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Parag Basu Deputy General Manager Corporation Finance Department Division of Issues and Listing-II Phone: +91 22 2285 0451-56, (Extn: 410)
22871582 Fax: +91 22 2204
5633. Email: paragb@sebi.gov.in SEBI/CFD/DIL/DIP/20/2006/3/4 April 3, 2006 To all Merchant Bankers Dear Sir(s)/Madam(s), Sub: Introduction of new Chapter VIA in the SEBI
(DIP) Guidelines, 2000 1.
The Central Government, on 2.
Accordingly, for companies desirous of coming out with IDR issues,
a new Chapter VI A has been added in the SEBI DIP Guidelines, 2000, containing
the guidelines to be followed by an IDR issuer for coming out with such issue.
A copy of Chapter VIA is enclosed herewith in the Annexure. 3.
This circular is being issued in exercise of powers conferred by
Sections 11(1) and 11A of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote
the development of, and to regulate the securities market. 4.
These amendments shall come into force from the date of the
circular. This circular, along with the annexure, is available on SEBI website
at www.sebi.gov.in. The entire text of
SEBI (DIP) Guidelines, 2000, including the amendments issued vide this
circular, is also available on SEBI website under the category “Issues and
Listing”. Yours
faithfully, Parag Basu Annexure CHAPTER VIA OF
THE SEBI (DIP) GUIDELINES, 2000 ISSUE OF INDIAN
DEPOSITORY RECEIPTS (IDRs) PART I
– GENERAL REQUIREMENTS 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. 6A.2 ELIGIBILITY FOR ISSUE OF IDRS No issuer shall make an issue IDRs unless: (i)
it fulfills the eligibility criteria as specified in Rule 4 of the
IDR Rules (ii)
It is listed in its home country; (iii)
it has not been prohibited to issue securities by any
Regulatory Body; and, (iv)
it has good track record with respect to compliance with securities
market regulations. 6A.3 INVESTORS 1.
NRIs and FIIs cannot purchase or possess IDRs unless special
permission of the Reserve Bank of 2.
Investments by Indian Companies in IDRs shall not exceed the
investment limits, if any, prescribed for them under applicable laws. 3.
Automatic fungibility of IDRs is not permitted. 4.
An issue of IDRs is open to QIBs (as defined in clause 2.2.2.B. of
these Guidelines) only. 5.
The minimum application amount in an IDR issue shall be
Rs.2,00,000/- 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 6A.5 MINIMUM SUBSCRIPTION: If the company issuing
the IDRs does not receive the minimum subscription of 90% of the issued amount
on the date of closure of the issue, or if the subscription level falls below
90% after the closure of issue on account of cheques having being returned
unpaid or withdrawal of applications, the company shall forthwith refund the
entire subscription amount received. If there is a delay beyond 8 days after
the company becomes liable to pay the amount, the company shall pay interest at the rate of 15% per annum for the period
of delay. PART II
- DISCLOSURES IN A PROSPECTUS FOR IDRs A prospectus for issue of IDRs shall contain all
details as prescribed herein. 6A.6 GENERAL INSTRUCTIONS WITH RESPECT TO
CONTENTS OF THE PROSPECTUS: 1.
The Merchant Banker has the option to file the draft prospectus as
a public filing or a confidential filing. In both the cases, the initial fee as
prescribed in Rule 5 (i) (b) of the IDR
Rules shall accompany such filing. 2.
The contents of the prospectus including the financial statements
of the issuer company, its subsidiaries and associates shall be in plain
English. “Associate” for the
purpose of this chapter would mean “associate” as defined in Indian GAAP or
IFRS or US GAAP in which the financial statements of the issuer are disclosed. 3.
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. 4.
The prospectus shall also contain the information and statements
specified herein 5.
The issuing company shall, through a Merchant Banker file a
prospectus or letter of offer 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 shareholders by which 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 true and correct. 6.
The agreement made with the domestic depository shall also be
furnished along with the prospectus. 6A.7. DISCLAIMER 1.
A disclaimer shall be made by the Merchant Banker (including a due
diligence certificate) in the format specified in Schedule III 2.
A statement will be made by the Issuer disclaiming responsibility
for statements made otherwise than in the prospectus, as follows: “Our company, our
directors and the Merchant Banker accept no responsibility for statements made
otherwise than in the prospectus or in the advertisements or any other material
issued by at our instance and anyone placing reliance on any other source of
information including our website______ shall be doing so at his or her own
risk.” 6A.8 THE
ISSUE Summary of the terms of offer shall be incorporated,
including: 1.
