9911796707
TMI BlogDISCLOSURES IN OFFER DOCUMENT, ABRIDGED PROSPECTUS AND ABRIDGED LETTER OF OFFERX X X X Extracts X X X X X X X X Extracts X X X X ..... g player", etc. shall not be used unless they can be substantiated by proper source of information which shall be disclosed. (b) All blank spaces in the draft offer document shall be filled up with appropriate data before registering the offer document with the Registrar of Companies or filing the same with the recognised stock exchanges. (c) Simple English for easy understanding of the contents of the offer document may be used. The technical terms used in explaining the business of the issuer may be clarified using simple terms to ensure better understanding by investors. (d) Wherever it is mentioned in the offer document that details are given elsewhere in the document, the same shall be adequately cross-referenced by indicating the page and paragraph numbers. (e) The offer document should not make any forward looking statements that cannot be substantiated. (f) Consistency may be ensured in the style of disclosures. If first person is used, the same may be used through out. Sentences that contain a combination of first and third persons may be avoided. (g) The issuer shall ensure that all material matters informed or reports circulated prior to the issue or thereafter by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic offer: "This being the first issue of the issuer, there has been no formal market for the securities of the issuer. The face value of the equity shares is (-----) and the issue price / floor price / price band is 'X-times' of the face value. The issue price / floor price / price band (has been determined and justified by the lead merchant banker and the issuer as stated under the paragraph on "Basis for Issue Price") should not be taken to be indicative of the market price of the specified securities after the specified securities are listed. No assurance can be given regarding an active or sustained trading in the equity shares of the issuer nor regarding the price at which the equity shares will be traded after listing." (g) The following clause on 'General Risk' shall be incorporated in a box format: "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 mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nges. (B) Back Cover Pages: The back inside cover page and back outside cover page shall be in white. (II) Table of Contents: The table of contents shall appear immediately after the front inside cover page. (III) Definitions and Abbreviations: (A) Conventional or general terms. (B) Issue related terms. (C) Issuer and industry related terms. (D) Abbreviations. (IV) Risk Factors: (A) The risk factors, other than those specified in sub-paras. (f), (g) and (h) of para. (2) of sub-item (A) of Item (I) above, shall be printed in clear readable font (preferably of minimum point ten size). (B) The risk factors shall be classified as those which are specific to the project and internal to the issuer and those which are external and beyond the control of the issuer. (C) The risk factors shall be determined on the basis of their materiality. In determining the materiality of risk factors, the following shall be considered : (1) Some risks may not be material individually but may be material when considered collectively. (2) Some risks may have an impact which is qualitative though not quantitative. (3) Some risks may not be material at present but may have a material impact in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of outstanding debt instruments issued to public or to any person on private placement basis by the issuer, the default in compliance with the material covenants such as in creation of full security as per terms of issue, default in payment of interest, default in redemption, non-creation of debenture redemption reserve, default in payment of penal interest wherever applicable, non-availability or non-maintenance of asset cover, interest cover, debt-service cover, etc. (12) The fact that the unsecured loans taken by the issuer, promoter, group companies or associates can be recalled by the lenders at any time. (13) The default in repayment of deposits or payment of interest thereon. The roll over of liability, if any. (14) The potential conflict of interest, if the promoters or directors of the issuer are involved with one or more ventures which are in the same line of activity or business as that of the issuer. (15) The shortfall in performance vis-à-vis objects stated in the previous issues of the issuer and group companies, as disclosed under the heading "Performance vis-à-vis Objects" in the section "Other Regulatory and Statutory Disclosures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institutional finance in respect of working capital requirements. (30) Any restrictive covenants, as regards interests of equity shareholders, in a shareholders' agreement, promoters' agreement or any agreement for short term (secured and unsecured) and long term borrowings. (31) All disputed or contested tax demands and other government claims, along with the disclosures of amount, period for which such demands or claims are outstanding, financial implications and the status of the case. (32) The existence of large number of pending investor grievances against the issuer and other listed companies under the same management within the meaning of section 370 (1B) of the Companies Act, 1956. (33) The risks associated with second or residual charge or subordinated obligation created on the asset cover, in case of issue of secured convertible debt instruments. (34) The risk associated with orders not having been placed for plant and machinery indicating the percentage and value terms of the plant and machinery for which orders are yet to be placed (V) Prominent Notes: This section shall contain notes which are required to be given prominence and shall also include the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite addresses and e-mail addresses of the merchant bankers, co-managers, registrars to the issue, bankers to the issue, brokers to the issue, syndicate members, Self Certified Syndicate Banks, 6[registrar to issue and share transfer agents, depository participants,] etc. (7) The names, addresses, telephone numbers, fax numbers and e-mail addresses of the auditors of the issuer. (8) The statement of inter-se allocation of responsibilities among lead merchant bankers, where more than one merchant banker is associated with the issue. (9) The following details of credit rating, in case of a public issue of convertible debt instruments: (a) The names of all the credit rating agencies from which credit rating including unaccepted rating has been obtained for the issue of convertible debt instruments. (b) The details of all the credit ratings including unaccepted rating obtained for the issue of convertible debt instruments. (c) All the credit ratings obtained during three years prior to the filing the offer document for any of the issuer's listed convertible debt instruments at the time of accessing the market through a convertible debt instrument. (10) The following details of IPO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue. (5) The maximum amount of funds to be received by the issuer in case of further allotment and the use of these additional funds shall be disclosed in the offer document. (6) The details of the agreement or arrangement entered into by the stabilising agent with the promoters or shareholders to borrow equity shares from the latter. The details shall, inter-alia, include the name of the promoters or shareholders, their existing shareholding in the issuer, the number and percentage of equity shares to be lent by them and other important terms and conditions including rights and obligations of each party. (7) The exact number of equity shares to be allotted pursuant to the public issue, stating separately the number of equity shares to be borrowed from the promoters or shareholders and over-allotted by the stabilising agent and the percentage of such equity shares in relation to the total issue size. (D) Capital Structure: (1) The capital structure shall be presented in the following manner in a tabular form: (a) The authorised, issued, subscribed and paid up capital (number of securities, description and aggregate nominal value). (b) Size of the present issue, giving separ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has made any issue of specified securities at a price lower than the issue price during the preceding one year, specific details of the names of the persons to whom such specified securities have been issued, whether they are part of promoters group, reasons for such issue and the price shall be given. (g) The proposal or intention, negotiations and consideration of the issuer to alter the capital structure by way of split or consolidation of the denomination of the shares, or issue of specified securities on a preferential basis or issue of bonus or rights or further public issue of specified securities or qualified institutions placement, within a period of six months from the date of opening of the present