TaxTMI 
TaxTMI 
CONTENTS OF OFFER DOCUMENT
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....^4(Provided further that) in case of public issue by listed company, information in terms of clauses 6.8.3.2 (a) and (j) and clause 6.9.5.8 and information in terms of clause 6.10.3.1 in respect of entities not covered under section 370 (1)(B) of the Companies Act 1956 may not be disclosed in the prospectus, if the following conditions are fulfilled: (a) The issuer company has been filing periodic statements in regard to financial results and shareholding pattern with the Designated Stock Exchange and Registrar of Companies for the last three years and such statements are available on websites of the Designated Stock Exchange/ on a common e- filing platform. (b) The issuer company has in place an investor grievance handling mechanism which includes meeting of 'Shareholders' / Investors' Grievance Committee' at frequent intervals, appropriate delegation of power by the board of directors of the issuer company with regard to share transfer and clearly laid out systems and procedures for timely and satisfactory redressal of investor grievances. (c) The Lead Merchant Banker has certified compliance of (a) and (b) above. Provided further that where the issuer company is comp....
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....and investors should not invest any funds in this offer unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision, investors must rely on their own examination of the issuer and the offer including the risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document." Specific attention of investors shall be invited to the statement of 'Risk factors' by indicating their page number(s) in the 'General Risks'. (vi) The following clause on 'Issuer's Absolute Responsibility' clause shall be incorporated as under: "The issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this offer document contains all information with regard to the issuer and the issue, which is material in the context of the issue, that the information contained in the offer document is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intention....
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....erial impacts in future. 6.7.5 The Risk factors shall appear in the prospectus in the following manner: 6.7.5.1 Risks envisaged by Management. 6.7.5.2 Proposals, if any, to address the risks. 6.7.6 Any 'notes' required to be given prominence shall appear immediately after the Risk factors. 6.8 Introduction 6.8.1 Summary 6.8.1.1 Summary of the industry and business of the issuer company. 6.8.1.2 Offering details in brief. 6.8.1.3 Summary consolidated financial, operating and other data. 6.8.2 General Information 6.8.2.1 The name, address of registered office and the registration number of the issuer company, along with the address of the Registrar of Companies where the issuer company is registered. 6.8.2.2 The Board of Directors of the issuer company. 6.8.2.3 Brief details of the Chairman, Managing Director, Whole Time Directors, etc. of the issuer company. 6.8.2.4 The names, addresses, telephone numbers, fax numbers and e-mail addresses of the Company Secretary, Legal Advisor and Bankers to the Company. 6.8.2.5 The name, address, telephone number, fax number and e-mail address of the Compliance Officer. 6.8.2.6 The names, addresses, ....
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....elephone numbers, fax numbers and e-mail addresses of the underwriters and the amount underwritten by them. (b) Declaration by the Board of Directors of the issuer company that the underwriters have sufficient resources to discharge their respective obligations. 6.8.3 Capital Structure 6.8.3.1 The capital structure shall be presented in the following manner: (a) Authorised, issued, subscribed and paid up capital (Number of instruments, description and aggregate nominal value). (b) Size of the present issue, giving separately promoters' contribution, firm allotment/ reservation for specified categories and net offer to public (Number of instruments, description, aggregate nominal value and issue amount shall be given in that order; Name(s) of group companies to be given, in case reservation has been made for shareholders of the group companies; Applicable percentages may be given in case of book built issue). (c) Paid-up Capital: (i) After the issue. (ii) After conversion of securities (if applicable). (d) Share Premium Account (before and after the issue). 6.8.3.2 After the details of capital structure, the following notes shall be incorporated: (a)....
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....urities by promoters, directors and lead merchant bankers shall be disclosed. (g) Statement that an over-subscription to the extent of 10% of the net offer to public can be retained for the purpose of rounding off to the nearer multiple of minimum allotment lot. (h) A disclosure to the effect that the securities offered through this public/ rights issue shall be made fully paid up or may be forfeited within 12 months from the date of allotment of securities in the manner specified in clause 8.6.2 of these Guidelines. (i) A note stating that: (i) Unsubscribed portion in any reserved category may be added to any other reserved category. (ii) The unsubscribed portion, if any, after such inter se adjustments amongst the reserved categories shall be added back to the net offer to the public. (iii) In case of under-subscription in the net offer to the public portion spillover to the extent of under subscription shall be permitted from the reserved category to the net public offer portion. (j) Following details regarding major shareholders: (i) Names of the ten largest shareholders as on the date of filing of the prospectus with the Registrar of Companies. (ii) ....
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....in their professional capacity shall not be included in the Explanation. Explanation II: 'Promoter Group' shall include: (a) the promoter; (b) an immediate relative of the promoter (i.e., any spouse of that person, or any parent, brother, sister or child of the person or of the spouse); and (c) in case promoter is a company: (i) a subsidiary or holding company of that company; (ii) any company in which the promoter holds 10% or more of the equity capital or which holds 10% or more of the equity capital of the promoter; (iii) any company in which a group of individuals or companies or combinations thereof who holds 20% or more of the equity capital in that company also holds 20% or more of the equity capital of the issuer company; and (d) in case the promoter is an individual: (i) any company in which 10% or more of the share capital is held by the promoter or an immediate relative of the promoter or a firm or HUF in which the promoter or any one or more of his immediate relative is a member; (ii) any company in which a company specified in (i) above, holds 10% or more, of the share capital; (iii) any HUF or firm in which the aggregate share ....
