Item: Special Resolution For Issue of Shares on Preferential Basis
Author: Muhammed Fasil K

Special Resolution For Issue of Shares on Preferential Basis

"RESOLVED THAT pursuant to Sections 42 & 62 and all other applicable provisions, if any, of the Companies Act, 2013 and Rule 14 of Companies (Prospectus and Allotment of Securities) Rules, 2014(including any statutory modification thereto or reenactment thereof for the time being in force) and in accordance with the Foreign Exchange Management Act, 1999 (including any amendment, modification, variation or re-enactment thereof, and the provisions of any rules/regulations/guidelines issued/framed by the Central Government, Reserve Bank of India, Foreign Investment Promotion Board thereto), Articles of Association of the Company, the Listing Agreement entered into by the Company with the Stock Exchanges where the securities of the Company are listed, and subject to the approval, consent, permission and/or sanction, as may be required from the Central Government, Reserve Bank of India, SEBI and any other appropriate authority, Institution or Body and subject to such terms, conditions, alterations, corrections, changes, variations and/or modifications, if any, as may be prescribed by any one or more or all of them in granting such approval, consent, permission and/or sanction, the Consent of the Company be and is hereby given to the Board of Directors of the Company to create, offer, issue, and allot up to ……………………. Equity Shares of Rs.__/- each at a premium of Rs. ___ /- considering the date thirty days prior to the date of this meeting as the Relevant Date as per provisions of Regulation 71 of Chapter VII of SEBI (ICDR) Regulations, 2009 for Preferential Issues on such further terms and conditions, including payment of monies as may be approved or finalised by the Board of Directors to the following entity being the entity other than Promoters Group as detailed herein below:

Name of the proposed allottee PAN Category

''RESOLVED FURTHER THAT for the purpose of giving effect to the aforesaid special resolution under Sections 42& 62 of the Companies Act, 2013, the Board of Directors (which term shall include any duly constituted and authorized committee thereof) of the Company be and is hereby authorized to take such steps and to do all such other acts, deeds, matters and things and accept any alteration(s) or amendment(s) or correction(s)or modification(s) as it may deem fit and appropriate and give such directions/instructions as may be necessary to settle any question, difficulty or doubt that may arise in regard to offer, issue, allotment of the said equity shares and also to seek the listing of such equity shares in one or more stock exchanges in India.''

“RESOLVED 'FURTHER THAT the Equity Shares to be issued and allotted shall rank pari passu with the existing Equity Shares of the Company in all respects.”

“RESOLVED FURTHER THAT the Board be and is hereby authorized to accept any modification in the proposal as may be required by the agencies involved in such issues but subject to such conditions as the Stock Exchanges/SEBI/Central Government or such other appropriate authority may impose at the time of their approval as agreed by the Board.”

Explanatory Statement

The Board of Directors on …………….., subject to necessary approval(s), has approved the proposal for raising funds up to Rs…………Crores by way of issue of equity shares on preferential basis to mobilize funds for funding current/future expansion plans/activities directly by the Company or thorough subsidiaries/joint venture companies, potential acquisitions, working capital and general corporate purposes.

The Information as required under Regulation 73 of the SEBI (ICDR) Regulations, 2009 for Preferential Issues is as under:

(a) Object of the issue: To mobilize funds for funding current/future expansion plans/activities directly by the Company or through subsidiaries/joint venture companies, potential acquisitions, working capital and general corporate purposes.

(b) Intention of Promoters/Directors/Key Management Personnel to subscribe to the offer: Promoters/Directors/Key Management Personnel of the company are not intending to participate/subscribe to the present offer.

……………………..

(d) The Company will complete the issue & allotment of Equity Shares within a period of 15 days from the date of passing of the resolutions by the shareholders or when the allotment on preferential basis requires any approval by any regulatory authority like Stock Exchanges or Central Government or any statutory body, the allotment of shares will be completed within 15 days from the date of such approvals.

(e) Identity of proposed allottee(s), percentage of expanded capital to be held by them:

There will not be any change in the management control of the Company on account of this proposed preferential allotment except minor change in the shareholding pattern as well as voting rights.

(f) Lock In Requirements: The shares to be allotted on preferential basis shall be subject to lock-in as per applicable SEBI regulations in this regard.

(g) Auditors’ Certificate: M/s…………………..& Associates, Chartered Accountants, the Statutory Auditors of the Company have certified that the preferential issue is being made in accordance with the requirements contained in SEBI (ICDR) Regulations, 2009. A copy of the certificate is kept for inspection at the Registered Office of the Company during the business hours.

(h) Relevant Date: Relevant Date for the purpose is ……………….. which is the date 30 days prior to the date of EGM (being the day preceding the weekend/holiday) where this resolution is being considered for approval.

(i) Pricing & Undertaking to re-compute the price: Price is determined in terms of Regulation 76 of SEBI (ICDR) Regulations. Further, the Company undertakes to re-compute the price of the equity shares, if at all required, in terms of the provisions of these regulations where it is required to do so.

(j) Undertaking to put under lock-in till the re-computed price is paid: The Company undertakes that if the amount payable on account of the recomputation of price if not paid within the time stipulated in these regulations, the specified equity shares shall continue to be lock-in till the time such amount is paid by the allottee(s).

Section 62 of the Companies Act, 2013 provides inter alia, that when it is proposed to increase the issued capital of a Company by allotment of further shares, etc., such further shares shall be offered to the existing shareholders of the Company in the manner laid down in the Section unless the shareholders in general meeting decide otherwise by passing a special resolution. Therefore, consent of the shareholders by way of Special Resolution is being sought pursuant to the provisions of Sections 42 & 62 and all other applicable provisions of the Companies Act, 2013 and in terms of the provisions of the SEBI (ICDR) Regulations, 2009 and the listing agreements executed by the company with the Stock Exchanges where the Company's shares are listed.

The members are, therefore, requested to accord their approval authorizing the Board to go for the proposed private placement and/or preferential issue as set out in the resolution.

None of the Directors, any other Key Managerial Person(s) of the Company and their relatives are, in any way, concerned or interested in the said resolution.

Procedure For Issue of Shares on Preferential Basis

E-book on draft resolutions and procedures

Special Resolution For Issue of Shares on Preferential Basis

Special Resolution For Issue of Shares on Preferential Basis

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