ICDR Regualtion 2009

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;

Shareholders’ or Investors’ Grievance Committee at frequent intervals, appropriate

delegation of power by the board of directors of the issuer as regards share transfer and

clearly laid down systems and procedures for timely and satisfactory redressal of investor

grievances.

(2) If the listed issuer does not satisfy the conditions specified in clause (1), it shall make

disclosures in the letter of offer:

(a) as specified in Part A, except for disclosures as specified in clause (4);

(b) as specified in items (XVI)(B)(4), (5) and (6) in clause (5) of this Part.

(3) Irrespective of whether the conditions specified in clause (1) are satisfied or not, the following

listed issuers shall make disclosures in the letter of offer as specified in Part A, except for

disclosures as specified in clause (4):

(a) a listed issuer whose management has undergone change pursuant to acquisition of control

in accordance with the provisions of Securities and Exchange Board of India (Substantial

Acquisition of Shares and Takeovers) Regulations, 1997 and is making a rights issue of

specified securities for the first time subsequent to such change;

(b) an issuer whose specified securities have been listed consequent to relaxation granted by

the Board under sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules,

1957 for listing of its specified securities pursuant to a scheme sanctioned by a High Court

under sections 391 to 394 of the Companies Act, 1956 and is making a rights issue of

specified securities for the first time subsequent to such listing.

(4) In respect of an issuer making disclosures in terms of clauses (2) and (3) above, the disclosures

specified in the following items in Part (A) shall not be applicable:

(a) Sub-item (C) of item (V);

(b) Sub-para (b) of para (2) of sub-item (B) of item (XII);

(d) Sub-para (b) of para (3) of sub-item (B) of item (XII);

(e) Sub-para (c) of para (3) of sub-item (B) of item (XII);

(f) Para (18) of sub-item (B) of item (XII);

(g) Para (19) of sub-item (B) of item (XII).

(5) A listed issuer referred to in clause (1) shall make the following disclosures in the letter of

offer, as far as possible, in the order in which the disclosures are specified in this clause:

(I) Cover Pages: The cover page paper shall be of adequate thickness (preferably

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 email

address.

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 approved by Securities and Exchange

Board of India (SEBI) nor does SEBI guarantee the accuracy or

adequacy of this document."

Specific attention of investors shall be invited to the statement of “Risk

factors” given on page number(s) ….. under the section “General

Risks”.

(e) The following clause on ‘Issuer’s Absolute Responsibility’ shall be

incorporated in a box format:

"The issuer, having made all reasonable inquiries, accepts

responsibility for and confirms that this letter of offer contains all

information with regard to the issuer and the issue, which is material in

the context of the issue, that the information contained in the letter of

offer is true and correct in all material aspects and is not misleading in

any material respect, that the opinions and intentions expressed herein

are honestly held and that there are no other facts, the omission of

which make this document as a whole or any of such information or the

expression of any such opinions or intentions misleading in any

material respect."

(f) The names, logos and addresses of all the lead merchant bankers with

their titles who have signed the due diligence certificate and filed the

letter of offer with the Board, along with their telephone numbers, fax

numbers, website addresses and e-mail addresses.

(g) The name, logo and address of the registrar to the issue, along with its

telephone number, fax number, website address and e-mail address.

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(h) Issue schedule:

(i) Date of opening of the issue.

(ii) Date of closing of the issue.

(iii) Last date for request for split.

(i) The names of the recognised stock exchanges where the specified

securities of the issuer are listed and the details of in-principle approval

for listing of the specified securities proposed to be offered in the rights

issue.

(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.

(D) Abbreviations.

(IV) Risk Factors:

(A) The risk factors shall be printed in clear readable font (preferably of minimum

point ten size).

(B) The risk factors shall be in relation to the following:

(1) the issue and objects of the issue;

(2) the issuer and its ongoing business activities;

(3) the material litigations which impact the business of the issuer.

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 impact are stated, the financial and other

implications of the same shall be disclosed. If it cannot be quantified, a distinct

statement about the fact that the implications cannot be quantified shall be made.

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(V) Prominent notes: This section shall contain notes which are required to be given

prominence and shall also include the following:

(A) The net worth before the issue (as per latest audited financial statement disclosed

in the letter of offer) and issue size.