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....sal shall be disclosed in the prospectus. (b) The prospectus shall contain the cost of the project and means of finance as per the appraisal report. (c) The revision, if any, in the project cost and the means of finance after the date of issue of the appraisal report shall be explained and disclosed. (d) The weaknesses and threats, if any, given in the appraisal report, shall be disclosed in the prospectus by way of risk factors. 6.8.4.5 Schedule of Implementation (a) 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. 6.8.4.6 Funds Deployed (a) Actual expenditure incurred on the project (in cases of companies raising capital for a project) upto a date not earlier than two months from the date of filing the prospectus with the Registrar of Companies, as certified by a Chartered Accountant. ^18((b) A cash flow statement showing funds which have been brought in as promoters' contribution and have been deployed prior to the public issue.) 6.8.4.7 Sources of Financing of Funds Already Deployed (a) Means....
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....the final price would be determined on the basis of the demand from the investors. 6.8.4.12 Tax Benefits (a) Any special tax benefits for the issuer company and its shareholders. 6.9 About the Issuer Company 6.9.1 Industry Overview 6.9.2 Business Overview 6.9.2.1 Details of the business of the issuer company (a) Location of the project (b) Plant, machinery, technology, process, etc.: (i) Details in a tabular form to be given shall include the machines required to be bought by the issuer company, cost of the machines, name of the suppliers, the date of placement of order and the date/ expected date of supply. (ii) In case of machines yet to be delivered, the date of quotations relied upon for the cost estimates given, shall also be mentioned. (iii) Percentage and value terms the plant and machinery for which orders are yet to be placed shall be stated and also be given by way of a risk factor. (iv) Details of second hand machinery bought/ proposed to be bought, if any, including the age of the machines, balance estimated life, etc. shall also be given. (c) Collaborations, any performance guarantee or assistance in marketing by the collaborators....
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....escriptions and occupations of the vendors; (ii) the amount paid or payable in cash, shares or debentures to the vendor and, where there is more than one separate vendor, or the company is a sub purchaser, the amount so paid or payable to each vendor, specifying separately the amount, if any, paid or payable for goodwill; (iii) the nature of the title or interest in such property acquired or to be acquired by the issuer company; (iv) short particulars of every transaction relating to the property completed within the two preceding years, in which any vendor of the property to the company or any person who is, or was at the time of the transaction, a promoter, or a director or proposed director of the company had any interest, direct or indirect, specifying the date of the transaction and the name of such promoter, director or proposed director and stating the amount payable by or to such vendor, promoter, director or proposed director in respect of the transaction. (b) The property to which sub-clause (a) applies is a property purchased or acquired by the issuer company or proposed to be purchased or acquired, which is to be paid for wholly or partly out of the proceeds....
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....pectus. (b) All such contracts shall be included in the list of material contracts required under clause 6.15.1. 6.9.5.3 Compliance with Corporate Governance requirements. 6.9.5.4 Shareholding of Directors, including details of qualification shares held by them, whereever applicable. 6.9.5.5 Interest of directors (a) Full particulars of the nature and extent of the interest, if any, of every Director: (i) in the promotion of the issuer company; or (ii) in any property acquired by the issuer company within two years of the date of the prospectus or proposed to be acquired by it. (b) Where the interest of such a director consists in being a member of a firm or company, the nature and extent of the interest of the firm or company, with a statement of all sums paid or agreed to be paid to him or to the firm or company in cash or shares or otherwise by any person either to induce him to become, or to qualify him as, a director, or otherwise for services rendered by him or by the firm or company, in connection with the promotion or formation of the issuer company shall be disclosed. 6.9.5.6 Change, if any, in the directors during the last three years, and reaso....
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....ters have been submitted to the Stock Exchanges on which securities are proposed to be listed, at the time of filing the draft prospectus with them. ^20(Provided that nothing contained in sub-clause (b) shall apply to a fast track issue.) 6.9.6.2 Where the promoters are companies: (a) History of the companies and the promoters of the companies shall be furnished. (b) Details in change of management of the companies, if any, including details of the persons who are holding the controlling interest together with the applicability and compliance of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. (c) A declaration, confirming that the Permanent Account Numbers, Bank Account Numbers, the Company Registration Numbers and the addresses of the Registrars of Companies where the companies are registered have been submitted to the Stock Exchanges on which securities are proposed to be listed, at the time of filing the draft prospectus with them. ^21(Provided that nothing contained in sub-clause (c) shall apply to a fast track issue.) 6.9.6.3 Common pursuits 6.9.6.4 Full particulars of the nature and extent of ....
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....ies position as at the end of that period together with a certificate from the auditors that such accounts have been examined and found correct by them. The said statement may indicate the nature of provision or adjustments made or are yet to be made). 6.10.2.2 If the issuer company has no subsidiaries, the report shall: (a) so far as regards profits and losses, deal with the profits or losses of the issuer company (distinguishing items of a non- recurring nature) for each of the five financial years immediately preceding the issue of the prospectus; and (b) so far as regards assets and liabilities, deal with the assets and liabilities of the issuer company at the last date to which the accounts of the issuer company were made up. 6.10.2.3 If the issuer company has subsidiaries, the report shall: (a) so far as regards profits and losses, deal separately with the issuer company's profits or losses as provided by 6.10.2.2 and in addition, deal either: (i) as a whole with the combined profits or losses of its subsidiaries, so far as they concern the members of the issuer company; or (ii) individually with the profits or losses of each subsidiary, so far as they co....
