Subject NOT available

click here for IIIF manifest

REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY

PART II—Section 3—Sub-section (ii)

PUBLISHED BY AUTHORITY

No. 45] NEW DELHI, WEDNESDAY, FEBRUARY 5, 1969/MAGHA 16, 1890

Separate paging is given to this part in order that it may be filed

as a separate compilation.

MINISTRY OF FINANCE

(Department of Economic Affairs)

(Office of the Controller of Capital Issues)

NOTIFICATIONS

New Delhi, the 1st February 1969

THE CAPITAL ISSUES (EXEMPTION) ORDER, 1969

S.O. 558.—In exercise of the powers conferred by subsection ft) of section 6 of the Capital Issues (Control) Act, 1947 (29 of 1947), and in supersession of the Capital Issues (Exemption) Order, 1961 and the Capital Issues (Exemption) Order, 1966, published with the notifications of the Government of India in the Ministry of Finance (Department of Economic Affairs) No. S.O. 1234. dated the 23rd May, 1961 and No. G S R. 1705, dated the 4th November, 1966, respectively, the Central Government hereby makes the following order, namely :—

1. Short title and commencement.—(1) This order may be called the Capital Issues (Exemption) Order, 1969.

(2) It shall come into force on the date of its publication in the Official Gazette.

2. Interpretation.—In this order, unless the context otherwise requires,—

(a) "Act" means the Capital Issues (Control) Act, 1947 (29 of 1947); (b) "banking institution" means any institution carrying on the business of banking to which the Blinking Regulation Act, 1949 (10 of 1949), applies whether wholly or in part;

( 149)

(c) "consideration involved" means,—

(i) in relation to the issue of securities without a nominal value, the amount to be raised by ihe isiue of securities, and, in the case of securities with a nominal value, the sum of the total nominal value and of any premium, entrance fee or other payment which the person subscribing to the securities mtiy be called upon to pay; and

(ii) in relation to the borrowing of money, the amount of money to b" borrowed;

(d) "insurance company" means any insurer being a company which may be wou"d up under the Companies Act, 1956 (1 of 1936):

(e) "bunking company", "insurer" and "prov;dent society" shall have the meanings respectively assigned to them in clause (c) of section 5 of the Banking Regu- lation Act, 1949 (10 of 1949), and in clause (9) of section 2 and sub-section (1) of section 65 of the Insurance Act, I93S (4 of 1938);

(f) words and expressions used in this order and not defined but defined in the Act, shall have the meanings respectively assigned to them in the Act, 3. Ortata is&ut of Mcurities exempted from certain provision* of the Act.—(1) Tht Following issue of securities shall be exempl from the provisions of sections 3, 4 and 5 of the Act, namely, the issue of securities irrespective of the value of consideration involved by—

(i) a private company as defined in section 3 of Ihc Companies Act, 1956 (1 of 1956);

fii) a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), provided that no portion of the issue of securities is mad* to the general public;

(iii) a banking company or an insurance company or a provident society incorporated as a company :

Provided that if the total issue of capital in a. otriod of 365 days exceeds Rs. 25 lakhs, the above-mentioned companies shall, as soon as the issue has been made, send a report thereon in duplicate, to the Controller of Capital Issues, to the extent applicable, in the form specified in the Schedule annexed to this order, to be followed by reports as on the 31st March, the 30th June, the 30th September and the 31st December until the securities have been Rot fully paid-up, together with a copy of ihe audited and published balance sheet immediately after the securities have been fully paid-up.

4. Issue of securities by public limited companies wholly exempted from certala provisions of the Act.—The following issues by public limited companies shall be ^xerriT from the provisions of sections 3, 4 and 5 of the Act, namely :—

(i) the issue of securities by a public limited company and all transactions relate to such securities issued by any such company, if the value of the consideration involved in such issue together with the value of the consideration imvolved in any previous issue of securities made by such company within the twelve months immediately preceding such issue, docs not exceed twenty-five lakhs of rupees;

Explanation.—The aforesaid limit of twenty-five lakhs of rupees shall have referenc* to the total value of all the issues and transactions during any period of twelve months and not to the value of each individual issue or transaction or to any part thereof, or to the value of consideration received from any single party;

(ii) the issue of securities for the purpose of sub-dividing any securities into securities of any smaller denomination or consolidating any securities into sccurties of any laTger denomination :

Provided that in either case the transaction does not involve anv increase in the total value of the paid-UD capital of the company and that the securities sub-divided or consolidated wrc of the same kind:

(iii) the issue of securities in a east? where,—

(a) an amalgamation of two or more companies other iban banking companies rms been notified bv the Central Government by an order under section 396 of the Companies Act, 1950 (1 of 1956); or