(B) The details of transactions by the issuer with group or subsidiary companies

during one year 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 draft letter of offer with the Board, the nature of transactions

and the cumulative value of transactions.

directors of the company which is a promoter of the issuer, the directors of the

issuer and their relatives have financed the purchase by any other person of

securities of the issuer other than in the normal course of the business of the

financing entity during the period of six months 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 draft letter of offer with the

Board.

(VI) Introduction:

(A) Summary:

(1) Issue details in brief.

(2) Summary consolidated financial, operating and other data.

(B) General Information:

(1) The name and address of the registered office and the registration number of

the issuer, along with the address of the Registrar of Companies where the

issuer is registered.

(2) The names, addresses, telephone numbers, fax numbers and e-mail

addresses of the Company Secretary and compliance officer of the issuer.

(3) The names, addresses, telephone numbers, fax numbers, contact person,

website addresses and e-mail addresses of the bankers to the issue, Self

Certified Syndicate Bankers and legal advisors to the issue.

(4) The statement of inter-se allocation of responsibilities among lead merchant

bankers, where more than one merchant banker is associated with the issue.

(5) The following details of credit rating, in case of a rights issue of convertible

debt instruments:

(a) The details of all the credit ratings 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:

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(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.

(d) The details of final underwriting arrangement in the letter of offer filed

with the designated stock exchange, indicating actual number of specified

securities underwritten.

(10) The principal terms of loan and assets charged as security.

(1) The authorised, issued and subscribed capital after suitable incorporation of

the outstanding convertible securities (number of securities, descripttion and

aggregate nominal value).

(2) Paid-up capital.

(3) The following details of outstanding instruments:

(a) Details of options, if any.

(b) Details of convertible securities, if any.

(4) The details of specified securities held by promoter and promoter group

including the details of lock-in, pledge of and encumbrance on such

specified securities.

(5) The details of shares acquired by promoters and promoter group in the last

one year 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 draft letter of offer with the Board.

(6) The intention and extent of participation by promoters and promoter group

in the issue with respect to:

(a) their rights entitlement.

(b) the unsubscribed portion over and above their rights entitlement.

(7) The shareholding pattern as per the latest filing with the recognised stock

exchange(s).

(8) The details of the shareholders holding more than one per cent. of the share

capital of the issuer.

(VII) Particulars of the Issue

(A) Objects of the Issue:

(1) The objects of the issue shall be disclosed.

(2) If one of the objects is investment in a joint venture or subsidiary or an

acquisition, the following additional disclosures shall be made:

(a) The details of the form of investment, i.e., equity, debt or any other

instrument

(b) If the form of investment has not been decided, a statement to that

effect;

rate of interest, nature of security, terms of repayment, subordination,

etc.

(d) If the investment is in equity, whether any dividends are assured;

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(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.

assessment of working capital after implementation of the project or

achievement of objects of the issue, as the case may be, capacity

utilisation assumptions, break-up of expected current assets into raw

materials, finished goods, work in progress, sundry debtors etc., along

with the assumption about the holding norms for each type of current

asset, total current liabilities, net current assets and envisaged sources

of finance for net current assets, i.e., bank finance, institutional finance,

own funds, etc.

(d) The 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-àvis

the projected working capital position based on which the money is

proposed to be raised in the public issue.

(f) Details of the existing working capital available with the issuer, along

with a break-up of 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 as part of the project for which issue is

being made, the reasons therefor.

(B) Requirement of Funds:

(2) The requirement for funds proposed to be raised through the issue.

(3) Where the issuer proposes to undertake more than one activity or project,

such as diversification, modernisation, expansion, etc., the total project cost

shall be given activity-wise or project wise, as the case may be.

(4) Where the issuer is implementing the project in a phased manner, the cost of

each phase including the phase, if any, which has already been

implemented, shall be separately given.

(5) The details of all material existing or anticipated transactions in relation to

the utlisation of the issue proceeds or project cost with promoters, directors,

key management personnel, associates and group companies. The relevant

documents shall be included in the list of material documents for inspection.

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(6) If object of the issue is to fund a project, the following details shall be

given:

(a) location of the project

(b) plant and machinery, technology, process, etc.

by the collaborators.