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....e for each of the five financial years immediately preceding the issue of the prospectus; and (ii) the assets and liabilities of the other body corporate at the last date to which its accounts were made up. (b) The said report shall: (i) indicate how the profits or losses of the other body corporate dealt with by the report would, in respect of the shares to acquired, have concerned members of the issuer company and what allowance would have fallen to be made, in relation to assets and liabilities so dealt with for holders of other shares, if the issuer company had at all material times held the shares to be acquired; and (ii) where the other body corporate has subsidiaries, deal with the profits or losses and the assets and liabilities of the body corporate and its subsidiaries in the manner provided by sub-clause (a) (ii) above in relation to the issuer company and its subsidiaries. 6.10.2.6 Principal terms of loan and assets charged as security. 6.10.2.7 Other provisions relating to accounts of the issuer company: (a) All significant accounting policies and standards followed in the preparation of the financial statements shall be disclosed. (b) Sta....
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....on-recurring, or has arisen out of business activities/ other than the normal business activities. (e) Changes (with quantification, wherever possible) in the activities of the issuer company which may have had a material effect on the statement of profit/ loss for the five years, Including discontinuance of lines of business, loss of agencies or markets and similar factors. (f) Accounting and other ratios: (i) The following accounting ratios shall be given for each of the accounting periods for which financial information is given. a. Earnings per Share: This ratio shall be calculated after excluding extra ordinary items. b. Return on net worth: This ratio shall be calculated excluding revaluation reserves. c. Net Asset Value per share. This ratio shall be calculated excluding revaluation reserves. (ii) 'Accounting and other Ratios' shall be based on the Financial Statements prepared on the basis of Indian Accounting Standards. (g) Capitalisation Statement: (i) A Capitalisation Statement showing total debt, net worth, and the debt/ equity ratios before and after the issue is made shall be incorporated. (ii) In case of any change in the share capital s....
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....nths with suitable disclosures for changes in capital structure during the period and the market value on the date of filing the prospectus with the Registrar of Companies. (j) If any of the companies has made public or rights issue in the preceding three years, the issue price of the security, the current market price and particulars of changes in the capital structure, if any, since the date of issue and a statement regarding the cost and progress of implementation of the project in comparison with the cost and implementation schedule given in the prospectus. (k) Information regarding adverse factors related to the company and in particular regarding: (i) whether the company has become a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 or is under winding up. (ii) whether the company has made a loss in the immediately preceding year and if so, the profit or loss figures for the immediately preceding three years. ^22(Provided that nothing contained in this clause shall apply to an issue made by any government company, statutory authority or corporation or any special purpose vehicle set up by any of them.) 6.10.3.2 I....
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....fect Results of the Operations. 6.10.5.4 Discussion on Results of Operations: 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. 6.10.5.5 Comparison of recent Financial Year with the Previous Financial Years (last three years) on the major heads of the Profit & Loss Statement: (a) 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 transactions. (ii) significant economic changes that materially affected or are likely to affect income from continuing operations. (iii) known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations. (iv) future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known. (v) the extent to which material increases in net sales or revenue are due to increased sales volume, ....
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....s; and 6.11.1.2 The information about outstanding litigations as per clause 6.11.1.1 (e) shall be furnished in respect of subsidiaries of the issuer company (if applicable). 6.11.1.3 Outstanding litigations involving the promoter and group companies: (a) All pending litigations in which the promoters are involved, defaults to the financial institutions/ banks, non-payment of statutory dues and dues towards instrument holders like debenture holders, fixed deposits, and arrears on cumulative preference shares by the promoters and the companies/ firms promoted by the promoters, shall be listed in the prospectus together with the amounts involved and the present status of such litigations/ defaults. The likely adverse effect of these litigations/ defaults, etc. on the financial performance of the issuer company shall also be mentioned. (b) Further, the cases of pending litigations, defaults, etc. in respect of companies/ firms/ ventures with which the promoters were associated in the past but are no longer associated shall also be disclosed in case their name(s) continues to be associated with particular litigation(s). (c) Further, all the litigations against the promote....
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....lause: (a) A prospectus shall contain the following disclaimer clause in bold capital letters: "It is to be distinctly understood that submission of offer document to SEBI should not in any way be deemed or construed that the same has been cleared or approved by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the issue is proposed to be made or for the correctness of the statements made or opinions expressed in the offer document. Lead Merchant Banker, ______________ has certified that the disclosures made in the offer document are generally adequate and are in conformity with SEBI (Disclosures and Investor Protection) Guidelines in force for the time being. This requirement is to facilitate investors to take an informed decision for making investment in the proposed issue. It should also be clearly understood that while the Issuer Company is primarily responsible for the correctness, adequacy and disclosure of all relevant information in the offer document, the Lead Merchant Banker is expected to exercise Due Diligence to ensure that the Company discharges its responsibility adequately in this behalf an....