issue. (h) The total shareholding of the promoters in a tabular form, clearly stating the name of the promoter, nature of issue, date of allotment, number of shares, face value, issue price/ consideration, date when the shares were made fully paid up, percentage of the total pre and post issue capital, the lock in period, if any and the number and percentage of pledged shares, if any, held by each promoter. (i) The details of: (i) the aggregate shareholding of the promote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions under which it is exempt. (vi) A statement that promoters' contribution has been brought in to the extent of not less than the specified minimum lot and from persons defined as promoters under these regulations. (vii) A statement that the promoters undertake to accept full conversion, if the promoters' contribution is in terms of the same optionally convertible debt instrument as is being offered to the public. (k) A statement that the issuer, its directors or the lead merchant bankers have not entered into any buy back arrangements for purchase of the specified securities of the issuer, other than the arrangements, if any, entered for safety net facility as permitted in the Regulations. In case any safety net is provided in the issue, the lead merchant banker shall certify that the person offering the safety net has the ability to honour the commitments and disclose the same in the offer document. Further, complete details shall be given regarding safety net arrangements such as number of specified securities covered, duration, price, complete terms of guarantee, if any, given by any person, including conditions subject to which the guarantee may be invoked. (l) A stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed on the basis of the transfers as recorded in the books of the issuer and/or the depository, as applicable and a statement to such effect shall be made in the offer document. (r) The details of options granted or equity shares issued under any scheme of employee stock option or employee stock purchase of issuer, in last three years (separately for each year) and on a cumulative basis for all options or equity shares issued prior to the date of the offer document, including the following details in cases where options granted to employees in pursuance of any employee stock option scheme existing prior to the initial public offer, are outstanding at the time of the initial public offer: (i) options granted; (ii) the pricing formula; (iii) options vested; (iv) options exercised; (v) the total number of shares arising as a result of exercise of option; (vi) options lapsed; (vii) variation of terms of options; (viii) money realised by exercise of options; (ix) total number of options in force; (x) employee-wise details of options granted to: * senior managerial personnel; * any other employee who receives a grant in any one year of options amounting to five per cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under an employee stock purchase scheme within three months after the date of listing, by directors, senior managerial personnel and employees having equity shares issued under an employee stock option scheme or employee stock purchase scheme amounting to more than one per cent. of the issued capital (excluding outstanding warrants and conversions), which inter-alia shall include name, designation and quantum of the equity shares issued under an employee stock option scheme or employee stock purchase scheme and the quantum they intend to sell within three months. 11[(xviii) the details of the number of shares issued in ESPS, the price at which such shares are issued, employee-wise details of the shares issued to • senior managerial personnel; • any other employee who is issued shares in any one year amounting to 5% or more shares issued during that year; • identified employees who were issued shares during any one year equal to or exceeding 1% of the issued capital of the company at the time of issuance; (xix) diluted Earning Per Share (EPS) pursuant to issuance of shares under ESPS; and consideration received against the issuance of shares.] (s) In case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. (e) A complete perspective on the present working capital position vis-à-vis the projected one based on which the money is proposed to be raised in the public issue. (f) Details of the existing working capital available to the issuer with a break up for total current assets into raw materials, finished goods, work in progress, sundry debtors, etc., total current liabilities, net current assets and sources of finance for net current assets i.e. bank finance, institutional finance, own funds etc.. (g) If no working capital is shown a part of project, the reasons therefor. (5) Disclosure of asset cover etc. in case of public issue of secured convertible debt instruments: The details of the assets on which security/ asset cover, if required, shall be created, the basis for computation of the security/asset cover, the valuation methods, the periodicity of such valuation and the ranking of the charge(s). 12[(6) Full disclosures in the draft offer document or offer document as the case may be, shall be made for warrants issued al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Deployment of Funds: (1) The details of the sources of funds and the deployment of these funds on the project (where the issuer is raising capital for a project), up to a date not earlier than two months from the date of registering the offer document with the Registrar of Companies, as certified by a Chartered Accountant, along with the name of the chartered accountant and the date of the certificate. (2) Where the promoters' contribution has been brought prior to the public issue and has already been deployed by the issuer, the issuer shall give the cash flow statement in the offer document disclosing the use of such funds received as promoters' contribution. (G) Sources of Financing of Funds Already Deployed: The means and source of financing, including details of bridge loan or other financial arrangement, which may be repaid from the proceeds of the issue. (H) Deployment of Balance Funds: Year-wise break up of the expenditure proposed to be incurred on the project. (I) 13[Interim Use of Funds: Net issue proceeds pending utilization (for the stated objects) shall be deposited only in the scheduled commercial banks included in the Second Schedule of Reserve Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial information relating to companies in the peer group shall be extracted from regulatory filings made by such companies to compute corresponding financial ratios. (i) The fact of dilution of financial ratios consequent upon issue of bonus shares, if any, and justification of the issue price after taking into account the diluted ratios with reference to expanded capital. (j) In case of a book built issue, the following statement shall be disclosed in the red herring prospectus: "The issue price has been determined by the issuer in consultation with the book runner(s), on the basis of assessment of market demand for the offered securities by way of book-building." (k) The face value of equity shares and the statement that the issue price, floor price or price band, as the case may be, is "X" times of the face value. (l) The accounting ratios disclosed in the offer document 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. (2) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, past production figures for the industry, existing installed 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. The source of data used shall be mentioned. (iii) The approach to marketing and proposed marketing set up. (iv) The export possibilities and export obligations, if any (in case of a issuer providing any "service" particulars, as applicable). (2) Business strategy: (a) A brief statement about business strategy. (b) A brief statement about future prospects, including the following: (i) Capacity and Capacity Utilisation: * A table shall be incorporated giving the existing installed capacities for each product, capacity utilisation for these products in the previous three years, proposed capacities for existing as well as proposed products and the assumptions for future capacity utilisation for the next three years (from the date of commencement of commercial production) in respect of existing as well as proposed products. * If the projected capacity utilisation is higher than the actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se or acquisition of which has not been completed at the date of issue of the offer document, other than property: (i) the contract for the purchase or acquisition whereof was entered into in the ordinary course of the issuer's business, the contract not being made in contemplation of the issue nor the issue in consequence of the contract; or (ii) as respects which the amount of the purchase money is not material. * for the purpose of this clause, where a vendor is a firm, the members of the firm shall not be treated as separate vendors. * if the issuer proposes to acquire a business which has been carried on