(b) an amalnamation of two or more banking companies hus been approved by the Reserve Bank of Tndia under section 44 \ of the Banking Regulation Act. 1949 (10 of 1949), and, \he total paid-up capital of the amalgamated

company or the amalgamated banking company after the issue of securities under this provision is not greater than inc total paid-up capital of the amalgamating companies or the amalgamating banking companies as the case may be;

(iv) the loan* Erantcd or debentures tuken up or bonds or promissory notes issued by the Industrial Development Bank of India established under the Industrial Development Bank of India Act, jt>64 (18 of 1964), the Industrial Finance Corporation established under the Industrial Finance Corporation Act, 1948 1.15 of 194S), a State Financial Corporation established under the State Financial Corporations Act, 1951 (63 of 1951), the Madras Industrial Invest- ment Corporation Ltd.. the Industrial Credit and Investment Corporation ol India Ltd., the National Industrial Development Corporation of India. Ltd., the Shipping Development Fund Committee, the Life Insurance Corporation of India, the Rehabilitation Industries Corporation of India Ltd., a State Electricity Board constituted under tho Electricity (Supply) Act, 1948 (54 of 1948), the State Trading Corporation of India Ltd., or the Minerals and Metals Trading Corporation of India Ltd. ;

(v) the guarantees given by the industrial Development Bank of India under clause (e) or clause (f) or clause (g) of sub-section (1) of section 9 of the Indus- trial Development Bank of India Act, 1964 (18 of 1964) or by the Industrial Finance Corporation under clause (b) of sub-section (1) of section 23 of the Industrial Finance Corporation Act, 1948 (15 of 1948), or by the Central Government or a State Government under sub-section (2) of the said section 23 ox the Industrial Finance Corporation Act, 1948 (15 of 1948), or any other guarantees given or furnished by stny other body or institution specified in twb^clause (iv);

(vi) the issue and acceptance of securities other than debentures, being an issue made by a company in the ordinary course of its business and solely for the purpose of that business, to a banking institution or its nominee, in respect of advances or overdrafts, or ttuariintees from time to time grunted or furnished or to be granted or furnished by such banking institution;

(vii) instruments executed bv the Central Government or a State Government guaranteeing advances or overdrafts referred to in sub-clause (vi) or guaran- teeing the payments due to a banking institution arising out of any guarantee furnished by that banking institution;

(vin) the issue and acceptance of debentures, being an issue made by a company in the ordinary course of its busines" and for the purposes of that business to a banking institution or its nominee, if the total value of such debentures together with the value of any "previous issue of such debentures made by such company within the twelve months immediately preceding soch issue does not exceed twenty-five lakhs of rupees;

(ix) third party guarantee on behalf of a coavpany in respect of—

(a) the loans granted or debentures taken up by tlie institutions specified in sub-

clause (iv); and

(b) the advances, overdrafts or guaraniecs, referred to in sub-clause (vi) granted or furnished or to be granted or furnished by a banting institution, an insurance company, managing agents of a company, or the managing director or director of u company;

(x) charges made under mining jeases by the lessees in favour of the lessors charging the assets of a company for the rlue payment of rents and royalties reserved by the instrument of lease.

5. feme of securities by uublic limited companies exempted from certain prorMoos of (fce Act. subject to obsevvaiKc of criteria.—The issue of securities for consideration exceed- ing rupees twenty-five lakhs proposed to be made by a public company, including a. Gov- ernment company as defined in section 617 of the Companies Act, 1956 (1 of 1956) which propones to make an offer of th" securities to the public by prospectus, shall be exempt from the provisions of section"; 3, 4 and 5 of the Act

Provided that—•

(i) the issun Joes not comprise or include preference shares carrying rights of parti- cipation over and above the fixed amount or an amount calculated at a

fixed rate in the profits or conversion into equity shares or debentures curry- ing right of conversion into equity shares or payable to bearer;

(iij as a result of the proposed issue, the equity of the company is not less than one- half of its debt;

Explanation 1.—"debt", includes all borrowings repayable not earlier than five years from the date of borrowing (whether debentures, loans or deferred payments including interest thereon, for the purchase of capital equipment) and preference shares redeemable not later than twelve years from the date of promoters, directors and their friends is not less than fifteen per cent of the iaiue;

Explanation 2.—"equity" includes paid-tip equity share capital, share premium, free reserves, irredeemable preference shares and preference shares redeemable not earlier than twelve years from the date of issue;

(iti) as a result of the proposed issue the total paid-up preference share capital will not be more than one-third of tl\c total paid-up equity share capital; Civ} where the securities issued by the company, or a pnrt thereof, is for the purpose of taking over an existing business or asset, the take-over is effected at the book value of such business or asset;