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....Bankers 6.12.14.5 Registrars to the issue. 6.12.14.6 Advisors. 6.12.14.7 Bankers to issues 6.12.14.8 Trustees for the debenture-holders. 6.12.14.9 Others 6.12.15 Underwriting commission, brokerage and selling commission. 6.12.16 Previous public or rights issues, if any (during the last five years): 6.12.16.1 Closing Date. 6.12.16.2 Date of allotment. 6.12.16.3 Date of refunds. 6.12.16.4 Date of listing on the stock exchange. 6.12.16.5 If the issue (s) at premium or discount and the amount thereof. 6.12.16.6 The amount paid or payable by way of premium, if any, on each share which had been issued within the two years preceding the date of the prospectus or is to be issued, stating the dates or proposed dates of issue and, where some shares have been or are to be issued at a premium and other shares of the same class at a lower premium, or at par or at a discount, the reasons for the differentiation and how any premiums received have been or are to be disposed of. 6.12.17 Previous issues of shares otherwise than for cash. 6.12.18 Commission or brokerage on previous issues. 6.12.19 Following particulars in regard to the issuer company an....
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....change during said period of (i) and (ii) above; (d) the stock market data referred to above shall be shown separately for periods marked by a change in capital structure, with such period commencing from the date the concerned stock exchange recognises the change in the capital structure (e.g. when the shares have become ex-rights or ex-bonus); (e) the market price immediately after the date on which the resolution of the Board of Directors approving the issue was approved; (f) the volume of securities traded in each month during the six months preceding the date on which the prospectus is filed with ROC; and (g) to volume of business transacted along with high, low and average prices of shares of the issuer company shall also be stated for respective periods. 6.12.23 Mechanism evolved for redressal of investor grievances 6.12.23.1 The prospectus shall disclose the arrangements or any mechanism evolved by the issuer company for redressal of investor grievances. 6.12.23.2 The issuer company shall disclose the time normally taken by it for disposal of various types of investor grievances. 6.12.23.3 Similar disclosure shall be made in regard to the listed comp....
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....for sale. (e) Public issues by infrastructure companies: The requirement of minimum subscription shall not be applicable to an eligible infrastructure company, provided disclosures regarding the alternate source of funding is made in the prospectus. 6.13.1.8 Arrangements for Disposal of Odd Lots: (a) Any arrangements made by the issuer company for providing liquidity for and consolidation of the shares held in odd lots, particularly when such odd lots arise on account of issues by way of rights, bonus, conversion of debentures/ warrants etc., shall be intimated to the shareholders/ investors. (b) The issuer company is free to make arrangements for providing liquidity in respect of odd lot shares through any investment or finance company, broking firms or through any other agency and the particulars of such arrangement, if any, may be disclosed in the prospectus related to the concerned issue of capital. (c) The Lead Merchant Banker shall ascertain whether the issuer company coming for fresh issue of capital proposes to set up trusts in order to provide service to the investors in the matter of disposal of odd lot shares of the issuer company held by them and if so, d....
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....(i) The Lead Merchant Banker shall ensure disclosures regarding details of Application Supported by Blocked Amount process including specific instructions for submitting Application Supported by Blocked Amount.) 6.13.2.4 Escrow mechanism: (a) Escrow A/c. of the issuer company. (c) Escrow A/c. of the syndicate member. 6.13.2.5 Terms of payment and payment into the Escrow Collection Account. 6.13.2.6 Electronic registration of bids. 6.13.2.7 Build up of the book and revision of bids. 6.13.2.8 Price discovery and allocation. 6.13.2.9 Signing of underwriting agreement. 6.13.2.10 Filing of prospectus with the Registrar of Companies. 6.13.2.11 Announcement of Pre-Issue Advertisement. 6.13.2.12 Issuance of Confirmation of Allocation note ("CAN") and Allotment in the Issue. 6.13.2.13 Designated date. 6.13.2.14 General instructions: (a) Do's and don'ts. (b) Instructions for completing the Bid form. ^30((c) Bidders' bank account details.) (d) Bids by NRIs or FIIs on a repatriation basis. 6.13.2.15 Payment instructions: (a) Payment into escrow account of the issuer company. (b) Payment into escrow account of the syndicate member. ....
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....n other cases, (subject however to postal rules); and (c) In case of any category of applicants specified by the Board - crediting of refunds to the applicants in any other electronic manner permissible under the banking laws for the time being in force which is permitted by the Board from time to time.) 6.13.2.26 Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders ^36/instruction to Self Certified Syndicate Banks by the Registrar) in Case of Public Issues: The caption "Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders in Case of Public Issues" shall appear and shall contain the following statement: (a) Where it is a fixed price issue: "The company agrees that as far as possible allotment of securities offered to the public shall be made within 30 days of the closure of public issue. The company further agrees that it shall pay interest @15% per annum if the allotment letters/ refund orders have not been despatched to the applicants ^37(or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner) within 30 day....
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....l be made till the securities offered through this prospectus are listed or till the application moneys are refunded on account of non-listing, under subscription, etc. ^41(viii) that adequate arrangements shall be made to collect all Applications Supported by Blocked Amount (ASBA) and to consider them similar to non-ASBA applications while finalizing the basis of allotment.) (b) In case of a debenture issue, the issuer company shall also give undertakings to the following effect in the prospectus: (i) that the issuer company shall forward the details of utilisation of the funds raised through the debentures duly certified by the statutory auditors of the issuer company, to the debenture trustees at the end of each half-year. (ii) that the issuer company shall disclose the complete name and address of the debenture trustee in the annual report. (iii) that the issuer company shall provide a compliance certificate to the debenture holders (on yearly basis) in respect of compliance with the terms and conditions of issue of debentures as contained in the prospectus, duly certified by the debenture trustee. (iv) that the issuer company shall furnish a confirmation cert....