for less than three years, the length of time during which the business has been carried. (6) Land : (a) The names of the entities from whom the land has been acquired/ proposed to be acquired alongwith the cost of acquisition, along with the relation, if any, of such entities to any promoter or director of the issuer. (b) Details of whether the land acquired by the issuer is free from all encumbrances and has a clear title and whether it is registered in the name of the issuer. (c) Details of whether the issuer has applied/ received all the approvals pertaining to l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technology, market, managerial competence and capacity built-up. (g) Details regarding acquisition of business/undertakings, mergers, amalgamation, revaluation of assets etc, if any. (h) The number of members/ shareholders of the issuer. (2) Main objects as set out in the Memorandum of Association of the issuer (3) Details regarding subsidiary(ies) of the issuer including: (a) Name of the subsidiary; (b) nature of business; (c) capital structure; (d) shareholding of the issuer; (e) amount of accumulated profits or losses of the subsidiary(ies) not accounted for by the issuer; (f) 15[***] (4) Shareholders' agreements: (a) Key terms of subsisting shareholders' agreements, if any (to be provided even if the issuer is not a party to such an agreement, but is aware of such an agreement). (b) Guarantees, if any, given to third parties by the promoters offering their shares in the proposed offer for sale, stating reasons, amount, obligations on the issuer, period of guarantee, financial implications in case of default, security available, consideration etc. (c) All such agreements shall be included in the list of material contracts required under sub-item (A) of Item 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ily relationship between any of the directors. (c) Any arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which of the directors was selected as a director or member of senior management. (d) Details of service contracts entered into by the directors with the issuer providing for benefits upon termination of employment and a distinct negative statement in the absence of any such contract. (e) Details of borrowing powers. (2) Compensation of Managing Directors/ Whole time Directors: (a) The dates, parties to, and general nature of every contract appointing or fixing the remuneration of a Director, Whole-time Director, Managing Director or Manager whenever entered into within or more than, two years before the date of the offer document. During the last financial year, the amount of compensation paid, and benefits in kind granted on an individual basis to all such persons, by the issuer for services in all capacities to the issuer. The disclosure shall also cover contingent or deferred compensation accrued for the year, even if the compensation is payable at a later date. (b) If any portion of the compensation was paid pursuant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding with major shareholders, customers, suppliers or others, pursuant to which any of the key managerial personnel, was selected as a director or member of senior management. (e) During the last financial year, the amount of compensation paid, and benefits in kind granted, to the key managerial personnel on an individual basis, by the issuer for services in all capacities to the company. The disclosure shall also cover contingent or deferred compensation accrued for the year, even if the compensation is payable at a later date. (f) If any portion of the compensation was paid pursuant to a bonus or profit-sharing plan, a brief description of the plan and the basis upon which the key management personnel participate in the plan. (g) Disclose status of key management personnel, whether they are in the employment as permanent employees or otherwise. (h) The shareholding of the key management personnel. (i) Bonus or Profit Sharing Plan for the key management personnel. (j) Changes in the Key Management Personnel: Any change otherwise than by way of retirement in the normal course in the senior key management personnel particularly in charge of production, planning, finance and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re registered have been submitted to the recognised stock exchanges on which the specified securities are proposed to be listed, at the time of filing the draft offer document with them; 19[(2A) Where the shares for lock-in towards minimum promoters contribution is offered by principal shareholders such as Venture Capital Funds or Foreign Venture Capital Investors registered with SEBI: (a) Details of Fund Manager; (b) Generic details of the Fund which is the investor in the issuer company; (c) Details such as total number of investors in the Fund, distribution of investors category - wise (institutional, corporate, individual etc.) and percentage stake held by each investor category; (d) Details of companies funded by the Funds, namely:- (i) Total number of companies funded; (ii) Distribution of such companies- country wise, holding period wise, sector wise; (iii) Number of companies under the control of the Fund, directly or indirectly; (iv) In respect of companies where such Funds have offered their shares for lock-in as part of minimum promoter's contribution:- * Name of the company * Date of listing on each stock exchange * Fund's shareholding in the company as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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. (d) in any transaction in acquisition of land, construction of building and supply of machinery, etc. with full details of the transaction and the amount involved (9) Payment or benefit to promoters of the issuer: Any amount or benefit paid or given within the two years preceding the date of filing draft offer document with the Board or intended to be paid or given to any promoter or promoter group and consideration for payment of giving of the benefit. (G) Currency of presentation: One standard financial unit shall be used in the offer document. (H) Dividend policy (IX) Financial Statements: 20[[Notes: 1. The financial informations specified in this item shall be certified by only those auditors who have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the 'Peer Review Board' of the ICAI. 2. All financial informations specified in this item must be reaudited for one full financial year and the stub period, by the auditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuer has subsidiaries, the report shall: (a) so far as regards profits and losses, deal separately with the issuer's profits or losses as provided by para (2) of sub-item (B) of Item (IX) 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; or (ii) individually with the profits or losses of each subsidiary, so far as they concern the members of the issuer; or, instead of dealing separately with the issuer's profits or losses, deal as a whole with the profits or losses of the issuer, and, so far as they concern the members of the issuer, with the combined profits or losses of its subsidiaries; and (b) so far as regards assets and liabilities, deal separately with the issuer's assets and liabilities as provided by para (2) of sub-item (B) of Item (IX) and in addition, deal either: (i) as a whole with the combined assets and liabilities of its subsidiaries, with or without the issuer's assets and liabilities; or (ii) individually with the assets and liabilities of each subsidiaries; and shall indicate as respects the assets and liabilities of the subsidiaries, the allowance to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the issuer and its subsidiaries. (6) Principal terms of loan and assets charged as security: Brief terms and conditions of the term loans including re-schedulement, prepayment, penalty, default, etc. (7) (a) Age-wise analysis of sundry debtors shall be given. (b) Aggregate book value of quoted investments as well as aggregate market value of quoted investments shall be disclosed. (8) All significant accounting policies and standards followed in the preparation of the financial statements shall be disclosed including all notes thereto and the auditors' qualifications shall be incorporated. (9) Statements of Assets and Liabilities and Profit and Loss or any other financial information shall be incorporated after making the following adjustments, wherever quantification is possible: (a) Adjustments/ rectification for all incorrect accounting practices or failures to make provisions or other adjustments which resulted in audit qualifications.. Audit qualifications, which have not been given effect to, if any, shall be highlighted along with the management comments. If the impact of non-provisions is not considered ascertainable, then a statement to that effect by the aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lip; 20X1 20X2 20X3 20X4 20X5 (Rupees in lakhs) (1) Equity & Liabilities Shareholders' Funds (a) Share capital (b) Reserves & surplus (2) Non Current Liabilities (a) Long term borrowings (b) Deferred tax liabilities (net) (c) Long term provisions (3) Current Liabilities (a) Short term borrowings (b) Trade payables (c) Other current liabilities (d) Short term provisions Total Assets (4) Non Current Assets (a) Fixed Assets (b) Non current investments (c) Long term loans and advances (d) Other non current assets (5) Current Assets (a) Current Investments (b) Inventories (c) Trade receivables (d) Cash and bank balances (e) Short term loans and advances (f) Other current assets Total ] (g) Relevant details of all the contingent liabilities. (10) The turnover disclosed in the Profit and Loss Statement shall be bifurcated into: (a) turnover of products manufactured by the issuer; (b) turnover of products traded in by the issuer; and (c) turnover in respect of products not normally dealt in by the issuer but included in (b) above, shall be mentioned separately. (11) The offer document shall disclose details of `Other Income' in all cases whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given for each of the accounting periods for which financial information is given. (b) Earnings per Share and Diluted Earnings Per Share: This ratio shall be calculated after excluding extra ordinary items. (c) Return on net worth: This ratio shall be calculated after excluding revaluation reserves and extra-ordinary items. (d) Net Asset Value per share. This ratio shall be calculated excluding revaluation reserves. (e) 'Accounting and other Ratios' shall be based on the Financial Statements prepared on the basis of Indian Accounting Standards. (f) In the event of capital structure undergoing a change on account of capitalisation of reserves, its impact on the key ratios should be distinctly brought out. The impact of outstanding financial instruments, if any, on the ratios, should also be disclosed. (14) Capitalisation Statement: (a) A Capitalisation Statement showing total debt, net worth, and the debt/ equity ratios before and after the issue is made shall be incorporated. (b) In case of any change in the share capital since the date as of which the financial information has been disclosed in the offer document, a note explaining the nature of the change shall be given. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ten affected by the tax shelters which are available. (b) Some of these are of a relatively permanent nature (for example, arising out of export profits) while others may be limited in point of time (for example, tax holidays for new undertakings). (c) Tax provisions are also affected by timing differences which can be reversed in the future (for example, the difference between book depreciation and tax depreciation). (d) In respect of provision for taxation, adjustment shall be made for deferred tax assets and deferred tax liabilities in accordance with the requirements of Accounting Standard (AS 22) "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India and a reconciliation of taxable income and book profits shall be disclosed in accordance with the illustrative format given hereunder: Year ended March 31, …. 20X1 20X2 20X3 20X4 20X5 (Rupees in lakhs) Tax at Notional Rate 28 70 89 546 675 Adjustments: Export Profits (4) (5) (20) (100) (120) Difference between Tax Depreciation and Book Depreciation (6) (8) (9) (10) (10) Other Adjustments 3 3 4 4 5 Net Adjustments (7) (10) (25) (106) (125) Tax Savi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, disclosure of the accounting treatment had the applicable standard been followed. (c) Impact on the financials, if any, arising due to such deviation.] 25[(23) Proforma Financial Statements (1) In addition to other requirements laid down in these regulations and subject to the stipulation in sub-para (3) of this para, the issuer shall disclose Proforma Financial Statements in the offer document, if- (a) an acquisition or divestment is made by the issuer after the end of the latest disclosed annual financial results in the offer document, due to which certain companies become/cease to be direct or indirect subsidiaries of the issuer, and (b) the financial statements of such acquired or divested entity is material to the financial statements of the issuer company. Explanation: The financial statements of the acquired or divested entity shall be "material" to the financial statements of the issuer if: (i ) the total book value of the assets of the acquired/ divested entity amounts to more than 20% of the pre-acquisition/pre-divestment book value of the assets of the issuer; or (ii) the total income of the acquired/divested entity amounts to more than 20% of the pre-acqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where audited accounts as at such date are not available. (3) For the purpose of sub-clauses (1) and (2) above, it shall be sufficient if: (a) In the statement of the assets and liabilities, the main heads of assets and liabilities as provided in Part I of Schedule VI of the Companies Act, 1956 have been provided. If an issuer is governed by a statute other than the Companies Act, 1956, the main heads of assets and liabilities as specified in such statute shall be provided in the statement of assets and liabilities. (b) In the statement of profit or loss, the information required to be disclosed under the heads of income and expenditure as per clause 41 of the equity listing agreement in respect of quarterly financial information to be filed with the recognised stock exchanges, has been provided. (ii) In addition, the following information for the period between the last date of the balance sheet and profit and loss account sent to the shareholders and up to the end of the last but one month preceding the date of the offer document shall be furnished. (1) Working results of the issuer under following heads: (a) (i) Sales / turnover (ii) Other income (b) Estimated gross prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vehicle set up by any of them, the following information for the last three years, based on the audited statements, in respect of all the group companies for past three years shall be given, wherever applicable, along with significant notes of auditors. (a) Date of Incorporation; (b) Nature of activities; (c) Equity Capital; (d) Reserves (excluding revaluation reserve); (e) Sales; (f) Profit after tax; (g) Earnings per share and Diluted Earnings Per Share; (h) Net Asset Value; (i) The highest and lowest market price of shares during the preceding six months with suitable disclosures for changes in capital structure during the period and the market value on the date of registering the offer document 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 offer document. (k) Information regarding significant adverse f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon Pursuits: (a) In case there are common pursuits among the group- companies/ subsidiaries/associates companies and the issuer, the reasons and justification for the same shall be spelt out and the conflict of interest situations shall be stated. (b) The related business transactions within the group and their significance on the financial performance of the issuer. (5) Sales or purchase between group companies/subsidiaries/ associate companies when such sales or purchases exceed in value in the aggregate ten per cent. of the total sales or purchases of the issuer and also disclose material items of income or expenditure arising out of such transactions (6) If any of the other group companies/subsidiaries/associate companies has business interests in the issuer then the amount of commercial business that the said company has /proposes to have with the issuer may be quantified. If no, a distinct negative statement may be incorporated to this effect. (D) Changes in accounting policies in the last three years (E) Management's Discussion and Analysis of Financial Condition and Results of Operations as Reflected in the Financial Statements. (1) Overview of the business of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rations; (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 issuer 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. (6) 'Management's Discussion and Analysis of Financial Condition and Results of Operations as Reflected in the Financial Statements' shall be based on the financial statements prepared on the basis of Indian accounting practices and may additionally be presented based on other accounting practices and shall also include the post audit period.. (X) Legal and Other Info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner, if yes, whether the Board has initiated any action against the said entities and the related details. (D) Eligibility of the issuer to enter the capital market. Details of compliance with eligibility requirements to make a fast track issue, if applicable. (E) It may be disclosed whether the issuer, promoters, group companies, the relatives (as per Companies Act, 1956) of promoters, group companies are identified as wilful defaulters 30[***]. (F) Compliance with Part B of this Schedule, as the case may be, if applicable. (G) Disclaimer clauses: (1) The offer document shall contain the following disclaimer clause in bold capital letters: "It is to be distinctly understood that submission of offer document to the Securities and Exchange Board of India (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. The lead merchant banker, ______________ has certified that the disclosures made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and documents referred to elsewhere in the offer document, has been registered. (M) Listing: Names of the designated stock exchange and other recognised stock exchanges to which application has been made for listing of the specified securities offered in the present issue. (N) Consent of the Directors, auditors, solicitors or advocates, merchant bankers to the issue, registrar to the issue, bankers to the issuer, lenders and experts. (O) Expert opinion obtained, if any. (P) Expenses of the issue along with a break up for each item of expense and shall include details of fees payable to .