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TMI BlogAmendments to the SEBI (Disclosure and Investor Protection) Guidelines, 2000- amendment to Chapter VIA concerning general and disclosure requirements pertaining to IDR issuesX X X X Extracts X X X X X X X X Extracts X X X X ..... to as the "DIP Guidelines"). Further, it is felt that there is a need to explicitly mention the extent of applicability of the provisions of the DIP Guidelines to the IDR issuances. 2. The amendments in the DIP Guidelines mainly relate to the disclosure of financial information pertaining to the issuing company and the extent of applicability of the DIP Guidelines to IDR issues. 3. The procedures for Rights issue of IDRs will be prescribed in due course. 4. The amendments mentioned in Annexure I shall come into effect immediately. 5. All registered merchant bankers are directed to ensure compliance with the amendments made vide this circular. 6. This circular is being issued in exercise of the powers conferred under sub-section (1) of Section 11 of the Securities and Exchange Board of India Act, 1992. 7. This circular and the entire text of the DIP Guidelines, including the amendments issued vide this circular, are available on SEBI website at www.sebi.gov.in under the categories "Legal Framework" and "Issues and Listing". Yours faithfully, Parag Basu Encl.: As above. ANNEXURE I AMENDMENTS TO THE SEBI (DIP) GUIDELINES, 2000 CHAPTER VIA ISSUE OF INDIAN DEPOSITORY RECEIP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lead merchant banker shall furnish to the Board a due diligence certificate along with the draft publicly filed offer document. In addition to the due diligence certificate furnished along with the draft offer document, the lead merchant banker shall also: (i) certify that all amendments suggestion or observations made by the Board have been incorporated in the offer document; (ii) furnish a fresh "due diligence" certificate at the time of filing the prospectus with the Registrar of Companies; (iii) furnish a certificate immediately before the opening of the issue that no corrective action on its part is needed; (iv) furnish a certificate after the issue has opened but before it closes for subscription. The due diligence certificates shall be in the format specified in Schedule -VI B. The lead merchant banker who is responsible for conducting due diligence exercise with respect to contents of the offer document, as per inter-se allocation of responsibilities, shall sign the due diligence certificate. 8. The issuing company shall soon after receiving final observations, if any, on the draft publicly filed prospectus or draft publicly filed Red Herring Prospectus fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fessional accountant or certified public accountant or equivalent (by whatever name called in the home country in accordance with the International Standards on Auditing (ISA)). 6A.20.2. Where the law of the home country requires annual statutory audit of the accounts of the issuing company, a report of the statutory auditor on the audited financial statements of the issuing company for each of the three financial years immediately preceding the date of the prospectus including the profits or losses, assets, liabilities and cash-flow statement of the issuing company at the last date to which the accounts of the issuing company were made in the specified form: Provided the gap between date of opening of issue and date of report shall not exceed 120 days. 6A.20.2.1. The report prepared by the statutory auditors of the issuing company should disclose financial statements (as per relevant period in the annual report) in Indian Rupees (at the closing rate of exchange, as at the date on which the financial information is presented), compiled in a tabular form and include the consolidated or unconsolidated income statement, consolidated or unconsolidated cash flow statements, consolida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts of the issuing company were made in the specified form: Provided that the gap between date of opening of issue and date of report shall not exceed 120 days. 6A.20.3.1. The report prepared by the Chartered Accountants should disclose financial statements in Indian Rupees (at the closing rate of exchange, as at the date on which the financial information is presented), compiled in a tabular form and include the consolidated or unconsolidated income statement, consolidated or unconsolidated cash flow statements, consolidated or unconsolidated balance sheet and the capitalisation statement required under clause 6A.18. 