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.... regarding voting, dividend, lien on shares and the process for modification of such rights and forfeiture of shares. 6.14.2 Main provisions of the Articles of Association. 6.15 Other Information 6.15.1 List of material contracts and inspection of documents for inspection: 6.15.1.1 Material contracts. 6.15.1.2 Documents. 6.15.1.3 Time and place at which the contracts, together with documents, will be available for inspection from the date of prospectus until the date of closing of the subscription list. 6.15.2 Declaration ^43((a) The draft prospectus (in case of issues other than fast track issues), red herring prospectus and prospectus shall be approved by the Board of Directors of the issuer and shall be signed by all Directors, the Chief Executive Officer, i.e., the Managing Director or Manager within the meaning of the Companies Act, 1956 and the Chief Financial Officer, i.e., the whole-time Finance Director or any other person heading the finance function and discharging that function. (b) The signatories shall further certify that all disclosures made in the prospectus are true and correct.) ^44(SECTION II - CONTENTS OF ABRIDGED PROSPECTUS 6.1....
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....y auditors. 6.17.13 Rating for the proposed debenture/ preference shares issue, if any, obtained from the credit rating agencies. 6.17.14 Name and address of the underwriters and the amount underwritten by them, if applicable. 6.17.15 (a) Name, address, telephone number, fax number and email address of the Compliance Officer. (b) Investor's attention shall be invited to contact the Compliance Officer in case of any pre-issue/ post-issue related problems such as non-receipt of letters of allotment/ share certificates/ credit of securities in depositories beneficiary account/ refund orders, etc. 6.17.16 Provisions of sub section (1) of Section 68A of the Companies Act, 1956 relating to punishment for impersonation. 6.17.17 Declaration about the issue of allotment letters/ refunds within a period of 30 days and interest in case of delay in dispatching refund/ allotment letters @ 15% per annum or at the rate as may be specified. 6.17.18 Risk Factors and proposals to address the same. 6.18 Capital Structure of the issuer company 6.18.1 Following details to be furnished: a. Authorised, issued, subscribed and paid up capital (Number of instruments, descrip....
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....egend shall be printed in a box: "Attention NRI Applicants: Payment must be made through their Non Resident External (NRE) / Foreign Currency Non Resident (FCNR) accounts or through cheques / drafts sent from abroad and drawn on convertible rupee accounts in India. Forms accompanied by cheques drawn on NR (O) accounts are liable to be rejected". d. Attention of NRIs shall be invited to the following: i. the name and address of at least one place in India from where individual NRI applicants can obtain the application forms. ii. Such applications as are accompanied by payment in free foreign exchange shall be considered for allotment under the reserved category. iii. Such NRIs who wish to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians and shall not use the form meant for reserved category. As regards applications in case of reservations to NRIs, a disclosure is to be made incorporating the fact that payment for such allotments shall come through external source only and that payments through NRO account will not be permitted. e. The application form should contain necessary instructions/ provisions for the fo....
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....business of the company. 6.21.2 Promoters and their background. 6.21.3 Names, address and occupation of manager, managing director, and other Directors (including nominee-directors and whole-time directors) giving their directorships in other companies. 6.21.4 Location of the project 6.21.5 Plant and machinery, technology, process, etc 6.21.6 Collaboration, any performance guarantee or assistance in marketing by the collaborators 6.21.7 Infrastructure facilities for raw materials and utilities like water, electricity, etc. 6.21.8 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. 6.21.9 Products/Services 6.21.9.1 Nature of the products/services and end users 6.21.9.2 Existing, licensed and installed capacity of the product, demand of the product-existing, and estimated in the coming years as estimates by a Government authority or by any other reliable institution, giving source of the information. In case the company is providing services, relevant information in regard to nature/ extent of services....
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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 offer document. Provided further that the accounting ratios disclosed in the offer documents 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) 6.24 Outstanding Litigations and Defaults (in a summarised tabular form) 6.24.1 Whether all payment/refunds, debentures, deposits of banks or companies, interest on deposits, debenture interest, institutional dues have been paid up to date. If not, details of the arrears, if any, to be stated. 6.25 Material Development: Any material development after the date of the latest balance sh....
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....omes liable to pay the amount, the company shall pay interest prescribed under Section 73 of the Companies Act 1956." 6.33.22 For Composite Issues i. The Lead Merchant Banker shall ensure that the requirement of "minimum subscription" is satisfied both jointly and severally, i.e., independently for both rights and public issues. ii. If the company does not receive the minimum subscription in either of the issues the company shall refund the entire subscription received. 6.34 Signatories to the Offer Document.) ^54(SECTION III - CONTENTS OF THE LETTER OF OFFER 6.39 A listed issuer company making a rights issue shall make disclosures, as specified in clause 6.42, in the letter of offer, if it satisfies the following conditions: (a) the issuer company has been filing periodic reports, statements and information in compliance with the listing agreement for the last three years immediately preceding the date of filing of the letter of offer with the designated stock exchange, in case of a fast track issue and in any other case, the date of filing of the draft letter of offer with the Board; (b) the reports, statements and information referred to in sub-clause (a)....