(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

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 by the issuer of shares in any other body

corporate; and

(b) by reason of that acquisition or anything to be done in consequence

thereof or in connection therewith, that body corporate will become a

subsidiary of the issuer;

a report made by accountants (who shall be named in the letter of offer)

upon:

(i) the profits or losses of the other body corporate for each of the five

financial years immediately preceding the issue of the Letter of Offer;

and

(ii) the assets and liabilities of the other body corporate at the last date to

which its accounts were made up.

(9) Strategic partners, if applicable, to the project or objects of the issue.

(10) Financial partners, if applicable to the project or objects of the issue.

(D) Funding Plan (Means of Finance):

(1) An undertaking shall be given in the letter of offer by the issuer confirming

that firm arrangements of finance through verifiable means towards seventy

five per cent. of the stated means of finance, excluding the amount to be

raised through proposed issue and existing identifiable internal accruals,

have been made.

(2) The balance portion of the means of finance for which no firm arrangement

has been made shall be mentioned without specification.

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(3) The details of funds tied up and the avenues for deployment of excess

proceeds, if any.

(E) Appraisal:

(1) The scope and purpose of the appraisal, if any, along with the date of

appraisal.

(2) The cost of the project and means of finance as per the appraisal report.

(3) Explanation regarding revision, if any, in the project cost and the means of

finance after the date of issue of the appraisal report.

(4) The weaknesses and threats, if any, given in the appraisal report, by way of

risk factors.

(F) Schedule of Implementation: The schedule of implementation of the project in a

tabular form and the progress made so far, giving details of land acquisition, civil

works, installation of plant and machinery, trial production, date of commercial

production and reasons for delay, if any.

(G) 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 filing the letter of offer with the

designated stock exchange, as certified by a Chartered Accountant, along

with the name of the chartered accountant 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) Interim Use of Funds: Investment avenues in which the management proposes

to deploy issue proceeds, pending its utilisation in the proposed project.

(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 Structure about the Issuer: In case the issuer has not come

out with any issue in the past ten years or more, a brief statement about the history and

corporate structure of the issuer, main objects of the issuer and major events in the

past.

(IX) Management (Board of Directors):

(A) Name, age, qualifications, Director Identification Number, experience, address,

occupation and date of expiration of the current term of office of manager,

managing director, and other directors (including nominee directors, whole-time

directors), giving their directorships in other companies.

(B) The nature of any family relationship between any of the directors.

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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.

(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 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.

(B) In addition, in accordance with Ministry of Finance Circular no.F.2/5/SE/76

dated February 05, 1977 and amended further on March 08, 1977, 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 letter of offer shall be furnished.

(2) Working results of the issuer under following heads:

(a) (i) Sales / turnover

(ii) Other income

(b) Estimated gross profit / loss (excluding depreciation and taxes)

(ii) Provision for taxes

(d) Estimated net profit / loss

(3) Material changes and commitments, if any affecting financial position of the

issuer.

(4) Week-end prices for the last four weeks; current market price; and highest

and lowest prices of equity shares during the period with the relative dates

low price in each of the last three years and monthly high/low price during the

last six months).

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(D) Accounting and other ratios: The following accounting ratios shall be given for

each of the accounting periods for which financial information is given:

(5) Earnings per share: This ratio shall be calculated after excluding extra

ordinary items.

(6) Return on Networth: This ratio shall be calculated excluding revaluation

reserves.

(7) Net Asset Value per share: This ratio shall be calculated excluding

revaluation reserves.

(8) Accounting and other ratios shall be based on the financial statements

prepared on the basis of Indian Accounting Standards.

(E) Capitalisation Statement:

(4) A Capitalisation Statement showing total debt, net worth, and the debt/

equity ratios before and after the issue is made shall be incorporated.

(5) In case of any change in the share capital since the date as of which the

financial information has been disclosed in the prospectus, a note explaining

the nature of the change shall be given.

(6) An 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 Rs.3000 lacs to Rs.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 involving:

(1) Issues of moral turpitude or criminal liability on the part of the issuer

(2) Material violations of statutory regulations by the issuer

(3) Economic offences where proceedings have been initiated against the issuer.

be applied:

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(1) For the outstanding litigations which may not have any impact on the future

revenues, the disclosure is required:

(a) Where the aggregate amount involved in such individual litigation

exceeds one per cent. of the net worth of the issuer as per last

completed financial year; or

(b) Where the decision in one case is likely to affect the decision in similar

cases, even though the amount involved in single case individually may

not exceed one per cent. of the net worth of the issuer as per the last

completed financial year.

