Offer/invitation to select group

(other than Public offier)Issue of Private placement

offer LetterSatisfies other conditons of

sec 42

Public Offer- Offer/ invitation to more than 200 personswhether or not payment

received (Exp 1)

Private Placement to include-•Issue of Debentures-conv or non conv•Issue of Rights Shares•Issue of ESOP•Preferential Issue by Unlisted and listed Companies (both Private & Public)

PREISSUE

PRE ISSUE COMLIANCES FOR PRIVATE PLACEMENT

STEP 1 Identification & Recording of Names of ProspectiveSubscribers

NO TIME LIMIT

STEP 2 Issue of PRIVATE PLACEMENT OFFER LETTER (PPOL)

Within 30 days of recording of Name and validity period to be mentioned.

STEP 3 Filing of Record with ROCKept at Step 1 &2

Within 30 days of Date (issue) of PPOL.

ISSUE STEP 4 Receipt of Securities Application Money(SAM)

Within validity period of PPOL

POST ISSUE

STEP 5 Allotment of Securities Within 60 days of receipt of SAM

STEP 6 Return of Allotment Within 30 days of Allotment

For each of the offer a special resolution bythe shareholders must be passed.

Basis or justification of price includingpremium shall be disclosed in explanatorystatement

In case of NCD previous special resolutionis sufficient passed once in a year.

Offer(s) of security restricted to persons not exceeding200 in a financial year 42(2)& [Rule 14(2)(b)] (excludingQIBs and ESOP).Restriction of 200 separately for each of the security i.e.Equity/Preference or Debentures

Company shall not [S. 42(8)]-Release public advertisement-Utilize any media-Marketing-Distribution channels-Agents to inform public.

Value of offer per person shall not be less than Rs20,000 of face value of the securities.

No fresh offer until unless allotment to any previous offer completed orwithdrawn or abandoned by the company.[S.42(3)

Company SHALL ONLY invite to subscribe securities through PrivatePlacement Offer Letter (PPOL) - Form PAS-4Offers to be made to the persons whose names are recorded prior to theinvitation.[S. 42(7)]

Offer letter shall be accompanied by-An application form-Serially numbered-Addressed specifically to the person-Validity Period to be mentioned (Date of Opening/Closing) –PAS-4-Sent either in writing or in electronic mode-with in 30 days of recording his name. rule 14(1)(b)

Complete Record of offers shall be maintained in Form PAS-5

Company to maintain record of the subscriberto whom invitation sentcomplete information shall be filed with theregistrar within 30 days of circulation.The date of offer letter shall deemed to be thedate of circulations.In case of listed company:

-Copy of Record-Form PAS-4, PAS-5

- filed SEBI also within in 30days.

Payment towards subscription shall be paid through- cheque, demand draft or other Banking Channels but-not by cash.

Payment from subscribers bank account only Company to keep record of such bank accounts [Rule

14(2)(d)] In case of joint holders 1st joint holder must subscribe

through his Bank Account.Money to be kept in a separate scheduled bank accountMoney to be utilized only –

(a) for adjustment against allotment of securities; or(b) for repayment of monies in case no allotment is made

Money to be received within the Validity Period of PPOLNo person other than the person specified in the application

shall be allowed to apply or invest.

Allotment shall be completed with in 60 daysof receipt of application money allotment.Failure to allot will make the Company torepay the application money within 15 days.Failure to repay application money withinaforesaid 15 days will invite interest @12 % p.afrom 60th day. [S.42(6)]

Return of allotment shall be filed with theROC with in 30 days of allotment in Form PAS-3with following information/docs -[S. 42(9)]

Complete list of security holders Their full name, PAN, Email id andaddressesClass and number of securities allottedDate of allotment of securityNumber of Securities, Nominal value &amount receivedDetails of consideration if issued otherthan cash

If company -makes offer or-accept monies in contravention of this section

COMPANY, PROMOTERS AND DIRECTORSshall be liable for a penalty which may extend to

- amount involved in the offer or-2 crore rupeeswhich ever is HIGHER

&company shall refund all monies within a periodof 30 days of the order imposing penalty.

DATES Maximum days

Tasks Assumptions/ Actions

1.4.2014 to 30.4.2014

30 Identification & Recording of Prospective subscriber

1st subscriber recorded on 1.4.2014

1.5.2014 30 Issue of Private placement Offer Letter (PPOL) with date of issue15.5.2014 to 30.5.2014

To be issued on 1.5.2014 as 1st name recorded on 1.4.2014

30.5.2014 Record to be filed with ROC15.5.2014to 30.5.2014

15 Receipt of application money Ist application money received on 20.5.2014

20.7.2014 60 Allotment of Shares 60 days to be counted from 20.4.2014

19.7.2014 30 Return of Allotment Max 30 days from allotment of shares

Offer to be made to the Equity share holders in proportion to the shares already held. [S. 62(1)(a)]

By issue of offer letter. Issue of notice specifying- No. of shares [S.62(1)(a)(i)]

-Minimum 15 days -Maximum time 30 days Notice to be sent only by-

-registered post/speed post or electronic mode Notice - minimum 3 days before opening of the issue Offer not accepted within specified time - Deemed

rejection.

Rights Issue Conditions Contd……….

Right to renounce shares unless articles specifically provides.

Specific mention of right to renounce in letter of offer.

In case of specific decline or deemed rejection after 30 days- board may allot or offer to any other person which is NOT DIS-ADVANTAGEOUS

(B) Offer to Employees under ESOP [S.62(1)(b)]Subject to:

-special resolution and -conditions prescribed under rules.

Preferential Issue Means- Issue of Shares or other Securities to other Select person or group of person including existing shareholders and employees.

Shares or other Securities Includes-- Equity Shares- Convertible Securities into equity whether optional or compulsory

Does not include –-Securities offered by public issue-Right issue -Employee stock option scheme -Sweat equity share -Bonus share-Depository receipt-Foreign security- Non Convertible Debentures

- Redeemable Preference Shares

No applicability of sec. 62 on convertible debentures/loans-provided special resolution was passed at the time of offer of option.[S.62(1)(3)]

Conditions for Preferential Allotment Unlisted Companies -

Prior price determination by the valuation report of registered valuer. Justification must be given along with valuation report.

In case of convertible security whether optionally or otherwise the price has to be determined on the basis of valuation report by the registered valuer.

listed company- Preferential Issue as per SEBI regulation and shares not to be valued by the registered valuer

In case of unlisted company following conditions to be fulfilled:-Authorized by AOA-Special resolution valid for 1 year-Fully paid up shares at the time of allotment

Disclosures to be made in Explanatory statement-Object of the issue -Total No. of securities to be issued-Price or Price band -Basis of price and copy of valuation report-Relevant date -Date of valuation-Class or class of person-Intention of directors, promoters or KMP-time limit fro the completion of offer-Names of the proposed allottees-If any change in control it must be mentioned.-No. of allotments on preferential basis already madeby the company and its price.

-In case of price received other than cash-Justification must be given along with valuation report.

Sr. No. Category Pre Issue Post Issue

No. of shares held % of share holding No. of shares held % of share holding

A Promoters’ holding

1 Indian :

Individual

Bodies Corporate

Sub total

2 Foreign promoters

Sub Total (A)

B Non Promoters’ holding

1 Institutional Investors

2 Non institution :

Private Corporate BodiesDirector and reletives

Indian public

Others (Including NRIs)

Sub Total (B)

GRAND TOTAL

Dinesh GuptaPracticing Company SecretaryJalandhar