(y) where a public company is formed on conversion of a private company or for taking over the business of a partnership or a proprietorship or an association of persons, ihe consideration for issue of securities by the public company to the shareholders of such private company, or to the members of such partnership, proprietorship or an association of persons., as the case may be, for taking over the same as a going business and any part of the assets of such private company, partnership, proprietorship or an association of persons, does not exceed the book vulue of th; net asset.- so taken over of the private company, partnership, proprietorship or an association of persons;

(vl) no securities are issued in consideration of revaluation of asset:; or creation of

any intangible or fictitious assets;

(vii) the issue price of the securities to be issued is at par and not at a premium or

discount;

(vlii) any offer of securities for public subscription is such as to make the securities

eligible for listing on a recognised stock exchange;

(ix) the rate of interest on debenture or the rate of dividend on preference shares does not exceed the rate notified by the Central Government from time to time as applicable to such securities and the timing of the offer of securities proposed to be issued is in conformity with the directions notified by the Central Government at the beginning of each calendar year;

(x) where the issue of equity capital involves an offer for subscription by the public for the first time, the value of eouitv capital subscribed privately by the promoters, directors and their friends is not less than fifteen per cent of the total issued equity capital, if it does not exceed one crore of rupees, twelve- and-a-half per cent, if it does not exceed two crores of rupees, ;md ten per cent, if it is in excess of two crores of rupees;

(xi) in a public offer of shares no reservation is to be made in favour of any person or class of persons except with the prior approval of the Controller of Capital Issues;

(xii) securities issued in the form of debentures or bonds shall be payable to registered holders only;

(xiii) if the consideration for the issue of securities is proposed to be got fully paid-up by making calls, such calls shall be made on a uniform basis on all securities falling under the same class and completed within a period of five years from the date of the offer:

Provided further that—

(i) a company satisfying the criteria under the above proviso shall file with the Controller of Capital Issues a statement of its capital issue proposals in the form specified in the Schedule annexed to the Capital Issues (Application for Consent) Rules, 1966, notified under No. G.S.R, 600,

Sfcc. 3(ii)J ll-iii GAZETTE O* 1NP1A EXTRAORDINARY

I53

dated the 29th March, 1^66, together with the enclosures mentioned therein, except the treasury chalan, at icast 30 days before a prospectus is issued, ;i statement in lieu of prospectus is hie.i 01 any otter relating to the whole or pan of the issue is made;

Explanation*—The statement of proposals rel'erred to in this proviso need nol be accompanied by uny lee;

(li) an acknowledgement in icceipt of Ihe statement of proposals so filed has been obtained from the Controller oi' Capital issue.;

Uii) the company shall state in a prominent place in its prospectus or statement in lieu or prospectus or letter of otter to its shareholders, as tne ease may be that the issue of securities is being made in terms oi the provisions or this order;

(iv) as soon as the issue oi' capital has been made, a report thereon is sent in duplicate to the Controller oi' Capital Issues, to tne extent applicable, in the form speciiied in the Schedule annexed to this order, to be followed by reports as on the 31st March, the 30th June, the 3Utti September and the 31st December until the securities have been got fully paid-up, together with a copy of the audited and published balance sheet immediately after the securities nave been fully paid-up.

(>. Exemption of public oiler for ualc of certain securities from certain provisions of the Act.—rl he following shall be exempt from the provisions of section 4 of the Act in so far as such provisions relate to any documenti publicly offering for sale, namely:—•

(a) any security issued in the State before the 17th May, 1943; and (b) any security issued outside the State before that date, being a security of a class of which no further issue has been made after that date by or on behalf of the same company without the consent or recognition of the Central Government.

7. Exemption of certain securities, the issues of which have been regularised.—The following shall be exempt from the provisions of sub-section (2) of section 5 of the Act, namely:—

(a) securities the issue of which has involved a contravention of sub-sections (1), (2) and (3) of section 3 or section 4 of the Act, if such contravention has been condoned under the provisions of sub-section (2) of section 6 of the Act; and

(b) any security transferred by the operation of the law of inheritance or succes- sion or by the decree of a competent court.

8. Saving.—Nothing contained in this order :—

(i) shall apply to any issue of securities irrespective of the amount involving the capitalisation of profits or reserves for the purpose of issuing additional capital or conversion of partly paid-up shares into fully paid:up shares or for the increase of the paid-up value or par value of shares already issued by any company private or public including a banking company or an insurance company, or a provident society incorporated as a company;

(ii) shall affect or be deemed to affect the power of the Central Government to modify in the public interest any proposal for the issue of securities by a public company desiring to avail itself of the exemption under this order; (iii) shall be deemed to exempt any public company from obtaining the consent of the Central Government under the Act in respect of issues of all securities the terms of which, for whatsoever reasons, do not satisfy the provisions of clause 5,

9. Clarification.—.It is hereby clarified that all issues of securities not covered by this order and, in particular, the following issues of securities arc not exempt from the provisions of sections 3, 4 and 5 of the Act, namely :—

fi) bonus issues as referred to in clause 8(1) of this order by any company what- soever—private icompany,. banking -and insurance company. Government company and public company—irrespective of the amount of consideration involved;

fii) issue of preference shares, carrying participating or conversion rights;'

