TaxTMI 
TaxTMI 
ISSUE OF INDIAN DEPOSITORY RECEIPTS (IDRs)
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....cribed for them under applicable laws. 3. Automatic fungibility of IDRs is not permitted. 4. ^4(In every issue of IDR - (i). At least 50% of the IDRs issued shall be subscribed to by QIBs; (ii). The balance 50% shall be available for subscription by non-institutional investors (i.e., investors other than QIBs and retail individual investors) and retail individual investors, including employees. IDRs shall be allocated among non-institutional investors, retail individual investors and employees at the discretion of the issuer. The manner of allocation shall be disclosed in the prospectus for IDRs); (iii). (^5Allotment to all these categories shall be made on proportionate basis only) 5. The minimum application amount in an IDR issue shall be ^6(Rs.20,000/-). 6. Procedure to be followed by each class of applicant for applying shall be mentioned in the prospectus. 6A.4 MINIMUM ISSUE SIZE: The size of an IDR issue shall not be less than Rs. 50 crores ^7(6A.5 MINIMUM SUBSCRIPTION: (a) Following statement shall appear for non-underwritten IDR issues: "If the issuing company does not receive the minimum subscription of 90 per cent of the issued amount o....
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.... it was approved, with the SEBI and Registrar of Companies, New Delhi, before such issue. They shall also certify that all the disclosures made in the prospectus are ^10(true, correct and adequate). 6. The agreement made with the domestic depository shall also be furnished along with the prospectus. 7. ^11(The lead Merchant Banker shall furnish to the Board a due diligence certificate along with the draft publicly filed offer document. In addition to the due diligence certificate furnished along with the draft offer document, the lead Merchant Banker shall also: (i). certify that all amendments suggestion or observations made by the Board have been incorporated in the offer document; (ii). furnish a fresh "due diligence" certificate at the time of filing the prospectus with the Registrar of Companies; (iii). furnish a certificate immediately before the opening of the issue that no corrective action on its part is needed; (iv). furnish a certificate after the issue has opened but before it closes for subscription. The due diligence certificates shall be in the format specified in Schedule VIB. The lead Merchant Banker who is responsible for conducting due dilige....
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....th the issue of IDRs; 4. ^13(Names, addresses and contact information of experts and counsel) 5. Name, address and contact information of the compliance officer in relation to the issue of IDRs. The compliance officer should be placed in India 6. Name, address and contact information of Stock Exchanges where applications are made or proposed to be made for listing of the IDRs; 7. Disclosure about provisions relating to punishment for fictitious applications; 8. Statement/declaration for refund of excess subscription 9. ^14(Statement that the issuing company is required to pay an interest of 15% p.a. to the investors if the allotments letters / refund orders are not despatched within 15 days of the date of closure of the public issue) 10. Declaration about issue of allotment letters/certificates/ IDRs within the stipulated period; 11. Date of opening of issue; 12. Date of closing of issue; 13. Method and Expected Timetable of the issue 14. A statement that subscription to the issue shall be kept open for atleast 3 working days and not more than 10 working days 15. Date of earliest closing of the issue; 16. Declaration by the Merchant Banker wit....
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....portant events in the recent past (2 FY preceding the issue) providing details of important developments on 3 key areas: Operations & Management, Shareholding patterns and Business Environment 6A.13 MARKET PRICE INFORMATION AND OTHER INFORMATION CONCERNING THE SHARES IN THE DOMESTIC MARKET OF THE ISSUER 1. 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) 2. 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) 3. Market price of shares for the month preceding the date of Prospectus (High, Low, Average Daily Trading Volume) 4. The Opening and Closing price on the last day of the preceding month of the date of Prospectus along with the volume 5. This information should be provided, exchange wise, if the securities are listed in more than one exchange 6. This information should updated as on last available date before the date of prospectus 7. If it is a further issue of IDRs which are already listed in India, the above information ....
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....consolidated 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 preceeding the date of prospectus shall contain the following: (a). Report of Auditors on the Financial Statements (b) Balance Sheets (c) Statements of Income (d) Schedules to Accounts (e) Statements of Changes in Stockholders' Equity (f) Statements of Cash Flows (g) Statement of Accounting Policies (h) Notes to Financial Statements (i) Statement Relating to Subsidiary Companies (in case of unconsolidated financial statements) (j) Related Party transactions (k) Liquidity and Capital Resources. The financial information in the prospectus shall be disclosed in the issuing company's functional currency/reporting currency/national currency and the reporting currency shall be restricted to Sterling Pound/Euro/Yen/US Dollar. In case, the financial results are prepared as per IFRS or US GAAP, the financial results shall be audited by a professional accountant o....
