08 October 2013
Any allotment of securities shall be completed within sixty days from the receipt of application money and in case the company is not able to allot the securities within the period of sixty days, it shall repay the application money within fifteen days thereafter, failing which it will be required to be re-paid with interest at the rate of 12% p.a. provided that the monies received on such application shall be kept in a separate bank account and shall not be utilized for any purpose other than— (i) for adjustment against allotment of securities; or (ii) for the repayment of monies where the company is unable to allot securities.
No company offering securities shall release any public advertisements or utilize any media, marketing or distribution channels or agents to inform the public at large about such an offer.
In view of this, share application money pending allotment should be treated as current liability in books of accounts and should be disclosed as a current liability and not as a part of share capital.
FMV of Shares should be calculated considering the excess amount so received as CL.
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