Offer and Listing Details 2.
Plan of Distribution 3.
Markets 4.
Selling Shareholders, if any 5.
Dilution 6.
Expenses of the Issue 6A.9 FORWARD
LOOKING STATEMENTS A paragraph on the statements that are forward
looking statements and not matters of historical facts shall be incorporated. A
statement on the sources of data used in the prospectus and their accuracy
shall also be incorporated. A line should also be incorporated on whether these
have been independently verified. 6A.10 GENERAL INFORMATION 1.
Definitions/terms used in the prospectus 2.
Name, address and contact information of the registered office of
the company; 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; 4.
Interest 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 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.
Statement that an interest of 15% p.a. would be paid to the
investors if the allotments letters / refund orders are not despatched within
30 days of the 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 with regard to adequacy of
resources of underwriters to discharge their respective obligations, in case of
being required to do so; 17.
A statement by the issuing company that all moneys received out of
issue of IDRs shall be transferred to a separate domestic bank account, name
and address of the bank and the nature and number of the account to which the
amount shall be credited; 18.
Details of availability of prospectus and forms, i.e., date, time,
place etc; 19.
Amount and mode of payment seeking issue of IDRs 20.
Disclosure on Investor Grievances and Redressal System: a. The
arrangements or any mechanism evolved by the company for redressal of investor
grievances. b. The
past record (for a min period of 3 years before the date of the prospectus) of
investor grievance redressal of the company and its listed subsidiaries/associates
including details as to the time normally taken by it for disposal of various
types of investor grievances. c. That the
company undertakes to subject itself to the jurisdiction of Indian Courts
having jurisdiction over the place where the stock exchange is situated
regarding grievances of the applicants for IDRs 6A.11 RISK 1. Risk factors shall be disclosed as follows: a. Risk factors
associated with the company’s business b. Risk factors
associated with the country of the company proposing to issue IDRs c. Risk factors
associated with the IDRs / underlying shares 2.
Risk factors shall be classified as those which are specific to the project and
internal to the issuer company and those which are external and beyond the
control of the issuer company. 3. Risk factors shall be determined on the basis
of their materiality. 4.
Materiality shall be decided taking the following factors into account: a.
Some events
may not be material individually but may be found material collectively. b.
Some events
may have material impact qualitatively instead of quantitatively. c.
Some events
may not be material at present but may be having material impacts in future. 5. The
Risk factors shall appear in the prospectus in the following manner: a. Risks envisaged by Management. b. Proposals, if any, to address the risks. c. Any ‘notes’ required to be given prominence shall
appear immediately after the Risk factors. 6A.12 RECENT DEVELOPMENTS Important 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 6A.14 DIVIDENDS 1.
Dividend policy of the Company 2.
Rate of Dividend and Amount of Dividend paid for the last five
financial years 3.
Regulatory framework in the Country of Incorporation/share listed
concerning Dividends 4.
Details of Arrangement with the Depositories for payment of
Dividend to the 5.
Information about changes, if any, in dividends announced and
dividends paid and time gap between the dividends announced and dividends paid.
6.
Information about Dividend Yield. 7.
Taxation aspects of dividend distribution. 6A.15 EXCHANGE RATES 1.
Brief history of the pattern of Exchange rates between the Country
of Incorporation/where shares are listed and 2.
High, Low, Average Rates for the last five years 3.
High, Low, Average Rates for the last twelve months 6A.16 FOREIGN INVESTMENT AND EXCHANGE CONTROLS OF
THE COUNTRY OF INCORPORATION/ WHERE SHARES ARE LISTED Information relating to the
relevant foreign investment laws and exchange control regulations of the
Country of Incorporation or country where the underlying equity shares are
listed. 6A.17 OBJECTS
OF THE ISSUE / USE OF PROCEEDS The following shall be
disclosed: 1.
purpose of the issue; 2.
break-up of the cost of project for which the money is raised
through the 3.
the means of financing such project; and 4.
proposed deployment status of the proceeds at each stage of the
project. 6A.18 CAPITALISATION
STATEMENT
6A.19 CAPITAL STRUCTURE 1.
Authorised, issued, subscribed and paid up capital (Number of
instruments, description, aggregate nominal value). 2.
Size of present issue. 3.
