BY PRIVATE & LISTED & UNLISTED PUBLIC COMPANIES Chapter III Part II – Private Placement Section 42 (Sub Section )

Public CompaniesPrivate Companies Public Offer -- Through private placement by complying with provisions of Part II Right / Bonus Issue ISSUE OF SECURITIES BY Provisions of Part II will apply to listed / unlisted public companies only if the offer is made to persons not exceeding 50 or such number as may be prescribed (Present number is 200)otherwise it will treated as Public offer provisions of Part I will apply

"Private Placement" means any offer of securities or invitation to subscribe securities to a select group of persons by a company (other than by way of public offer) through issue of a private placement offer letter and which satisfies the conditions specified in this section.

To whom Private Placement can be made Issue /Offer to Select group of persons through Private Placement Offer Letter (PAS 4) Not exceeding 50 or such higher number as may be prescribed ( Present limit is 200 ) Exception - Any offer made to QIB or ESOP shall not be considered while calculating limit of 200

 Value of such offer or invitation per person shall be with an investment size of not less than Rs 20,000/- of face value of the securities  First, record the name of persons to whom the private placement is to be made  Then take Previous Approval of shareholders by passing Special Resolution  Then send --Private Placement Offer Letter -PAS-4 – to be sent to persons whose names are recorded, accompanied by application form either in writing or in electronic mode if not made to the person addressed and any application not conforming to provisions shall be treated as invalid  Offer shall not be made to more than 200 persons in aggregate in a financial year Exception - Any offer made to QIB or ESOP shall not be considered while calculating limit of 200

 Maintain a complete record of private placement offers in FormPAS-5  Payment of Subscription money – Subscription money to be paid Only by Cheque /Demand Draft /other Banking Channel but NOT BY CASH AND it should be from the account of the person who subscribe to securities Company should keep it in separate bank account with Schedule Bank  Compulsion of Allotment Allot Securities within 60 days of receipt of application money, if not allotted within 60 days pay back it within 15 days If fails to pay back – pay 12% p.a. from 60 th day

 Subscription Money can be utilized only for Adjustment against allotment of Securities Repayment of monies where company is unable to allot securities.  Restriction on Making Private Placement If any offer or invitation made earlier have not been completed or that offer or invitation has not been withdrawn or not abandoned by the company - - then can not make fresh offer/invitation No Advertisement / No use of media / marketing or distribution channel/agent to inform public

Filing of Forms Form NoPurpose of FormTime Limit PAS-3Return of Allotment Within 30 days of allotment PAS-4 (To be filed in GNL-2 Form) Private Placement Offer Letter 30 days from Circulation of PPOL PAS-5 (To be filed in GNL-2 Form) Complete record of private placement offers To be filed along with PAS-4