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....st 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. 6A.20.2.3. 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 report. If financial results are prepared in accordance with IFRS, then issuing company shall annex the summary of significant differences between the Indian GAAP and IFRS. 6A.20.3. Where the law of the home country does not require annual statutory audit of the accounts of the issuing company, a report, prepared in accordance with Indian GAAP certified by Chartered Accountant in practice within the terms and meaning of the Chartered Accountants Act, 1949 on the financial statements/ results of the issuing company for each of the three financial years immediately preceding the date of prospectus including the profits or losses, assets, liabilities and cash-flow statement of the issuing company at the last date to which the account....
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....ter adjustments as given in the auditors report for the past three years containing significant items of income and expenditure shall be given. 2. Overview of the business of the issuer company. 3. Factors that may affect Results of the Operations. 4. An analysis of reasons for the changes in significant items of income and expenditure shall also be given, inter alia, containing the following: a. unusual or infrequent events or transaction; b. significant economic changes that materially affected or (are likely to effect income from continuing operations; c. known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations; d. 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; e. the extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices; f. total turnover of each major industry segment in which the company operated g. status of any pub....
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....ial Personnel (i.e. Name, address(es) of Directors, Manager, Managing Director or other principal officers of the company, age, qualification, industry experience, other directorships) 3. Remuneration of the Directors and the Key managerial personnel with detailed breakup, sitting fees, their relation with promoters / controlling shareholder(s), if any, their equity holding in the company, duration of their association with the company. 4. Organisational Structure 5. Board Practices 6. Employees 6A.27 SECURITIES MARKET OF THE COUNTRY OF INCORPORATION/ WHERE SHARES ARE LISTED 1. Brief History 2. Stock Exchange Regulation 3. Listing Regulations 4. Details of the Securities market regulator of the country of the issuer company 5. Whether the Securities market regulator of the country of the issuer company has signed any MoU with SEBI/IOSCO 6. Disclosure under the Companies Act and Securities Regulations (or equivalent thereof) 7. Stock Exchanges 8. Takeover Code/Buyback Code 9. Reforms in Some Key Sectors of the Economy 10. Restriction on Foreign Ownership of Securities 11. Overview of the Financial Sector 12. Nature of the Securities....
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....llectively. b. Some litigation/defaults may have material impact qualitatively instead of quantitatively. c. Some litigation/defaults may not be material at present but may be having a material impact in future. 6A.34 BASIS OF ISSUE PRICE 1. Earnings per share i.e. EPS pre-issue for the last three years (as adjusted for changes in capital); 2. P/E pre-issue 3. average return on net worth in the last three years 4. minimum return on increased net worth required to maintain pre-issue EPS; 5. Net Asset Value per share based on last balance sheet; 6. Net Asset Value per share after issue and comparison thereof with the issue price. 7. Comparison of all the accounting ratios of the issuer company as mentioned above with the industry average and with 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) 8. The face value of shares (including the statement about the issue price being "X" times of the face value) and that of the IDRs. The aggregate face value of the total equity shares underlying a single IDR al....
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....uses in the Chapter are applicable except clause 8.1 to 8.4, 8.5 (a) to (f), 8.6, 8.7, 8.8.1(b), 8.8.2, 8.12, 8.15 to 8.17 and 8.19 (viii). Chapter VIIIA: Entire Chapter is not applicable (ix). Chapter IX: Applicability of Chapter IX is as follows: (a).Clause 9.1. to 9.1.13: Applicability is restricted to any issue advertisements made in India pertaining to the IDR issue of the issuing company; (b).Clause 9.1.14 and 9.1.14A: Applicability is restricted to any public communications and publicity material issued or published in any media in India; (c). Clause 9.1.14B: Entirely applicable; (d).Clause 9.1.15: Applicability is restricted to any product advertisement of an issuing company issued or published in any media in India; (e).Clause 9.1.16 to 9.1.19: Entirely applicable; (f). Clause 9.2 (a) and (b): Applicability is restricted to any material or information released in India and any issue advertisements and publicity materials issued or published in any media in India; (g).Clause 9.2A: Not applicable; (h).Clause 9.3.1 (i), (ii) and (iii): Entirely applicable; (i). Clause 9.3.1 (iv): Applicability is restricted to any research report circula....