Paid-up Capital: -
before the issue; -
after the issue (if the IDR issue involves issue of fresh equity
shares); and -
share premium account (before and after the issue)
4. Detailed notes to Capital
Structure Capital Structure shall also contain details
regarding holdings of major shareholders i.e., the person or persons who are in
over-all control of the company. 6A.20 FINANCIAL INFORMATION 1. The audited consolidated or unconsolidated financial
statements prepared in accordance with Indian GAAP or IFRS or US GAAP shall
contain the following: a.
Report of Independent 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) 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 or US GAAP,
the annual and quarterly financial results shall be audited by a professional
accountant or certified public accountant or equivalent (by whatever name
called in the issuer country) .in accordance with the International Standards
on Auditing (ISA). The auditor’s report shall also be prepared in accordance
with the ISA. c.
The above report needs to be stated on consolidated Basis or stand
alone basis d.
In case issuer country’s accounting norms do not require a
statutory Audit, such accounts shall be audited by a professional accountant or
a certified public accountant 3. A
report by domestic depository, as certified by an Accountant who is member of
Institute of Chartered Accountants of
India holding certificate of practice, upon profits or losses of the issuing
company for each of the five financial years immediately preceding the issue of
prospectus and upon the assets and liabilities of the issuing company at the
last date to which the accounts of the company were made in the specified form;
provided that the gap between date of issue and date of report shall not be
more than 120 days 4. If the
proceeds of the IDR issue are used for investing in other body(ies) corporate,
then following details of such body(ies) corporate shall be given : a) Names and address(es) of the bodies corporate; b) The reports as stated above in respect of those bodies
corporate also. 5. Related
Party transactions 6. Liquidity
and Capital Resources 6A.21 STATEMENT ON MATERIAL DEVELOPMENTS SUBSEQUENT
TO THE DATE OF THE LAST FINANCIAL STATEMENTS AS DISCLOSED IN THE PROSPECTUS An 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
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. 6A.22 MANAGEMENT DISCUSSION AND ANALYSIS OF THE
FINANCIAL STATEMENTS (BY COMPARING THE RECENT FINANCIAL YEAR WITH THE PREVIOUS THREE FINANCIAL YEARS) 1. 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. 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 publicly announced new products or business segment; h.
the extent to which business is seasonal; i.
any significant dependence on a single or few suppliers or
customers; j.
competitive conditions. 6A.23 INDUSTRY AND BUSINESS OVERVIEW Market including details of the competition,
past production figures for the industry, existing industry capacity, past
trends and future prospects regarding exports (if, applicable), demand and
supply forecasts (if given, should be essentially with assumptions unless
sourced from a market research agency of repute), etc. to be given. Source of
data used shall be mentioned. 6A.24 DETAILS OF THE ISSUER 1.
Main object, history and present business of the company; 2.
location of the project, if any; 3.
Installed capacity and the details of plant and machinery,
infrastructure facilities, technology etc., where applicable; 4.
schedule of implementation of project and progress made so far, if
applicable; 5.
nature of product(s), consumer(s), industrial users; 6.
Research and Development, Patents and Licenses, etc. 7.
Property, Plants and Equipment 8.
particulars of financial and other defaults, if any; 9.
Underwriting 10. Experts 11. Where
You Can Find Additional Information 12. Enforcement
of Civil Liabilities Against Foreign Persons 6A.25 SUBSIDIARIES AND ASSOCIATES OF THE
ISSUER The following
information for the last 3 years based on the audited statements in respect of
subsidiaries and associates of the Issuing Company: 1.
Date of Incorporation; 2.
Nature of activities; 3.
Equity Capital; 4.
Reserves (excluding revaluation reserve); 5.
Sales; 6.
Profit after tax (PAT); 7.
Earnings per share (EPS); and 8.
Net Asset Value (NAV); 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 SEBI. 6A.26 MANAGEMENT 1.
Controlling shareholders and their Background 2.
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 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 Trading Market in
that country 13. A statement of how the
enforcement of Indian Securities Laws would be affected by the fact that the
issuer is located outside 6A.28 DESCRIPTION OF THE INDIAN DEPOSITORY
RECEIPTS AND RIGHTS OF IDR HOLDERS 1.
Brief description of the Indian Depository Receipts 2.
Dividends, Other Distributions and Rights of 3.
Voting rights and their manner of exercise by IDR holders, if any. 4.
Record dates and how the same will be disclosed. 5.
Reports and other communication to which the IDR holders will be
entitled. 6.
Conversion procedure of IDRs into shares 7.
