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TMI BlogChapter III - The Companies (Prospectus and Allotment of Securities) Rules, 2014.X X X X Extracts X X X X X X X X Extracts X X X X ..... ities) Rules, 2014. (2) They shall come into force on the 1 st day of April, 2014. 2. Definitions.- (1) In these rules, unless the context otherwise requires,- (a) Act means the Companies Act, 2013 (18 of 2013) ; (b) Annexure means the Annexure to these rules; (c) fees means fees as specified in the Companies (Registration Offices and Fees) Rules, 2014; (d) Form or e-Form means a form set forth in Annexure to these rules which shall be used for the matter to which it relates; (e) Regional Director means the person appointed by the Central Government in the Ministry of Corporate Affairs as a Regional Director; (f) section means section of the Act ; (2) Words and expressions used in these rules but not defined and defined in the Act or in the Companies (Specification of definitions details) Rules, 2014, shall have the meanings respectively assigned to them in the Act or in the said Rules. 3. Information to be stated in the prospectus.- (1) The Prospectus to be issued shall contain- (a) the names, addresses and contact details of the corporate office of the issuer company, compliance officer of the issuer company, merchant bankers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of allotment, the number of shares allotted, the face value of the shares allotted, the price and the form of consideration: Provided that in the case of an initial public offer of an existing company, the details regarding individual allotment shall be given from the date of incorporation of the issuer and in the case of a listed issuer company, the details shall be given for five years immediately preceding the date of filing of the prospectus: Provided that the issuer company shall also disclose the number and price at which each of the allotments were made in the last two years preceding the date of the prospectus separately indicating the allotments made for considerations other than cash and the details of the consideration in each case. (3) The prospectus to be issued shall contain the following particulars, namely: - (a) the objects of the issue; (b) the purpose for which there is a requirement of funds ; (c) the funding plan (means of finance); (d) the summary of the project appraisal report (if any); (e) the schedule of implementation of the project; (f) the interim use of funds, if any (4) The prospectus t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f promoters contribution, if any, shall be disclosed in the following manner, namely:- (i) the total shareholding of the promoters, clearly stating the name of the promoter, nature of issue, date of allotment, number of shares, face value, issue price or consideration, source of funds contributed , date when the shares were made fully paid up, percentage of the total pre and post issue capital; (ii) the proceeds out of the sale of shares of the company and shares of its subsidiary companies previously held by each of the promoters; (iii) the disclosure for sources of promoters contribution shall also include the particulars of name, address and the amount so raised as loan, financial assistance etc , if any, by promoters for making such contributions and in case of own sources, complete details thereof. 4. Reports to be set out in the Prospectus.- The following reports shall be set out with the prospectus, namely:- (1) The reports by the auditors with respect to profits and losses and assets and liabilities. Explanation.- For the purposes of this sub-rule, the report shall also include the amounts or rates of dividends, if any, paid by the issuer company in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (a) in the purchase of any business; or (b) in the purchase of an interest in any business and by reason of that purchase, or anything to be done in consequence thereof, or in connection therewith; the company shall become entitled to an interest in either the capital or profits and losses or both, in such business exceeding fifty per cent. thereof, a report made by a chartered accountant (who shall be named in the prospectus) upon- (i) the profits or losses of the business for each of the five financial years immediately preceding the date of the issue of the prospectus ; and (ii) the assets and liabilities of the business as on the last date to which the accounts of the business were made up, being a date not more than one hundred and twenty days before the date of the issue of the prospectus; (c) in purchase or acquisition of any immoveable property including indirect acquisition of immoveable property for which advances have been paid to even third parties, disclosures regarding - (i) the names, addresses, descriptions and oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) The matters relating to terms and conditions of the term loans including re-scheduling, prepayment, penalty, default. (4) The aggregate number of securities of the issuer company and its subsidiary companies purchased or sold by the promoter group and by the directors of the company which is a promoter of the issuer company and by the directors of the issuer company and their relatives within six months immediately preceding the date of filing the prospectus with the Registrar of Companies shall be disclosed. (5) The matters relating to - (A) Material