(2) For the outstanding litigations which may have any impact on the future

revenues, the disclosure is required:

(a) Where the aggregate amount involved in such individual litigation is

likely to exceed one per cent. of the total revenue of the issuer as per

last completed financial year; or

(b) Where the decision in one case is likely to affect the decision in similar

cases, even though the amount involved in single case individually may

not exceed one per cent. of the total revenue of the issuer, if similar

cases put together collectively exceed one per cent. of total revenue of

the issuer as per last completed financial year.

(D) These disclosures shall be made in respect of the issuer and the subsidiary

companies of the issuer whose financial statements are included in the offer

document, either separately or in consolidated form.

(XIII) Government Approvals or Licensing Arrangements: In case of a new line of

activity/project, all pending government and regulatory approvals; In case of an

existing line of activity/project, al pending regulatory and government approvals and

pending renewals of licences.

(XIV) Material Development: Any material development after the date of the latest balance

sheet and its impact on performance and prospects of the issuer.

(XV) Other Regulatory and Statutory Disclosures:

(A) Authority for the issue and details of resolution passed for the issue.

(B) A statement by the issuer that the issuer, promoters, promoter group, directors or

person(s) in control of the promoter have 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.

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 by Reserve Bank of India or other authorities.

(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:

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(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 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 Letter of Offer. Lead merchant banker, …… has

certified that the disclosures made in the Letter of Offer are generally

adequate and are in conformity with SEBI (Issue of Capital and Disclosure

Requirements) Regulations, 2009 in force for the time being. This

requirement is to facilitate investors to take an informed decision for making

investment in the proposed issue.

It should also be clearly understood that while the issuer is primarily

responsible for the correctness, adequacy and disclosure of all relevant

information in the letter of offer, the lead merchant banker is expected to

exercise due diligence to ensure that the issuer discharges its responsibility

adequately in this behalf and towards this purpose, the lead merchant banker

……. has furnished to the Securities and Exchange Board of India (SEBI) a

due diligence certificate dated …….which reads as follows:

(due diligence certificate submitted to the Board to be reproduced here)

The filing of the letter of offer does not, however, absolve the issuer from

any liabilities under section 63 or section 68 of the Companies Act, 1956 or

from the requirement of obtaining such statutory or other clearances as may

be required for the purpose of the proposed issue. SEBI further reserves the

right to take up, at any point of time, with the lead merchant banker any

irregularities or lapses in letter of offer."

(2) Disclaimer Statement from the issuer and lead merchant banker:

A statement to the effect that the issuer and the lead merchant banker accept

no responsibility for statements made otherwise than in the Letter of Offer

or in the advertisement or any other material issued by or at the instance of

the issuer and that anyone placing reliance on any other source of

information would be doing so at his own risk.

Investors who invest in the issue will be deemed to have been represented

by the issuer and lead manager and their respective directors, officers,

agents, affiliates and representatives that they are eligible under all

applicable laws, rules, regulations, guidelines and approvals to acquire

equity shares of our company, and are relying on independent advice /

evaluation as to their ability and quantum of investment 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

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(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 for allotment and issue of

certificates, credit of specified securities to the investors’ demat account.

(B) How to apply, availability of application forms and letter of offer and mode of

payment, including the following:

(1) Applications by mutual funds:

(a) The necessary disclosures under the heads "Procedure for applications

by mutual funds" and "Multiple Applications" shall be incorporated to

indicate that a separate application can be made in respect of each

scheme of an Indian mutual fund registered with the Board and that

such applications shall not be treated as multiple applications.

(b) A disclosure that the applications made by asset management

companies or custodians of a mutual fund shall clearly indicate the

name of the concerned scheme for which application is being made.

(2) Applications by non-resident Indians: The following disclosures shall be

made:

(a) the name and address of at least one place in India from where

individual non-resident Indian applicants can obtain the application

forms.

