TMI BlogIssue of Indian Depository Receipts (IDRs).X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) its pre-issue paid-up capital and free reserves are at least US$ 50 million and it has a minimum average market capitalization (during the last three years) in its parent country of at least US$ 100 million; (b) it has been continuously trading on a stock exchange in its parent or home country (the country of incorporation of such company) for at least three immediately preceding years; (c) it has a track record of distributable profits in terms of section 123 of the Act, for at least three out of immediately preceding five years; (d) It fulfills such other eligibility criteria as may be laid down by the Securities and Exchange Board of India from time to time in this behalf. (3) The issuing company shall follow the following procedure for making an issue of IDRs: (a) the issuing company shall, where required, obtain the necessary approvals or exemptions from the appropriate authorities from the country of its incorporation under the relevant laws relating to issue of capital and IDRs. (b) issuing company shall obtain prior written approval from the Securities and Exchange Board of India on an application made in this behalf for issue of IDRs along with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board of India and the Registrar of Companies, New Delhi shall contain the particulars as prescribed in sub-rule (8) and shall be signed by all the whole-time directors of the issuing company, and the Chief Financial Officer. (h) the issuing company shall appoint an overseas custodian bank, a Domestic Depository and a Merchant Banker for the purpose of issue of IDRs. (i) the issuing company may appoint underwriters registered with the Securities and Exchange Board of India to underwrite the issue of IDRs. (j) the issuing company shall deliver the underlying equity shares or cause them to be delivered to an Overseas Custodian Bank and the said bank shall authorize the domestic depository to issue IDRs. (k) the issuing company shall obtain in-principle listing permission from one or more stock exchanges having nationwide trading terminals in India. Explanation- For the purposes of this rule,- (i) Domestic Depository means custodian of securities registered with the Securities and Exchange Board of India and authorized by the issuing company to issue IDRs. (ii) Merchant Banker means a Merchant Banker as defined in sub-regulation (cb) of regulation 2 of the Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application form can be issued without the memorandum as specified in clause (a), if it is issued in connection with an invitation to enter into an underwriting agreement with respect to the IDRs. (c) The prospectus for subscription of IDRs of the Issuing company which includes a statement purporting to be made by an expert shall not be circulated, issued or distributed in India or abroad unless a statement that the expert has given his written consent to the issue thereof and has not withdrawn such consent before the delivery of a copy of the prospectus to the Securities and Exchange Board of India and the Registrar of Companies, New Delhi, appears on the prospectus. (d) The provisions of the Act shall apply for all liabilities for mis-statements in prospectus or punishment for fraudulently inducing persons to invest money in IDRs. (e) The person(s) responsible for issue of the prospectus shall not incur any liability by reason of any non-compliance with or contravention of any provision of this rule, if- (i) as regards any matter not disclosed, he proves that he had no knowledge thereof; or (ii) the contravention arose in respect of such matters which in the opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oard of India in this regard. (f) On the receipt of dividend or other corporate action on the IDRs as specified in the agreements between the Issuing company and the Domestic Depository, the Domestic Depository shall distribute them to the IDR holders in proportion to their holdings of IDRs. (8) The prospectus or letter of offer shall, inter alia, contain the following particulars, namely:- (a) General information- (i) Name and address of the registered office of the company; (ii) name and address of the Domestic Depository, the Overseas Custodian Bank with the address of its office in India, the Merchant Banker, the underwriter to the issue and any other intermediary which may be appointed in connection with the issue of IDRs; (iii) names and addresses of Stock Exchanges where applications are made or proposed to be made for listing of the IDRs; (iv) the provisions relating to punishment for fictitious applications; (v) statement or declaration for refund of excess subscription; (vi) declaration about issue of allotment letters or certificates or IDRs within the stipulated period; (vii) date of opening of issue; (viii) date of closing of issue; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mestic Depository and all other intermediaries associated with the issue of IDRs. (xii) the information, as may be specified by the Securities and Exchange Board of India, in respect of listing, trading record or history of the Issuing company on all the stock exchanges, whether situated in its parent country or elsewhere. (f) Report- (i) Where the law of a country, in which the Issuing company is incorporated, requires annual statutory audit of the accounts of the Issuing company, a report by the statutory auditor of the Issuing company, in such form as may be specified by the Securities and Exchange Board of India on - (A) the audited financial statements of the Issuing company in respect of three financial years immediately preceding the date of prospectus; (B) the interim audited financial statements in respect of the period ending on a date which is less than 180 days prior to the date of opening of the issue, if the gap between the ending date of the latest audited financial statements disclosed under clause (A) and the date of the opening of the issue is more than 180 days: Provided that if the gap between such date of latest audited financial statements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of opening of issue and date of reports specified under sub-clauses (i) and (ii) shall not exceed one hundred and twenty days; (iv) If the proceeds of the IDR issue are used for investing in other body(ies) corporate, then following details of such body(ies) corporate shall be given- (A) the Name and address(es) of the bodies corporate; (B) the reports stated in sub-clauses (i) and (ii), as the case may be, in respect of such body (ies) corporate also. (g) Other Information- (i) the Minimum subscription for the issue; (ii) the fees and expenses payable to the intermediaries involved in the issue of IDRs; (iii) the declaration with regard to compliance with the Foreign Exchange Management Act, 1999. (h) Inspection of Documents- The Place at which inspection of the offer documents, the financial statements and auditor's report thereof shall be allowed during the normal business hours; and (i) any other information as specified by the Securities and Exchange Board of India or the Income-tax Authorities or the Reserve Bank of India or other regulatory authorities from time to time. - - statute, statutory provisions legislation, law, enac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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