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....of the application form, no part of the information given in the Abridged Prospectus is mutilated. 5. General Information 5.1 The name of the issuer company and address of the registered office of the issuer 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 Issuer, details thereof. 5.2 Name, address and contact information of the registered office of the company; 5.3 Name, address and contact information of the Domestic Depository, the Overseas Custodian Bank with the address of its office in India, the Merchant Banker, the Underwriter to the issue, Advisors to the issue and any other intermediary which may be appointed in connection with the issue of IDRs; 5.4 ^21(Names, addresses and contact information of experts and counsel) 5.5 Name, address and contact information of the compliance officer in relation to the issue of IDRs. The compliance officer should be placed in India 5.6 Name, address and contact information of Stock Exchanges where applications are made or proposed to be made for listing of the IDRs; 5.7 Disclosure about pro....
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....pply, Availability of Prospectus, Abridged Prospectus and Application Forms, Mode of Payment and Book building procedure, if relevant. 8.2 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 for the said equity shares as nominee(s) of any person resident outside India or Foreign National(s). ii. I am / We are Indian National(s) resident in India and I am / We are applying for the said equity shares as Power of Attorney holder(s) of Non- Resident Indian(s) mentioned below on non-repatriation basis. iii. I am / We are Indian National(s) resident outside India and I am/we are applying for the said equity shares on my / our own behalf on non-repatriation basis." 8.3 The application form should contain necessary instructions/ provisions for the following: i. Instructions to applicants to mention the number of application form on the reverse of the instruments to avoid misuse of instruments submitted along with the applications for shares/ debentures in public....
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....w materials and utilities like water, electricity, etc. 11.8 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 11.9 Nature of the products/services and end users 11.10 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 with regard to nature/ extent of services, etc., have to be furnished. 11.11 Approach to marketing and proposed marketing set up 11.12 Export possibilities and export obligations, if any. 11.13 Stock Market Data: Disclose particulars of:- 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, Av....
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....tement about the issue price being "X" times of the face value) and that of the IDRs. The aggregate face value of the total equity shares underlying a single IDR also shall be given 14. Outstanding Material Litigations and Defaults (in a summarised tabular form) Material Litigation / Liabilities including arrears/Potential liabilities of the issuer, its promoters / controlling shareholders / directors and its subsidiaries and associates. 15. Material Development: Any material development after the date of the latest balance sheet and its impact on performance and prospects of the company. 16. Expert opinion obtained, if any. 17. Change, if any, in directors and auditors during the last three years and reasons thereof. 18. Time and Place of Inspection of material contracts (List of material contracts not required) 19. Financial Performance of the Company for the Last ^24(three) Years (Figures to be taken from the audited annual accounts in a tabular form) 19.1 Balance Sheet Data: Equity Capital, Reserves (State Revaluation Reserve, the year of revaluation and its monetary effect on assets) and borrowings 19.2 Profit and Loss data: Sales, Gross profit, Net ....
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..... 2 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/37/2009/31/07 dated July 31, 2009 for the following: "6A.1 PRELIMINARY The guidelines given in this chapter are in addition to the provisions of the Companies (Issue of Indian Depository Receipts) Rules, 2004 (hereinafter referred to as the IDR Rules) and not in derogation thereof." 3 Omitted the following vide SEBI Circular No. SEBI/CFD/DIL/DIP/37/2009/31/07 dated July 31, 2009: "NRIs and FIIs cannot purchase or possess IDRs unless special permission of the Reserve Bank of India is taken." 4 Substituted sub-clause, vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007 for the following: "An issue of IDRs is open to QIBs (as defined in clause 2.2.2.B. of these Guidelines) only." 5 Inserted vide SEBI Circular No. SEBI/CFD/DIL/DIP/37/2009/31/07 dated July 31, 2009 6 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007 for the words "Rs.2,00,000/-" 7 Substituted vide SEBI Circular No. SEBI/CFD/DIL/DIP/37/2009/31/07 dated July 31, 2009 for the following: "6A.5 MINIMUM SUBSCRIPTION: If the company issuing the IDRs does not receive the m....
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....lts and financial status of the company for each of the five financial years immediately preceding the issue of prospectus including the profits or losses and assets & liabilities of the issuing company at the last date to which the accounts of the company were made in the specified form; ^15(Provided that the gap between the date of issue and the date of report shall not be more than 180 days, wherever statutory audit is required under laws of the country where the issuer is incorporated.) a. The above report needs to be stated in Indian Rupees in addition to home country currency and shall be prepared either in Indian GAAP (including all Accounting Standards issued by the Institute of Chartered Accountants of India) or with the International Financial Reporting Standards (IFRS) [including the International Accounting Standards (IAS)] or US GAAP, with a reconciliation statement vis-à-vis Indian GAAP. If the same is prepared according to IFRS or US GAAP, a paragraph on summary of significant differences between Indian GAAP and IFRS or Indian GAAP and US GAAP, as the case may be, shall also be incorporated. b. Further, in case the report is prepared as per IFRS....