ICDR REGULATIONS FOR PREFERENTIAL ALLOTMENT The said regulations 70 of ICDR will not apply in the following cases: 1.Conversion of loan or option attached to convertible debt instruments. 2.Pursuant to scheme approved by the High Court under section 391 to 394 of Companies Act. 3.As per the scheme approved by BIFR

Regulation 71 : Relevant Date Relevant date for issue of equity shares on the preferential basis: 30days prior to the date on which the meeting of shareholders is held for considering the issue of such shares on the preferential issue Relevant date for the issue of convertible securities: 30 days prior to the date on which such security will be converted into Equity shares

Regulation 72 : Conditions for preferential issue 1.A Special Resolution have been passed for the issue of such shares on preferential basis. 2.If any of the securities are held by the proposed allottees the shares already possessed by them must be in Demat form 3.Condition of continuous listing must be complied 4.Company must obtained the PAN number for all allottees The issuer shall not issue the shares on preferential basis of securities to any person who has sold the shares 6 months prior to Relevant date. The same shall granted relaxation in trems of regulation 29A SAST

Regulation 73 For Disclosure to be made: The issuer must disclose all the disclosures in explanatory statement as required under section 173 of Companies Act, The following disclosures must be made:  The objects of the preferential issue  The proposal of promoters, directors or key managerial personnel  The shareholding pattern prior and post allotment  The time frame within which the allotment will be completed  Identity of the proposed alllottee  Percentage of shares held, control held and change in control after allotment on preferential basis  An undertaking that issuer shall re compute the price of specified securities in terms of the provisions of these regulations where it is required  If on change in price as above than the difference in price must be paid and if such amount is not paid than the securities will be subject to lock in period till such amount is paid  The certificate from Chartered accountant is required for in principle approval from SE  Special resolution must state the relevant date as defined in regulation 71.

Regulation 74:Allotment pursuant to special Resolution  Allotment pursuant to the special Resolution passed shall be completed within the period of 15 days from the date of passing of Resolution. If the allotment is not made within 15 days than the fresh resolution is required to be passed with fresh Relevant date.

Regulation75: Tenure of Securities The tenure of the convertible securities of the issuer shall not exceed eighteen months from the date of their allotment.

Regulation76: Pricing of Equity Shares  If the equity shares of the company are listed on stock exchange for the period of more than six months or more the equity shares will be allotted at a price not less than higher of the following: The average of the weekly high and low of the closing prices of the related equity shares quoted on the recognized stock exchange during the six months preceding the relevant date; or (b) The average of the weekly high and low of the closing prices of the related equity shares quoted on a recognized stock exchange during the two weeks preceding the relevant date. Any price higher than above will also be allowed.

Regulation77: Payment of Consideration  Full value of consideration is required to be paid by the allot tees at the time of allotment of such specified securities except in case of issue of warrants.

Regulation78:Lock in of specified securities  If such securities are issued to promoter/ promoter group the lock in period will be three years from the date of allotment  If such securities are issued to person other than one above than the lock in period will be one year.

Regulation79: Transfer of securities in lock in period Subject to the provisions of Securities and Exchange Board of India (Substantial Acquisition of shares and Takeovers) Regulations, 1997, specified securities held by promoters and locked-in in terms of sub- regulation (1) of regulation 78 may be transferred among promoters or promoter group or to a new promoter or persons in control of the issuer: Provided that lock-in on such specified securities shall continue for the remaining period with the transferee.

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