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....The nature, number, price and amount of the instruments offered and issue size, as may be applicable. d. The following clause on general risk : "Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision, investors must rely on their own examination of the issuer company and the offer including the risks involved. The securities being offered in the issue have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document." Specific attention of investors shall be invited to the statement of "Risk factors" given on page number(s) ..... under the section "General Risks". e. The following clause on 'Issuer's Absolute Responsibility' shall be incorporated in a box format: "The issuer company, having made all reasonable inquiries, accepts responsibility for and confirms that this letter of offer contains a....
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....impact which is qualitative though not quantitative. (c) Some risks may not be material at the time of making the disclosures in the letter of offer but may have a material impact in the future. 6.42.4.4 The risk factors shall appear in the letter of offer in the following manner: (a) The risks envisaged by the management. (b) The proposals, if any, to address the risks and the manner in which the same are proposed to be addressed. 6.42.4.5 The proposals to address risks shall not contain any speculative statement on the positive outcome to any litigation, etc. 6.42.4.6 The proposals to address risks shall not be given for any matter that is sub-judice before any Court or Tribunal. 6.42.4.7 The risk factors shall be disclosed in the descending order of materiality. Wherever risks about material impact are stated, the financial and other implications of the same shall be disclosed. If it cannot be quantified, a distinct statement about the fact that the implications cannot be quantified shall be made. 6.42.5 Prominent notes 6.42.5.1 This section shall contain notes which are required to be given prominence and shall also include the following: (a) The n....
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....e market through a convertible debt instrument. (f) The names, addresses, telephone numbers, fax numbers, website addresses and e-mail addresses of the trustees under debenture trust deed, in case of a rights issue of convertible debt instruments. (g) The name of the monitoring agency, if applicable. (h) The name, address, telephone number and e-mail address of the appraising entity, in case the project has been appraised. (i) The details of underwriting, if any: (i) The names, address, telephone numbers, fax numbers and e-mail address of the underwriters and the amount underwritten by them. (ii) A declaration by the board of directors of the issuer company that the underwriters have sufficient resources to discharge their respective obligations. (iii) In case of partial underwriting of the issue, the extent of underwriting. (iv) The details of final underwriting arrangement, indicating actual number of securities underwritten, in the letter of offer before it is filed with the designated stock exchange. (j) The principal terms of loan and assets charged as security. 6.42.6.3 Capital Structure (a) The authorised, issued and subscribed capital ....
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....ional disclosures shall be made: (i) Basis of estimation of working capital requirement, along with relevant assumptions. (ii) Reasons for raising additional working capital, substantiating the same with relevant facts and figures. (iii) Details of the projected working capital requirement including detailed assessment of working capital after implementation of the project or achievement of objects of the issue, as the case may be, capacity utilisation assumptions, break-up of expected current assets into raw materials, finished goods, work in progress, sundry debtors etc., along with the assumption about the holding norms for each type of current asset, total current liabilities, net current assets and envisaged sources of finance for net current assets, i.e., bank finance, institutional finance, own funds, etc. (iv) The total envisaged working capital requirement in a tabular form, the margin money thereof and the portion to be financed by any bank(s) or otherwise. (v) A complete perspective on the present working capital position vis-àvis the projected working capital position based on which the money is proposed to be raised in the public issue. (vi) De....
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....sue of the letter of offer; and b. the assets and liabilities of the business at the last date to which the accounts of the business were made up, being a date not more than six months before the date of the issue of the letter of offer. (g) If: (i) the proceeds, or any part of the proceeds, of the issue of the shares or debentures are or is to be applied directly or indirectly in any manner resulting in the acquisition by the issuer company of shares in any other body corporate; and (iii) by reason of that acquisition or anything to be done in consequence thereof or in connection therewith, that body corporate will become a subsidiary of the issuer company; a report made by accountants (who shall be named in the letter of offer) upon: a. the profits or losses of the other body corporate for each of the five financial years immediately preceding the issue of the Letter of Offer; and b. the assets and liabilities of the other body corporate at the last date to which its accounts were made up. (h) Strategic partners, if applicable, to the project / objects of the issue. (i) Financial partners, if applicable to the project / objects of the issue. 6.....
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....oject. 6.42.7.9 Interim Use of Funds (a) Investment avenues in which the management proposes to deploy issue proceeds, pending its utilisation in the proposed project. 6.42.7.10 Any special tax benefits for the issuer company and its shareholders. 6.42.7.11 Key Industry Regulations for the proposed objects of the issue (if different from existing business of the issuer company). 6.42.7.12 Interest of promoters and directors, as applicable to the project or objects of the issue. 6.42.8 History and Corporate Structure about the Issuer company 6.42.8.1 In case the issuer company has not come out with any issue in the past ten years or more, a brief statement about the history and corporate structure of the issuer company, the main objects of the issuer company and major events in the past. 6.42.9 Management (Board of Directors) 6.42.9.1 Name, age, qualifications, Director Identification Number, experience, address, occupation and date of expiration of the current term of office of manager, managing director, and other directors (including nominee directors, whole-time directors), giving their directorships in other companies. 6.42.9.2 The nature of any fa....