(b) A statement that: "non-resident Indian applicants may please note that

only such applications as are accompanied by payment in free foreign

exchange shall be considered for allotment under the reserved category.

The non-resident Indians who intend to make payment through Non-

Resident Ordinary (NRO) accounts shall use the form meant for

Resident Indians and shall not use the forms meant for reserved

category."

(3) Application by ASBA investors: Disclosures regarding eligible ASBA

investors and ASBA process including specific instructions for submitting

Application Supported by Blocked Amount.

(4) A statement that the shareholders who have not received the application

form may, along with the requisite application money, apply in writing on a

plain paper.

147

(5) The format to enable the shareholders to make the application on plain

paper specifying therein necessary particulars such as name, address, ratio

of rights issue, issue price, number of equity shares held, ledger folio

numbers, depository participant ID, client ID, number of equity shares

entitled and applied for, additional shares if any, amount to be paid along

with application, and particulars of cheque, etc. to be drawn in favour of the

issuer’s account;

(6) A statement that the shareholders making the application otherwise than on

the application form shall not renounce their rights and shall not utilise the

application form for any purpose including renunciation even if it is

received subsequently.

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

oversubscripttion.

(2) 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.

(3) The permissible modes of making refunds are as follows:

(a) 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;

(b) In case of other applicants: by despatch of refund orders by registered

post, where the value is Rs 1500/- or more, or under certificate of

posting in other cases, (subject however to postal rules); and

of refunds to the applicants in any other electronic manner permissible

under the banking laws for the time being in force which is permitted

by the Board from time to time.

(XVII) Undertakings by the issuer in connection with the issue: The issuer shall undertake

that:

(A) the complaints received in respect of the Issue shall be attended to by the issuer

expeditiously and satisfactorily.

148

(B) that steps for completion of the necessary formalities for listing and

commencement of trading at all stock exchanges where the specified securities

are to be listed are taken within seven working days of finalisation of basis of

allotment.

disclosed shall be made available to the Registrar to the issue by the issuer.

(D) that where refunds are made through electronic transfer of funds, a suitable

communication shall be sent to the applicant within 15 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.

(E) that adequate arrangements shall be made to collect all ASBA applications and to

consider them similar to non-ASBA applications while finalizing the basis of

allotment.

(F) In case of convertible debt instruments, the issuer shall additionally undertake

that:

(1) the issuer shall forward the details of utilisation of the funds raised through

the convertible debt instruments duly certified by the statutory auditors of

the issuer, to the debenture 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 or specified securities to public shall be

transferred to separate bank account.

(B) details of all monies utilised out of the issue referred to in clause (A) shall be

disclosed under an appropriate separate head in the balance sheet of the issuer

indicating the purpose for which such monies had been utilised; and

clause (A) 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.

(XIX) Restrictions on foreign ownership of Indian securities, if any:

(A) Investment by NRIs.

(B) Investment by FIIs.

149

(XX) Statement regarding minimum subscripttion clause: The following statement shall

appear in the letter of offer:

(A) "If the issuer does not receive the minimum subscripttion of ninety per cent. of the

issue (including devolvement of underwriters where applicable), the entire

subscripttion shall be refunded to the applicants within fifteen days from the date

of closure of the issue."

(B) "If there is delay in the refund of subscripttion by more than 8 days after the issuer

becomes liable to pay the subscripttion amount (i.e. fifteen days after closure of the

issue), the issuer will pay interest for the delayed period, at rates prescribed under

sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956."

(XXI) Statutory and other information:

(A) Option to subscribe in the issue:

(1) The details of option, if any, to receive the specified securities subscribed

for either in demateralised form or physical form.

(2) The lead merchant banker shall incorporate a statement in the offer

document and in the application form to the effect that the investor shall

have an option either to receive the security certificates or to hold the

securities in dematerialised form with a depository.

(B) Material contracts and time and place of inspection which shall include copies of

the Annual Reports of the issuer for the last five years.

(XXII) Any other material disclosures, as deemed necessary.

(XXIII)Declaration:

(A) The draft letter of offer (in case of issues other than fast track issues) and letter of

offer shall be approved by the Board of Directors of the issuer and shall be signed

by all directors, the Chief Executive 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.”

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.

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Bhawna Upadhyay

Faisal Khan

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