(in terms of amount, as a percentage of total issue expenses and as a percentage of total issue size) separately as under: (1) Lead merchant bankers. (2) Co-lead merchant bankers, if any (3) Co-managers, if any (4) Other merchant bankers (5) Registrars to the issue. (6) Advisors (7) Bankers to issues (8) Trustees for the debt instrument holders. (9) Underwriting commission, brokerage and selling commission. (10) Others, if any (specify). (Q) Previous public or rights issues, if any (during the last five years): (1) Closing Date. (2) Date of allotment. (3) Date of refunds. (4) Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t with the Board were met. (b) If not, non-achievement of objects shall be brought out distinctly. Shortfall and delays shall be quantified. (V) Outstanding debentures or bonds and redeemable preference shares and other instruments issued by the issuer outstanding as on the date of offer document and terms of issue. (W) Stock market data for equity shares of the issuer, if listed: The particulars of: (1) high, low and average market prices of the share of the issuer during the preceding three years; (2) monthly high and low prices for the six months preceding the date of filing the draft offer document with the Board which shall be updated till the time of registering the offer document with the Registrar of Companies; (3) number of shares traded on the days when high and low prices were recorded in the relevant stock exchange(s) during the said period of (a) and (b) above and indicating the total number of days of trading during the six months preceding the date of filing the draft offer document and the average volume of shares traded during that period and if the shares were not actively traded, such fact shall be disclosed; (4) the stock market data referred to above sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue price/ floor price/ price band. (5) Rights of the instrument holders. (6) Market lot. (7) Nomination facility to investor. (8) The period of operation of subscription list of public issue. (9) Minimum subscription: (a) For Non-underwritten Public Issues: The following statement shall appear: "If the issuer does not receive the minimum subscription of ninety per cent. of the offer through offer document on the date of closure of the issue, or if the subscription level falls below ninety per cent. after the closure of issue on account of cheques having being returned unpaid or withdrawal of applications, the issuer shall forthwith refund the entire subscription amount received. If there is a delay beyond eight days after the issuer becomes liable to pay the amount, the issuer shall pay interest as per section 73 of the Companies Act, 1956." (b) For Underwritten Public Issues: The following statement shall appear: "If the issuer does not receive the minimum subscription of ninety per cent. of the offer through offer document including devolvement of Underwriters within sixty days from the date of closure of the issue, the issuer shall forthwith refund the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an option to either receive securities in the form of physical certificates or hold them in a dematerialised form. (B) Issue Procedure: The following disclosures shall be made: (1) Fixed price issue or book building procedure as may be applicable, including details regarding bid form / application form, who can bid/apply, maximum and minimum bid/application size, bidding process, bidding, bids at different price levels, etc. (2) Option to subscribe in the issue: (a) The details of option, if any, to receive the specified securities subscribed for either in demateralised form or physical form. If the issue size, in case of a public issue is equal to rupees ten crores or more, the specified securities issued in the public issue shall be only in dematerialized form in compliance with Section 68B of the Companies Act, 1956. It shall be disclosed that furnishing details of depositories account is mandatory and applications without depositories account shall be treated as incomplete and rejected. Investors will not have the option of getting the allotment of specified securities in physical form. However, they may get the specified securities rematerialised subsequent to allotment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be made in the offer document. (ii) Disclosure that the application form shall bear the stamp of the syndicate member / SCSBs 34[/ RTAs / DPs / stock brokers] and if not, the same shall be rejected. (4) Escrow mechanism: (a) Escrow account of the issuer. (b) Escrow account of the syndicate member. (5) Terms of payment and payment into the escrow collection account. (6) Electronic registration of bids. (7) Build up of the book and revision of bids. In this regard, it may be specifically disclosed that qualified institutional buyers shall not be allowed to withdraw their bids after the closure of the issue (8) Price discovery and allocation. (9) Signing of underwriting agreement. (10) Filing of the offer document with the Registrar of Companies. (11) Announcement of pre-issue advertisement. (12) Issuance of Confirmation of Allocation Note ("CAN") and allotment in the Issue. (13) Designated date. (14) General instructions: (a) Do's and don'ts. (b) Instructions for completing the bid form. (c) Bidders' bank account details. (d) Bids by non-resident Indians or 35[foreign portfolio investors] on repatriation basis (15) Payment instructions: (a) Payment into escrow ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pported by Blocked Amount process. Ensure that "at par" facility is provided for encashment of refund orders for Applications other than Application Supported by Blocked Amount process. (28) Mode of making refunds: (a) The mode in which the issuer shall refund the application money to applicants in case of oversubscription shall be disclosed in the offer document. (b) If the issuer proposes to use more than one mode of making refunds to applicants, the respective cases where each such mode will be adopted shall be disclosed. The permissible modes of making refunds are as follows: (i) In case of applicants residing in any of the centres specified by the Board: by crediting of refunds to the bank accounts of applicants through electronic transfer 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; 36[(ii) In case of other applicants: by dispatch of refund orders by registered post, (subject however to postal rules); and] (iii) In case of any category of applicants specified by the Board: crediting of refunds to the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of allotment; (iii) that the issuer shall apply in advance for the listing of equities on the conversion of debentures/ bonds; (iv) that funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be made available to the registrar to the issue by the issuer; (v) that where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within fifteen days of closure of the issue giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund; (vi) that the promoters' contribution in full, wherever required, shall be brought in advance before the Issue opens for public subscription and the balance, if any, shall be brought in pro rata basis before the calls are made on public; (vii) that the certificates of the securities or refund orders to the non-resident Indians shall be despatched within specified time; (viii) that no further issue of securities shall be made till the securities offered through this offer document are listed or till the application moneys are refunded on account of non-listing, under subscription, etc.; ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1956; (ii) details of all monies utilised out of the issue referred to in sub-item(i) shall be disclosed and continue to be disclosed till the time any part of the issue proceeds remains unutilised under an appropriate separate head in the balance-sheet of the issuer indicating the purpose for which such monies had been utilised; and (iii) details of all unutilised monies out of the issue of specified securities referred to in sub-item (i) shall be disclosed under an appropriate separate head in the balance sheet of the issuer indicating the form in which such unutilised monies have been invested. (b) The prospectus for an issue other than an offer for sale or