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....a. Sales / turnover b. Other income (ii) Estimated gross profit / loss (excluding depreciation and taxes). (iii) a. Provision for depreciation b. Provision for taxes. (iv) Estimated net profit / loss. (b) Material changes and commitments, if any affecting financial position of the issuer company. (c) Week-end prices for the last four weeks; current market price; and highest and lowest prices of equity shares during the period with the relative dates. 6.42.10.3 Stock market quotation of shares/ convertible instruments of the company (high/ low price in each of the last three years and monthly high/low price during the last six months). 6.42.10.4 Accounting and other ratios: (a) The following accounting ratios shall be given for each of the accounting periods for which financial information is given: (i) Earnings per share: This ratio shall be calculated after excluding extra ordinary items. (ii) Return on Networth: This ratio shall be calculated excluding revaluation reserves. (iii) Net Asset Value per share: This ratio shall be calculated excluding revaluation reserves. (b) Accounting and other ratios shall be based on the financial stateme....
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.... as per last completed financial year; or b. Where the decision in one case is likely to affect the decision in similar cases, even though the amount involved in single case individually may not exceed one per cent. of the net worth of the issuer company as per the last completed financial year. (ii) For the outstanding litigations which may have any impact on the future revenues, the disclosure is required: a. Where the aggregate amount involved in such individual litigation is likely to exceed one per cent. of the total revenue of the issuer company as per last completed financial year; or b. Where the decision in one case is likely to affect the decision in similar cases, even though the amount involved in single case individually may not exceed one per cent of the total revenue of the issuer company, if similar cases put together collectively exceed one per cent. of total revenue of the issuer company as per last completed financial year. (d) These disclosures shall be made in respect of the issuer company and the subsidiary companies of the issuer company whose financial statements are included in the offer document, either separately or in consolidated fo....
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....uirements) Regulations, 2009 in force for the time being. This requirement is to facilitate investors to take an informed decision for making investment in the proposed issue. It should also be clearly understood that while the issuer company is primarily responsible for the correctness, adequacy and disclosure of all relevant information in the letter of offer, the lead merchant banker is expected to exercise due diligence to ensure that the issuer company discharges its responsibility adequately in this behalf and towards this purpose, the lead merchant banker _______________________ has furnished to the Securities and Exchange Board of India (SEBI) a due diligence certificate dated ________________ (which reads as follows: (due diligence certificate submitted to the Board to be reproduced here) The filing of the letter of offer does not, however, absolve the issuer company from any liabilities under section 63 or section 68 of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearances as may be required for the purpose of the proposed issue. SEBI further reserves the right to take up, at any point of time, with the lead merchant banker any....
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....owing: (a) Applications by mutual funds: (ii) The necessary disclosures under the heads "Procedure for applications by mutual funds" and "Multiple Applications" shall be incorporated to indicate that a separate application can be made in respect of each scheme of an Indian mutual fund registered with the Board and that such applications shall not be treated as multiple applications. (iii) A disclosure that the applications made by asset management companies or custodians of a mutual fund shall clearly indicate the name of the concerned scheme for which application is being made. (b) Applications by non-resident Indians: The following disclosures shall be made: (i) The name and address of at least one place in India from where individual non-resident Indian applicants can obtain the application forms. (ii) A statement that: "non-resident Indian applicants may please note that only such applications as are accompanied by payment in free foreign exchange shall be considered for allotment under the reserved category. The non-resident Indians who intend to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians and shall ....
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.... of funds by using ECS (Electronic Clearing Service), Direct Credit, RTGS (Real Time Gross Settlement) or NEFT (National Electronic Funds Transfer), as is for the time being permitted by the Reserve Bank of India; (e) In case of other applicants: by despatch of refund orders by registered post, where the value is Rs. 1500/- or more, or under certificate of posting in other cases, (subject however to postal rules); and (f) In case of any category of applicants specified by the Board: crediting of refunds to the applicants in any other electronic manner permissible under the banking laws for the time being in force which is permitted by the Board from time to time. 6.42.17 Undertakings by the issuer company in connection with the issue 6.42.17.1 The issuer company shall undertake that: (a) the complaints received in respect of the Issue shall be attended to by the issuer company expeditiously and satisfactorily. (b) that steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the securities are to be listed are taken within seven working days of finalisation of basis of allotment. (c) funds requ....
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....balance sheet of the issuer company indicating the purpose for which such monies had been utilised; and (c) details of all unutilised monies out of the issue of shares referred to in sub-clause (a) shall be disclosed under an appropriate separate head in the balance sheet of the issuer company indicating the form in which such unutilised monies have been invested. 6.42.19 Restrictions on foreign ownership of Indian securities, if any 6.42.19.1 Investment by NRIs. 6.42.19.2 Investment by FIIs. 6.42.20 Statement regarding minimum subscription clause 6.42.20.1 The following statements shall appear in the letter of offer: (a) "If the issuer company does not receive the minimum subscription of ninety per cent. of the issue (including devolvement of underwriters where applicable), the entire subscription shall be refunded to the applicants within fifteen days from the date of closure of the issue." (b) "If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. fifteen days after closure of the issue), the issuer company will pay interest for the delayed period, at rates prescribed unde....