Governing Law regarding various aspects of IDRs and transactions
therein. 6A.29 PROVISIONS
REGARDING TRANSFER OF SHARES AND DEPOSITORY RECEIPTS 1. Provisions regarding transfer of IDRs 2. Outline of provisions regarding transfer of
underlying shares after conversion 6A.30 INFORMATION RELATING TO THE DEPOSITARY -
INDIAN & INTERNATIONAL Brief details of the Domestic
Depositary, Overseas Custodian Bank and Depositary Agreement. 6A.31
APPROVALS OF THE GOVERNMENT/REGULATORY AUTHORITIES 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. 6A.32 TAXATION
FRAMEWORK IN Information relating to relevant
provisions of Taxation law, Tax Treaties and their impact for IDR holders. 6A.33 OUTSTANDING LITIGATIONS AND DEFAULTS 1. Material litigation / liabilities/defaults
including arrears / potential liabilities of the issuer, its promoters / controlling
shareholders / directors and its subsidiaries and associates. 2. Materiality shall be determined on the basis of factors which are specific to the project and to the issuer, its
promoters / controlling shareholders / directors, its subsidiaries and associates,
which may have a bearing on the performance of the issuer company. . Materiality shall be
decided taking the following factors into account: a. Some litigation/defaults may not be material individually but
may be found material collectively. 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 also shall be
given. 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. 6A.35 6A.36 MATERIAL CONTRACTS AND DOCUMENTS FOR
INSPECTION Place at which inspection of the documents specified under Rule 6
of the Companies (Issue of Indian Depository Receipts) Rules, 2004, the prospectus,
the financial statements and auditor's report thereof will be allowed during
the normal business hours. 6A.37 OTHER INFORMATION 1.
Disclosure of mandatory vetting of the prospectus by the legal
counsel to the Issuer operating at the place where the registered office of the
Issuer is situated. 2.
Consent of Merchant Bankers, overseas custodian bank, the domestic
depository and all other intermediaries associated with the issue of IDRs. 3.
Fees and expenses payable to the intermediaries involved in the
issue of IDRs PART III:
APPLICABILITY OF THE PROVISIONS OF THE SEBI (DIP) GUIDELINES, 2000 Except Chapter VI, all other chapters of the
SEBI (DIP) Guidelines, 2000 would apply to an issue of Indian Depository
Receipts (IDRs) to the extent as may be prescribed by SEBI for such issues. PART IV: CONTENTS OF
ABRIDGED PROSPECTUS (See Rule 8(i) of the IDR Rules) 1.
General Instructions:
The information to be provided under each of the heads specified below shall be
as per the requirement of Part I of Chapter VI 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. 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
Interest 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 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 provisions relating to punishment for fictitious
applications; 5.8
Statement/declaration for refund of excess subscription 5.9
Statement that an interest of 15% p.a. would be paid to the
investors if the allotments letters / refund orders are not despatched within 15/30
days of the closure of the public issue, as the case may be 5.10
declaration about issue of allotment letters/certificates/ IDRs
within the stipulated period; 5.11
date of opening of issue; 5.12
date of closing of issue; 5.13
Method and Expected Timetable of the issue 5.14
a statement that subscription to the issue shall be kept open for
atleast 3 working days and not more than 10 working days 5.15
date of earliest closing of the issue; 5.16
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; 5.17
a statement by the issuing company that all moneys received out of
issue of IDRs shall be transferred to a separate domestic bank account, name
and address of the bank and the nature and number of the account to which the
amount shall be credited; 5.18
details of availability of prospectus and forms, i.e., date, time,
place etc; 5.19
amount and mode of payment seeking issue of IDRs 5.20
Disclosure on Investor Grievances and Redressal System: 5.21
That the company undertakes to subject itself to the jurisdiction
of Indian Courts having jurisdiction over the place where the stock exchange is
situated regarding grievances of the applicants for IDRs 6.
Capital Structure of the
issuer company Following
details to be furnished: 6.1
Authorised, issued, subscribed and paid up capital (Number of
instruments, description, aggregate nominal value). 6.2
Size of present issue. 6.3
Paid-up Capital: -
before the issue; -
after the issue (if the IDR issue involves issue of fresh equity
shares); and -
share premium account (before and after the issue) 6.4
Detailed notes to Capital Structure 7.
Terms of the Present
Issue 7.1 Authority
for the issue, terms of payment and procedure and time schedule for allotment
and issue of certificates/ refund orders. 7.2 The
clause "Interest in Case of Delay in Despatch of Allotment Letters/ Refund
Orders in Case of Public Issues" shall appear. 8. Instructions for applicants 8.1 How
to Apply, 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
ii. I
am / We are Indian National(s) resident in iii. I
am / We are Indian National(s) resident outside 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 issues. ii.