contracts; (B) Other material contracts; (C) 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 subscription list. (6) The related party transactions entered during the last five financial years immediately preceding the issue of prospectus as under - (a) all transactions with related parties with respect to giving of loans or, guarantees, providing securities in connection with loans made, or investments made ; (b) all other transactions which are material to the issuer company or the related party, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (i) date of opening of the issue; (ii) date of closing of the issue; (iii) date of earliest closing of the issue, if any. (h) the credit rating, if applicable; (i) all the grades obtained for the initial public offer; (j) the name(s) of the recognised stock exchanges where the securities are proposed to be listed; (k) the details about eligible investors; (l) coupon rate, coupon payment frequency, redemption date, redemption amount and details of debenture trustee in case of debt securities. 6. Period for which information to be provided in certain cases.- For the matters specified in rules 3 to 5, which require a company to provide certain particulars or information relating to the preceding five financial years, it shall be sufficient compliance for a company which has not completed five years, if such company provides such particulars or information for all the previous years since its incorporation. 7. Variation in terms of contracts referred to in the prospectus or objects for which prospectus was issued.- (1) where the company has raised money from public through prospectus and has any unutilized amount out of the money so raised, it shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of the person or persons or entity bearing the cost of making the offer of sale along with reasons. 9. Dematerialisation of securities.- The promoters of every public company making a public offer of any convertible securities may hold such securities only in dematerialised form: Provided that the entire holding of convertible securities of the company by the promoters held in physical form up to the date of the initial public offer shall be converted into dematerialised form before such offer is made and thereafter such promoter shareholding shall be held in dematerialized form only. 10. Shelf prospectus and Information Memorandum.- The information memorandum shall be prepared in Form PAS-2 and filed with the Registrar along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 within one month prior to the issue of a second or subsequent offer of securities under the shelf prospectus. 11. Refund of Application Money.- (1) If the stated minimum amount has not been subscribed and the sum payable on application is not received within the period specified therein, then the application money shall be repaid within a period of fifte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of sub-section (1) of section 62 by a company other than a listed company whose equity shares or convertible preference shares are listed on any recognised stock exchange, there shall be attached to Form PAS-3, the valuation report of the registered valuer. Explanation.- Pending notification of sub-section (1) of section 247 of the Act and finalisation of qualifications and experience of valuers, valuation of stocks, shares, debentures, securities etc. shall be conducted by an independent merchant banker who is registered with the Securities and Exchange Board of India or an independent chartered accountant in practice having a minimum experience of ten years. 13. Payment of commission.- A company may pay commission to any person in connection with the subscription or procurement of subscription to its securities, whether absolute or conditional, subject to the following conditions, namely: - (a) the payment of such commission shall be authorized in the company s articles of association; (b) the commission may be paid out of proceeds of the issue or the profit of the company or both; (c) the rate of commission paid or agreed to be paid shall not exceed, in cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion for such debentures during the year. (b) such offer or invitation shall be made to not more than two hundred persons in the aggregate in a financial year: Provided that any offer or invitation made to qualified institutional buyers, or to employees of the company under a scheme of employees stock option as per provisions of clause (b) of sub-section (1) of section 62 shall not be considered while calculating the limit of two hundred persons; Explanation. For the purposes of this sub-rule, it is hereby clarified that - (i) the restrictions under sub-clause (b) would be reckoned individually for each kind of security that is equity share, preference share or debenture; (ii) the requirement of provisions of sub-section (3) of section 42 shall apply in respect of offer or invitation of each kind of security and no offer or invitation of another kind of security shall be made unless allotments with respect to offer or invitation made earlier in respect of any other kind of security is completed; (c) the value of such offer or invitation per person shall be with an investment size of not less than twenty thousand rupees of face value of the securities; (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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