a public issue made by any bank or public financial institution shall contain a statement of the board of directors of the issuer to the effect that: (i) the utilisation of monies received under promoters' contribution and from reservations shall be disclosed and continue to be disclosed under an appropriate head in the balance sheet of the issuer, till the time any part of the issue proceeds remains unutilised, indicating the purpose for which such monies have been utilised; (ii) the details of all unutilised monies out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of item (VIII); (6) Para (1) of sub-item (C) of item (IX), in respect of entities not covered under section 370 (1)(B) of the Companies Act, 1956; PART C CERTAIN DISCLOSURES NOT MANDATORY IN CASE OF FURTHER PUBLIC OFFER (1) An issuer making a further public offer of specified securities may not make the disclosures indicated hereunder and specified in Part A of this Schedule, in the offer document, subject to fulfilment of the conditions specified in para 2: (i) Sub-para (a) of para (2) of sub-item (D) of item (VI); (ii) Sub-para (o) of para (2) of sub-item (D) of item (VI); (iii) Para (8) of sub-item (E) of item (VIII); (iv) Para (1) of sub-item (C) of item (IX), in respect of entities not covered under section 370 (1)(B) of the Companies Act, 1956; (2) The conditions referred to in para (1) above are as follows: (a) The issuer has been filing periodic statements in regard to financial results and shareholding pattern with the designated stock exchange and also with the Registrar of Companies (in case of a public issue), for the last three years and such statements are available on the website of the designated stock exchange or on a common e-filing platform; (b) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order in which items appear in the abridged prospectus shall be as specified by the Board. (VIII) 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."] PART E [See regulation 57(2)(b)] DISCLOSURES IN LETTER OF OFFER (1) A listed issuer making a rights issue of specified securities shall make disclosures, as specified in clause (5) of this Part, in the letter of offer, if it satisfies the following conditions: (a) the issuer 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 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 the draft letter of offer with the Board; (b) the reports, statements and information referred to in sub-clause (a) above are available on the website of any recognised stock exchange with nationwide trading terminals or on a common e-filing platform specified by the Board; (c) the issuer has investor grievance-handling mechanism which includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferably minimum hundred gcm. quality). (A) Front Cover Pages: (1) The front outside and inside cover pages of the letter of offer shall be white and no patterns or pictures shall be printed on these pages. (2) The front outside cover page of the letter of offer shall contain only the following details: (a) The words "Letter of Offer". (b) The name of the issuer, its logo, address of its registered office, its telephone number, fax number, contact person, website address and e-mail address. (c) The nature, number, price and amount of specified securities 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 and the offer including the risks involved. The securities being offered in the issue have not been recommended or approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e; (2) the issuer and its ongoing business activities; (3) the material litigations which impact the business of the issuer. (C) The risk factors shall be determined on the basis of their materiality. In determining the materiality of risk factors, the following shall be considered: (1) Some events may not be material individually but may be found material collectively. (2) Some risks may have an impact which is qualitative though not quantitative. (3) 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. (D) The risk factors shall appear in the letter of offer in the following manner: (1) The risks envisaged by the management. (2) The proposals, if any, to address the risks and the manner in which the same are proposed to be addressed. (E) The proposals to address risks shall not contain any speculative statement on the positive outcome to any litigation, etc. (F) The proposals to address risks shall not be given for any matter that is sub-judice before any Court or Tribunal. (G) The risk factors shall be disclosed in the descending order of materiality. Wherever risks about material im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings including unaccepted rating obtained for the issue of convertible debt instruments. (b) All credit ratings obtained during the three previous years before filing the letter of offer for any of its listed convertible debt instruments at the time of accessing the market through a convertible debt instrument. (6) 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. (7) The name of the monitoring agency, if appointed and the disclosure as to whether the appointment is pursuant to regulation 16 of these regulations. (8) The name, address, telephone number and e-mail address of the appraising entity, in case the project has been appraised. (9) The details of underwriting, if any: (a) The names, address, telephone numbers, fax numbers and e-mail address of the underwriters and the amount underwritten by them. (b) A declaration by the board of directors of the issuer that the underwriters have sufficient resources to discharge their respective obligations. (c) In case of partial underwriting of the issue, the extent of underwriting. (d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) If the investment is in debt instruments, complete details regarding the rate of interest, nature of security, terms of repayment, subordination, etc. (d) If the investment is in equity, whether any dividends are assured; (e) The nature of benefit expected to accrue to the issuer as a result of the investment; (3) If one of the objects of the issue is the grant of a loan to any entity, details of the loan agreements including the rate of interest, whether secured or unsecured, duration, nature of security, terms of repayment, subordination, etc. and the nature of benefit expected to accrue to the issuer as a result of the investment. If such loan is to be granted to a subsidiary, group or associate company, details of the same. (4) If one of the objects of the issue is utilisation of the issue proceeds for long term working capital, the following additional disclosures shall be made. (a) Basis of estimation of working capital requirement, along with relevant assumptions. (b) Reasons for raising additional working capital, substantiating the same with relevant facts and figures. (c) Details of the projected working capital requirement including detailed assessment of wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) infrastructure facilities for raw materials and utilities like water, electricity, etc. (7) If the proceeds, or any part of the proceeds, of the issue 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 issuer will become entitled to an interest as Page 166 of 255 respects either the capital or profits and losses or both, in such business exceeding fifty percent, thereof; a report made by accountants (who shall be named in the letter of offer) upon: (i) the profits or losses of the business of each of the five financial years immediately preceding the issue of the letter of offer; and (ii) 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. (8) If: (a) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountant and the date of the certificate. (2) Where share application money brought in advance by the promoters is deployed in the project and the same is being adjusted towards their rights entitlement in the rights issue, the extent of deployment and utilisation of the funds brought in by the promoters shall be disclosed. (H) Sources of Financing of Funds Already Deployed: Means and source of financing, including details of "bridge loan" or other financial arrangement, which may be repaid from the proceeds of the issue. (I) Details of Balance Fund Deployment: Year wise break up of the expenditure proposed to be incurred on the said project. (J) 45[Interim Use of Funds: Net issue proceeds pending utilization (for the stated objects) shall be deposited only in the scheduled commercial banks included in the Second Schedule of Reserve Bank of India Act, 1934.] (K) Any special tax benefits for the issuer and its shareholders. (L) Key Industry Regulations for the proposed objects of the issue (if different from existing business of the issuer) (M) Interest of promoters and directors, as applicable to the project or objects of the issue (VIII) History and Corporate Stru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e directors with the issuer providing for benefits upon termination of employment and a distinct negative statement in the absence of any such contract. (X) Financial Information of the Issuer: (A) Stand-alone and consolidated financial