applicants: (a) How to apply, availability of prospectus, abridged prospectus and application forms, mode of payment and book building procedure, if relevant. (b) In the application form, the declaration relating to nationality and residentship shall be shown prominently as under: "Nationality and Residentship (Tick whichever is applicable) (i) I am / We are Indian National(s) resident in India and I am/we are not applying f....
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.... holders will be entitled. (f) Conversion procedure of IDR into shares (g) Governing Law regarding various aspects of IDR and transactions therein. (7) Company, Management and Project: (a) History and main objects and present business of the company. (b) Promoters / controlling shareholders and their background. (c) Names, address and occupation of manager, managing director, and other Directors (including nominee-directors and whole-time directors) giving their directorships in other companies. (d) Location of the project (e) Plant and machinery, technology, process, etc (f) Collaboration, any performance guarantee or assistance in marketing by the collaborators (g) Infrastructure facilities for raw materials and utilities like water, electricity, etc. (h) Schedule of implementation of the project and progress made so far, giving details of land acquisition, civil works, installation of plant and machinery, trial production, date of commercial production etc (i) Nature of the products/services and end users (j) Existing, licensed and installed capacity of the product, demand of the product-existing, and estimated in the coming years as estima....
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....the accounting ratios of the peer group (i.e., companies of comparable size in the same industry. (Indicate the source from which industry average and accounting ratios of the peer group has been taken) Provided that the projected earnings shall not be used as a justification for the issue price in the prospectus. Provided further that the accounting ratios disclosed in the prospectus in support of basis of the issue price shall be calculated after giving effect to the consequent increase in capital on account of compulsory conversions outstanding, as well as on the assumption that the options outstanding, if any, to subscribe for additional capital will be exercised. (h) The face value of shares (including the statement about the issue price being "X" times of the face value) and that of the IDR. The aggregate face value of the total equity shares underlying a single IDR also shall be given (10) Outstanding Material Litigations and Defaults (in a summarised tabular form): Material Litigation / Liabilities including arrears/Potential liabilities of the issuing company, its promoters / controlling shareholders / directors and its subsidiaries and associates. (11) Mate....
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....t of underwriters within sixty days from the date of closure of the issue, the issuing company shall forthwith refund the entire subscription amount received with interest to the subscribers at the rate of fifteen per cent. per annum for the period of delay beyond sixty days." (20) Information relating to relevant provisions of Taxation law, Tax Treaties and their impact for IDR holders." (21) Brief details of the Domestic Depositary, Overseas Custodian Bank and Depositary Agreement. (22) Information relating to statutory and regulatory approvals required in home country for the issue and the related aspects and their status, and approvals from Indian regulatory authorities. (23) Signatories to the Prospectus. PART C [See regulation ^5[101(5)]] FORMAT OF THE DUE DILIGENCE CERTIFICATE TO BE FILED BY THE LEAD MANAGER FOR IDR ISSUES To, Securities and Exchange Board of India Dear Sirs, Sub.: Issue of ................. (hereinafter referred to as 'IDR') by ............(hereinafter referred to as the 'issuing company') We, the undernoted, have been appointed as the Merchant Banker (hereinafter referred to as the 'Lead Merchant Banker') to the proposed....
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....e underwriters to fulfil their underwriting commitments. (7) We certify that the proposed activities of the Issuing Company for which the funds are being raised in the present issue fall within the 'main objects' listed in the object clause of the Memorandum of Association or other charter of the Issuing Company and that the activities which have been carried out until now are valid in terms of the object clause of its Memorandum of Association. (8) We confirm that necessary arrangements have been made to ensure that the moneys received pursuant to the issue are kept in a separate bank account and that such moneys shall be released by the said bank only, after permission, for listing of IDR, is obtained from all the stock exchanges mentioned in the prospectus. We further confirm that the agreement entered into between the bankers to the issue and the Issuing Company specifically contains this condition. (9) We certify that no payment in the nature of discount, commission, allowance or otherwise shall be made by the Issuing Company or the promoters, directly or indirectly, to any person who receives securities by way of firm allotment in the issue. (10) We certify that d....
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.... of relative sanction letters. (7) Underwriting letters from the proposed underwriters to the issue. (8) Audited Balance Sheets of the Issuing Company/Promoter companies for relevant periods. (9) Auditors certificate regarding tax-benefits available to the Issuing Company, shareholders and debenture holders. (10) Certificate from architects or any other competent authority on project implementation schedule furnished by the Issuing Company, if applicable. (11) Reports from Government agencies / expert agencies / consultants / Issuing Company regarding market demand and supply for the product, industry scenario, standing of the foreign collaborators, etc. (12) Documents in support of the infrastructural facilities, raw material availability, etc. (13) Auditors' Report for the period for which the accounts are disclosed in the offer document, indicating summary of audited accounts of the issuing company and also the summary of the audited accounts of the subsidiaries of the issuing company. (14) Stock Exchange quotations of the last 3 years duly certified by designated stock exchange. (15) Minutes of the general body meetings and board meetings of the I....