Provision in the application form for
inserting particulars relating to bank account number and the name of the bank
with whom such account is held, to enable printing of the said details in the
refund orders or for refunds through Electronic Clearing System. iii.
Disclosure of PAN/GIR number. iv.
Details of options, if any, to receive
securities subscribed for and a statement that trading in securities on the
stock exchanges in physical form will be available only subject to limits
prescribed by the Board for time to time. 8.4
Any special tax benefits for company and its shareholders (Only
section numbers of the Income Tax Act and their substance should be mentioned,
without reproducing the text of the sections) 8.5
Restrictions on investments in IDRs / fungibility of IDRs 9.
Particulars of the Issue 9.1 Objects
of the issue 9.2 Project
cost 9.3 Means
of financing 9.4 Name
of Appraising Agency, if any 9.5 Name
of Monitoring Agency, if any 10.
Description of the Indian Depository Receipts and Rights of IDR Holders 10.1
Brief description of the Indian Depository Receipts 10.2
Dividends, Other Distributions and Rights of IDR holders 10.3
Voting rights and their manner of exercise by IDR holders, if any. 10.4
Record dates and how the same will be disclosed. 10.5
Reports and other communication to which the IDR holders will be
entitled. 10.6
Conversion procedure of IDRs into shares 10.7
Governing Law regarding various aspects of IDRs and transactions
therein. 11. Company, Management and Project 11.1History
and main objects and present business of the company. 11.2Promoters
/ controlling shareholders and their background. 11.3Names,
address and occupation of manager, managing director, and other Directors
(including nominee-directors and whole-time directors) giving their
directorships in other companies. 11.4Location
of the project 11.5Plant
and machinery, technology, process, etc 11.6Collaboration,
any performance guarantee or assistance in marketing by the collaborators 11.7Infrastructure
facilities for raw 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 11.9Nature
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, 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 preceding
month of the date of Prospectus along with the volume e.
This information should be provided, exchange wise, if the
securities are listed in more than one exchange f.
This information should updated as on last available date before
the date of prospectus g.
If it is a further issue of IDRs which are already listed in 12. Particulars with regard to the subsidiaries
/ associates of the issuer The following information for the last 3 years
based on the audited statements in respect of subsidiaries and associates of
the Issuing Company: 12.1
Date of Incorporation; 12.2
Nature of activities; 12.3
Equity Capital; 12.4
Reserves (excluding revaluation reserve); 12.5
Sales; 12.6
Profit after tax (PAT); 12.7
Earnings per share (EPS); and 12.8
Net Asset Value (NAV); 13. Basis for Issue Price 13.1 Earnings
per share i.e. EPS pre-issue for the last three years (as adjusted for changes
in capital); 13.2 P/E pre-issue 13.3 Average return on net worth in the last three
years 13.4 Minimum return on increased net worth required
to maintain pre-issue EPS; 13.5 Net Asset Value per share based on last
balance sheet; 13.6 Net Asset Value per share after issue and
comparison thereof with the issue price. 13.7 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) 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. 13.8 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 also shall be given 14.
Outstanding Material Litigations
and Defaults (in a summarised tabular form) 14.1 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 Five 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 profit, dividend paid, if any 19.3 Any
change in accounting policies during the last three years and their effect on
the profits and the reserves of the company 19.4 Following
information as extracted from the report of the auditors reproduced in the main
prospectus: i)
net profit before accounting for extra ordinary items ii)
extra ordinary items iii) net
profit after accounting for extra ordinary items 20.
Management
Discussions and Analysis on Accounts 21.
Listed Ventures of
Promoters / controlling shareholders 22.
Disclosure on Investor
Grievances & Redressal System 23.
Statement regarding
minimum subscription clause: The following statement
shall appear: If the
company issuing the IDRs does not receive the minimum subscription of 90% of
the issued amount on the date of closure of the issue, or if the subscription
level falls below 90% after the closure of issue on account of cheques having
being returned unpaid or withdrawal of applications, the company shall
forthwith refund the entire subscription amount received. If there is a delay
beyond 8 days after the company becomes liable to pay the amount, the company
shall pay interest at the rate of 15%
per annum for the period of delay.
24.
Information relating to
relevant provisions of Taxation law, Tax Treaties and their impact for IDR
holders. 25.
Brief details of the
Domestic Depositary, Overseas Custodian Bank and Depositary Agreement. 26.
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. 27.
Signatories to the Prospectus. |
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