statements of the issuer: (4) A report by the auditors of the issuer with respect to profit or loss and assets and liabilities (indicating changes in accounting policies, if any) in respect of the last completed accounting year for which audit has been completed. (5) A report by the auditors of the issuer on a limited review of the profit or loss and assets and liabilities (indicating changes in accounting policies, if any), as at a date not earlier than six months prior to the date of the opening of the issue, where audited accounts as at such date are not available. (6) For the purpose of clauses (1) and (2) above, it shall be sufficient if: (a) In the statement of the assets and liabilities, the main heads of assets and liabilities as provided in Part I of Schedule VI of the Companies Act, 1956 have been provided. If an issuer is governed by a statute other than the Companies Act, 1956, the main heads of assets and liabilities as specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illustrative format of the Capitalisation Statement is specified hereunder: Particulars Pre-issue as at 30-6-1995 As Adjusted for issue (Rupees in lakhs) Short-Term Debt 1870 1870 Long Term Debt 4370 4370 Shareholders Funds Share Capital 4000 4450 Reserves 14570 37520 Total Shareholders Funds 18570 41940 Long Term Debt/Equity 0.24:1 0.10:1 Note: Since 31-3-1995 (which is the last date as of which financial information has been given in para … of this document), share capital was increased from ₹ 3000 lacs to ₹ 4000 lacs by the issue of bonus shares in the ratio of 1 share for every 3 shares. (F) One standard financial unit shall be used in the Letter of Offer (XI) A statement to the effect that the price has been arrived at in consultation between the issuer and the Merchant banker. (XII) Outstanding Litigations and Defaults: The following details shall be disclosed by the issuer: (A) Pending matters which, if they result in an adverse outcome, would materially and adversely affect the operations or the financial position of the issuer. (B) Matters which are pending or which have arisen in the immediately preceding ten years involvin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave not been prohibited from accessing or operating in the capital markets or restrained from buying, selling or dealing in securities under any order or direction passed by the Board. (C) A confirmation whether any of the directors of the issuer are associated with the securities market in any manner, if yes, whether the Board has initiated any action against the said entities and the related details. (D) It may be disclosed whether the issuer, promoters, group companies, the relatives (as per Companies Act,1956) of promoters, group companies are identified as willful defaulters 47[***]. (E) A statement to the effect that the issuer is in compliance with provisions specified in Part E of this Schedule. (F) Details of compliance with eligibility requirements to make a fast track issue, if applicable. (G) Disclaimer clauses: (1) The letter of offer shall contain the following disclaimer clause in bold capital letters: "It is to be distinctly understood that submission of Letter of Offer 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 sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent in this issue. (3) Disclaimer in respect of jurisdiction: A brief paragraph mentioning the jurisdiction under which provisions of law and the rules and regulations are applicable to the letter of offer. (4) Disclaimer clause of the stock exchanges, if any (5) Disclaimer clause of the Reserve Bank of India (if applicable). (H) The fact of filing the letter of offer with the Board and the stock exchange(s) and the office of the Board where the letter of offer has been filed (I) Details of fees payable to (in terms of amount, as a percentage of total issue expenses and as a percentage of total issue size): (1) Lead merchant bankers. (2) Co-lead merchant bankers, if any (3) Co-managers, if any (4) Other merchant bankers (5) Registrars to the issue (6) Advisors (7) Bankers to the issue (8) Trustees for the debt instrument holders. (9) Others (10) Underwriting commission, brokerage and selling commission. (J) Arrangements or any mechanism evolved by the issuer for redressal of investor grievances and the time normally taken by it for disposal of various types of investor grievances. (XVI) Offering Information: (A) Terms of payments and procedure and time schedule fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not renounce their rights and shall not utilise the application form for any purpose including renunciation even if it is received subsequently. 48[(BA) Dealing with Fractional Entitlement: Manner of dealing with fractional entitlement viz. payment of the equivalent of the value, if any, of the fractional rights in cash etc.] (C) Provisions of sub-section (1) of section 68A of the Companies Act, 1956 relating to punishment for fictitious applications, including the disclosures that any person who: (1) makes in a fictitious name an application to a company for acquiring, or subscribing for, any shares therein, or (2) otherwise induces a company to allot, or register any transfer of, shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years. (D) Declaration about the credit of specified securities to the demat account / refunds within a period of fifteen days and interest in case of delay in refund at the prescribed rate. (E) Mode of making refunds: (1) The mode in which the issuer shall make refunds to applicants in case of oversubscription. (2) If the issuer proposes to use more tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebenture trustees at the end of each half-year. (2) the issuer shall disclose the complete name and address of the debenture trustee in the annual report. (3) the issuer shall provide a compliance certificate to the convertible debt instrument holders (on yearly basis) in respect of compliance with the terms and conditions of issue of debentures as contained in the Letter of Offer, duly certified by the debenture trustee. (4) the issuer shall furnish a confirmation certificate that the security created by the company in favour of the convertible debt instrument holders is properly maintained and is adequate to meet the payment obligations towards the convertible debt instrument holders in the event of default. (5) necessary cooperation with the credit rating agency (ies) shall be extended in providing true and adequate information till the debt obligations in respect of the instrument are outstanding. (XVIII) Utilisation of Issue Proceeds: The letter of offer for an issue other than a rights issue made by any bank or public financial institution shall contain a statement of the board of directors of the issuer to the effect that: (A) all monies received out of issue of shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utive 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 following statement shall be disclosed: "No statement made in this letter of offer contravenes any of the provisions of the Companies Act, 1956 and the rules made thereunder. All the legal requirements connected with the issue as also the guidelines, instructions, etc., issued by SEBI, Government and any other competent authority in this behalf, have been duly complied with." (C) The signatories shall further certify that all disclosures made in the letter of offer are true and correct. (6) A listed issuer making disclosures in the letter of offer as per this Part shall make a copy of the offer document of the immediately preceding public issue or rights issue available to the public in the manner specified in sub-regulation (1) of regulation 61 and shall also make such document available as a material document for inspection. 50[(7) Full disclosures in the draft letter of offer or letter of offer as the case may be shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board. (2) The fact that the issuer or any of its promoters or directors is a wilful defaulter shall be disclosed prominently on the cover page with suitable cross-referencing to the pages. (3) Disclosures specified herein shall be made in a separate chapter or section distinctly identifiable in the Index / Table of Contents.] ********* 1 Substituted by the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2015, w.e.f. 14.08.2015. Prior to its substitution, it read as under : The words "group companies", wherever they occur, shall mean companies, firms, ventures, etc. promoted by the promoters of the issuer, irrespective of whether such entities are covered under section 370(1)(B) of the Companies Act, 1956 or not. 2 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2011, w.e.f. 23.09.2011. 3 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2011, w.e.f. 23.09.2011. 4 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2012, w.e.f. 12.10.2012. 5 Inserted by the SEBI (Issue of Capital and Disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, sub-clause (f) read as under: "(f) amount of accumulated profits or losses of the subsidiary(ies) not accounted for by the issuer." 