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.....39 (a) and 6.39 (b) are satisfied, clauses 6.18.2, 6.19.3, 6.21, 6.22, 6.23, 6.26, 6.27, 6.30, 6.31 and 6.32, specified under Section II of this Chapter shall not apply to the abridged letter of offer. 6.45 The order in which items shall appear in the abridged letter of offer shall correspond, wherever applicable, to the order in which items appear in the letter of offer. 6.46 The abridged letter of offer shall also include the following disclosures: (a) Provisions pertaining to applications referred to in clause 5.11; (b) Rights entitlement ratio; (c) Fractional entitlements; (d) Renunciation; (e) Application for Additional equity shares; (f) Intention of promoters to subscribe to their rights entitlement; (g) Statement that a copy of the offer document of the immediately preceding public or rights issue is made available to the public as specified under clause 5.6.2(ii) and also as a document for public inspection." ***** 1 Substituted for Section I of Chapter VI, vide SEBI Circular No. SEBI/CFD/DIL/DIP/14/2005/25/1 dated January 25, 2005. The text of Section I, prior to this substitution, is given at the end of these Guideline....
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....ide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007. 19 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007 20 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007. 21 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007. 22 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007. 23 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007. 24 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007. 25 Inserted proviso, vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007 26 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/19/2006/31/3 dated March 31, 2006. 27 Inserted sub-clause, vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007. 28 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007 for the following: "in accordance with SEBI (Merchant Bankers) Regulations 1992 which reads as follows: (i) We have examined various documents including those ....
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....ng clause shall be incorporated in the prospectus: "The company shall ensure despatch of refund orders of value over Rs. 1500/- and share/ debenture certificates by Registered Post only and adequate funds for the purpose shall be made available to the Registrars by the issuer company "." 36 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/31/2008/30/7 dated July 30, 2008. 37 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/18/2006/20/1 dated January 20, 2006. 38 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/18/2006/20/1 dated January 20, 2006. 39 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/18/2006/20/1 dated January 20, 2006 for the following: "that the funds required for despatch of refund orders/ allotment letters/ certificates by registered post shall be made available to the Registrar to the Issue by the issuer company." 40 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/18/2006/20/1 dated January 20, 2006. 41 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/31/2008/30/7 dated July 30, 2008. 42 Inserted proviso, vide SEBI Circular No. SEBI/CFD/DIL/DIP/18/2006/28/1 dated November 28, 2007. 43 Substituted sub-clause, vide SEBI Circular No....
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.... the requirements and shall contain the disclosures as specified under Section I of this Chapter.) Provided that nothing contained in clauses 6.8.2.2, 6.8.2.3, sub-clauses (a), (b), (c), (d) and (e) of clause 6.8.3.2, clauses 6.8.4.12, 6.9.2.1, 6.9.2.2, 6.9.2.3, 6.9.2.4, 6.9.4, 6.9.6, 6.10.3, 6.12.16, 6.12.17, 6.12.18, 6.12.20 and 6.12.21 shall apply to a rights issue falling under 2.1.2A.1.) (Provided further that) information in terms of clauses 6.8.2.2, 6.8.2.3, sub-clauses (a), (b), (c), (d) and (e) of clause 6.8.3.2, clauses 6.8.4.12, 6.9.2.1, 6.9.2.2, 6.9.2.3, 6.9.2.4, 6.9.4 6.9.6 ,6.10.3, 6.12.16, 6.12.17, 6.12.18, 6.12.20 and 6.12.21 may not be disclosed in the letter of offer, if the following conditions are fulfilled: (a) The issuer company has been filing periodic statements in regard to financial results and shareholding pattern with the Designated Stock Exchange and Registrar of Companies for the last three years and such statements are available on websites of the Designated Stock Exchange/ on a common e- filing platform. (b) The issuer company has in place an investor grievance handling mechanism which includes meeting of 'Shareholders' / Investors' Griev....
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....ount other than the bank account referred to in sub-section (3) of section 73; 6.41.10 Minimum Subscription Clause: The minimum subscription clause shall be incorporated as under: 6.41.10.1 For Non-underwritten Rights Issue i. If the Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within 221(fifteen days) from the date of closure of the issue. ii. If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. 221(fifteen days) after closure of the issue), the company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. 6.41.10.2 For Underwritten Rights Issue i. If the Company does not receive minimum subscription of 90% of the issue including devolvement of underwriters, the entire subscription shall be refunded to the applicants within 221(fifteen days) from the date of closure of the issue. ii. If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (....
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....regard to nature/ extent of services etc. to be furnished). 6.45.9 Future prospects - The expected year when the company would be able to earn net profit, declare dividend. 6.45.10 Change, if any, in directors and auditors during the last three years and reasons thereof. 6.46 Financial performance of the company for the last five years: (Figures to be taken from the audited annual accounts in tabular form) 6.46.1 Balance Sheet Data: Equity Capital, Reserves (State Revaluation Reserve, the year of revaluation and its monetary effect on assets) and borrowings. 6.46.2 Profit and Loss data: Sales, Gross profit, Net profit, Dividend paid if any. 6.46.3 Any change in accounting policies during the last three years and their effect on the profits and the reserves of the company. 6.46.4 Stock market quotation of shares/ debentures of the company, if any, (high/ low price in each of the last three years and monthly high /low price during the last six months) 6.46.5 Details of any pending litigations, defaults against the company, these group companies and the business relationship of these companies with the issuing company. 6.46.6 Promise versus performance fo....