6A.20.3.2. The interim 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 have to be included in report, if the gap between the ending date of the latest financial statements disclosed above 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 and the date of opening of issue is 180 days or less, the requirement above shall be deemed to be complied with if disclosures in respect of materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or published in any media in India; (c). Clause 9.1.14B: Entirely applicable; (d). Clause 9.1.15: Applicability is restricted to any product advertisement of an issuing company issued or published in any media in India; (e). Clause 9.1.16 to 9.1.19: Entirely applicable; (f). Clause 9.2 (a) and (b): Applicability is restricted to any material or information released in India and any issue advertisements and publicity materials issued or published in any media in India; (g). Clause 9.2A: Not applicable; (h). Clause 9.3.1 (i), (ii) and (iii): Entirely applicable; (i). Clause 9.3.1 (iv): Applicability is restricted to any research report circulated in India; (x). Chapters X, XIA, XIIA, XIII, XIIIA, XIV, & XV are not applicable (xi). Chapter XI: All clauses in the Chapter are applicable except Clause 11.1(A), 11.2, 11.3 (b), 11.3.1 (ii) to (iii),11.3.1 (viii), 11.3.5 (i), (ii), (ii-b), (iii) and (xxiii) and 11.4. (xii). Chapter XVI: All clauses in the Chapter are applicable except Clause 16.1.1, and 16.2.3.1 (b). (xiii). Chapter XVII: All clauses in the Chapter are applicable. 2. The extent of applicability of Schedules of SEBI (DIP) Guidelines, 2000 to the IDR issue is ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issuing company fails to refund the entire subscription amount within 15 days from the date of the closure of the issue, it is liable to pay interest to the subscribers at the rate of 15 per cent per annum for the period of the delay." (b) Following statement shall appear for underwritten IDR issues: "If the issuing company does not receive the minimum subscription of 90 per cent of the net offer to public including devolvement of Underwriters within 60 days from the date of closure of the issue, the issuing company shall forthwith refund the entire subscription amount received with interest to the subscribers at the rate of 15 per cent per annum for the period of the delay beyond 60 days" ' (II). After Schedule VI-A, following Schedule shall be inserted, namely-: "SCHEDULE VI-B Clause 6A.6 (7) FORMAT OF THE DUE DILIGENCE CERTIFICATE TO BE FILED BY THE LEAD MANAGER(S) FOR IDR ISSUES To, SECURITIES AND EXCHANGE BOARD OF INDIA Dear Sirs, SUB.: ISSUE OF ____________________ (hereinafter referred to as 'IDRs') BY _______________(hereinafter referred to as the 'Issuing Company') We, the undernoted, have been appointed as the Merchant Banker (hereinafter referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /RHP/Prospectus, except [ ], are registered with the Board and that till date such registration is valid. 6. We have satisfied ourselves about the worth of the underwriters to fulfil their underwriting commitments. 7. We certify that the proposed activities of the Issuing Company for which the funds are being raised in the present issue fall within the 'main objects' listed in the object clause of the Memorandum of Association or other charter of the Issuing Company and that the activities which have been carried out until now are valid in terms of the object clause of its Memorandum of Association. 8. We confirm that necessary arrangements have been made to ensure that the moneys received pursuant to the issue are kept in a separate bank account and that such moneys shall be released by the said bank only, after permission, for listing of IDRs, is obtained from all the stock exchanges mentioned in the prospectus. We further confirm that the agreement entered into between the bankers to the issue and the Issuing Company specifically contains this condition. 9. We certify that no payment in the nature of discount, commission, allowance or otherwise shall be made by the Issuing C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial institutions/banks for financial assistance as per object of the issue and copies of relative sanction letters. 7. Underwriting letters from the proposed underwriters to the issue. 8. Audited Balance Sheets of the Issuing Company/Promoter companies for relevant periods. 9. Auditors certificate regarding tax-benefits available to the Issuing Company, shareholders and debenture holders. 10. Certificate from architects or any other competent authority on project implementation schedule furnished by the Issuing Company, if applicable. 11. Reports from Government agencies / expert agencies / consultants / Issuing Company regarding market demand and supply for the product, industry scenario, standing of the foreign collaborators, etc. 12. Documents in support of the infrastructural facilities, raw material availability, etc. 13. Auditors' Report indicating summary of audited accounts for the period including that of subsidiaries of the Issuing Company. 14. Stock Exchange quotations of the last 3 years duly certified by designated stock exchange. 15. Minutes of the general body meetings and board meetings of the Issuing Company for matters which are in the prospectus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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