16 Substituted for "(XII)" by the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2010, w.e.f. 12.11.2010. 17 Inserted by the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2010, w.e.f. 12.11.2010. 18 Substituted for "discussed" by SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2010, w.e.f. 13.04.2010. 19 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2012, w.e.f. 30.01.2012. 20 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2009, w.e.f. 01.04.2010. 21 Substituted by the SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2014, w.e.f. 4-2-2014. Prior to its substitution, said illustrative format read as under: "As at March 31, …. 20X1 20X2 20X3 20X4 20X5 (Rupees in lakhs) (1) Fixed Assets Gross Block 440 750 900 922 1350 Less : Depreciation (55) (107) (170) (250) (320) Net Block 385 643 730 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issuer or its directors along with their present status; (e) Adverse findings, if any, in respect of the issuer as regards compliance with the securities laws; (f) The details of the past cases in which penalties were imposed by the authorities concerned on the issuer or its directors; (g) Outstanding litigations, defaults, etc. pertaining to matters likely to affect operations and finances of the issuer, including disputed tax liabilities, prosecution under any enactment in respect of Schedule XIII to the Companies Act, 1956 (1 of 1956) etc.; (h) The information regarding pending litigations, defaults, non-payment of statutory dues, proceedings initiated for economic offences or civil offences (including the past cases, if found guilty), any disciplinary action taken by the Board or stock exchanges against the issuer or its directors shall be appropriately disclosed under this head and as risk factor(s); (i) The name(s) of the small scale undertaking(s) or any other creditors to whom the issuer owes a sum exceeding Rs. one lakh which is outstanding more than thirty days. (2) The information regarding outstanding litigations as specified sub-para (g) of para (1) of sub-i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirements) (Third Amendment) Regulations, 2016, w.e.f. 25.05.2016. 31 Substituted for "letter of offer" by SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2010, w.e.f. 13.04.2010. 32 Inserted by the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2010, w.e.f. 12.11.2010. 33 The words "and application form" omitted by SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2011 w.e.f. 01.11.2011. 34 Inserted by the SEBI (Issue of Capital and Disclosure Requirements) (Fifth Amendment) Regulations, 2015, w.e.f. 01.01.2016. 35 Substituted for "foreign institutional investors" by the SEBI (Foreign Portfolio Investors) Regulations, 2014, w.e.f. 7-1-2014. 36 Substituted by SEBI (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2011, w.e.f. 23.09.2011. Prior to its substitution, section (ii) read as under: "(ii) In case of other applicants: by despatch of refund orders by registered post, where the value is ₹ 1500/- or more, or under certificate of posting in other cases, (subject however to postal rules); and" 37 Substituted for "thirty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over Page: (A) Indicate that the issue is 100% Book Building Issue or Fixed Price Issue. (B) Indicate the total number of pages in the booklet. (C) Attention of investor should be invited to the following statement: "Please ensure that you read the Red Herring Prospectus (RHP), the General instructions contained in this Memorandum and the 'General Information Document (GID) for investing in Public Issues undertaken through the book building process' before applying in the Issue. Unless otherwise specified, all terms used in this form shall have the meaning ascribed to such terms in the RHP. The investors are advised to retain a copy of RHP/Abridged Prospectus for their future reference". (D) If the GID is not appended to the Abridged Prospectus, indicate where the GID would be available for perusal. (E) Logo of the issuer, name of the issuer, incorporation details including details of change in name (if any), Corporate Identity Number, registered office of the issuer along with telephone number, fax number, email address and website address. (F) Name, phone number, fax number, email address of Compliance Officer for any pre-issue or post-issue related problems. (G) All the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain list of designated branches of Self Certified Syndicate Banks. (FA) Details regarding website address(es)/link(s) from which the investor can obtain list of registrar to issue and share transfer agents, depository participants and stock brokers. (G) The name and website address of the Credit rating agencies. (H) The name and address of the trustee under debenture trust deed (in case of a debenture issue), along with telephone number, fax number, website address, name of contact person and email address. (I) Indicative dates of Bid/ Issue Closing, finalization of basis of allotment with stock exchanges, credit of equity shares to investors' demat accounts, initiation of refunds and commencement of trading in tabular format. (Attention of investor should be invited to disclaimers with regard to indicative table.) (III) Table/Index of Contents should be included in tabular format. (IV) Our History, Promoters and Management: (A) History of the issuer and the details of any demergers, mergers and acquisitions to be provided. (B) Promoters and their background to be provided. (1) Where promoter is individual a complete profile of the promoters, including their name, educati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subsidiaries/Joint Ventures: (1) Name of the group companies, Equity Capital, Turnover, Profit after tax, shareholding of issuer company and listing status to be given in tabular format for preceding financial year or the last period of audited financial statements included in offer document. This information is to be given for the five largest group companies based on turnover. However information regarding every such group company which has become a sick industrial company or is under winding up or has a negative net worth shall be given. (2) Total number of subsidiaries and joint ventures to be indicated. (3) Name of the Subsidiaries/Joint Ventures, Equity Capital, Turnover, Profit after tax, shareholding of issuer company and listing status to be given in tabular format for Subsidiaries/Joint Ventures which contribute more than 5% of revenue/profits/assets of the issuer company on a consolidated basis in the preceding financial year or the last period of audited financial statements included in offer document. (F) Details of Material Penal Actions/ Litigations. (G) Details of Material Related Party Transactions. (H) Details and reasons for non-deployment or delay in deplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risk factors should appear in bold and italics. All the risk factors should be highlighted. (C) Attention of investor should be invited to refer to RHP or to the General Information Document for Other Risks and General Risks. (VIII) Particulars of the Issue: (A) Objects of the issue. (B) Cost of the Project. (C) Means of financing. (D) Schedule of Deployment of Issue Proceeds. (E) Name of Appraising Agency, where applicable. (F) Name of Monitoring Agency (where applicable), if appointed by the issuer and the disclosure as to whether the appointment is pursuant to regulation 16 of these regulations. (IX) Basis of Issue Price: (A) Qualitative Factors for determining the basis of issue price for the issuer as included in offer document. (B) Quantitative Factors for determining the basis of issue price for the issuer as under: (1) Earnings per share and Diluted Earnings Per Share pre-issue (and the weight assigned) on consolidated basis (where applicable) in tabular form for the last three years (as adjusted for changes in capital). (2) Average return on net worth (and the weight assigned) on consolidated basis (where applicable) in tabular form for the last three years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Disclosure Requirements) (Third Amendment) Regulations, 2010, w.e.f. 13.04.2010. 44 Inserted by SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, w.e.f. 23.09.2011. 45 Substituted by the SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2015, w.e.f. 11.08.2015. Prior to its substitution, sub-item (J) read as under : "(J) Interim Use of Funds: Investment avenues in which the management proposes to deploy issue proceeds, pending its utilisation in the proposed project." 46 Inserted by the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2010, w.e.f. 12.11.2010. 47 The words "by Reserve Bank of India or other authorities" omitted by SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2016 w.e.f. 25.05.2016. 48 Inserted by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, w.e.f. 01.12.2015. 49 Substituted for "FIIs" by the SEBI (Foreign Portfolio Investors) Regulations, 2014, w.e.f. 7-1-2014. 50 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2012, w.e.f. 30.01.2012. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