(iii) issue of debentures carrying conversion rights or issue of debentures not payable to registered holders;

(iv) issue of securities at a premium or discount;

(v) issue of securities involving relaxation of any or all the conditions mentioned in clause 5 above-

SCHEDULE

(See clauses 3 and 5)

Report to be sent in Duplicate to the Controller of Capital Issues

i Name of the Company •• — ——

a. Amount of Issue—(i) Equity shares Rs.—

Debentures Rs.——— •

—— (u) Preference ("'") Loans etc. Shares Rs. — (iti) Rs. _—^ .

3. Issue made by the Company—-Type of Issue

Date of Issue Amount Type of Security

(a) 'Rights' issue* other than Bonus

(A) Firm Allotments*

„ , .

(c) Offer to the Public* by prospectus

. — —

(£) Loan etc. . . ..

Amount underwritten :—

Name of the underwriter

Amount

Type of Security underwritten

5. Applications received in respect of offer of shares made to the General public by prospectus (two copies of which should be enclosed) under item 3(c) above and the result of subscription.

No. of shares

Kind of security

No. of Application

Amount of Subscription

(1) Applications received in res-

pect of offer to the public .

. .. ..

_ _„ .

("0 Applications rejected (m) Valid applications considered from the public for allotment

(to) Allotments made in respect of

.

(m) above

(v) Allotments to underwriters under underwriting obligations other than firm allotments

•The information may be given security-wise e.g. Equity shares, Preference shares, Debentures.

6. Insues taken up and/or allotments made for the period under reports.

Particulars ol' allotment* Date(s) of Equity shares

lJrerercncejhures Debenture nllotment

Subscribed Paid-up

Subscribed Paid-up

(i) "Rieht " shams other

than Bonus shares.

(a) Existing residents

(b) Hxisting non-residents

SUB-TOTAL

(ii) firm Allotments.

(a) Foreign Collabora-

tors

(b) Promoters, Direc- tors, their friends and relatives (c) Pinanckl Institu-

tions**

(d) Central and State Governments (e) Brokers & under- writers other than item (iii)(d) below. (f) Existing share- holders and others

SUB-TOTAL

s

(iii) Allotment of sluires offered to the general public by prospectus. (a) Directors, Mg. Agents, Sccretarie & Treasurers (b) Financial Institu-

tions**

(c) Central & State

Govts.

T

(d) Underwriters unde underwriting obligation (c) Cos, registered

under the Com- panies Act

(1) General Public .

GRAND TOTAL (i), fii) A- (iii i)

(iv) Loan Capital,

Date of creation ol chu rgc on the as sets and Ami).nit of eh arge.

10

7. Total capital raised up

the end of this repori :-

Subscribed Paid-up Oebentures Loan etc. Equity shares Preference uliarc"; :

Signature of tlie person submitting

the report.

• O n ly t he r e l e v a nt p a r t i c u l a rs HS a rc a p p l i c a b le to t he c o m p a ny n e ed be g i v e n.

**N.imes of the Financial Institutions e.g. Life Insurance Corporation of India, I.]\C. of India, I.C.I.C, I. and S.F.C.'s, Investment or Unit trusts, etc. •should be separately indicated.

NOTE.—(i) The reporis arc to lie made in respect of capital issued, in accordance with the Statement of proposals. The reports should be filed at the end of each quarter as at 31st March, 30th June, 30th September and 31st December until the capital has been fully subscribed and paid-up, (ii) A copy of the Balance Sheet and Profit and Loss Account of the accounting year in which the capital has been fully subscribed and paid- up, should be filed. Subsequent reports, however, need not be sent if the capital issued has been fully subscribed and paid-up. Subsequent to the filing of the Balance Sheet and Profit and Loss Account no report need be sent.

[No. F. 2(6)-CCl/66.J

S.O. 559.—In pur.siumct' ol sub-clause "(ix) of clause 5 ot the Capital Issues of Exemp- tion,) Order, 1969. published with the notification of the Government of India in the Ministry of Finance (Department of Economic Affairs) No. S.O. 558, dated the I si February, 1969, the Central Government hereby notifies the following rates- for the purposes of the said sub-clause, namely :—

(1) the rate of dividend on preference shares to be issued under the authority of the said Order shall not exceed 95 per cent per annum (free of company's tax but subject to deduction of taxes at prescribed rates);

(2) the rate of Interest on debentures, bonds, etc., to be issued under the authority

of the said Or'der shall not exceed 7'75 per cent per annum.

[No, F, 2(6)-CCI/66.]

S.O. 560,—-In pursuance of sub-clause fix) of clause 5 of the Capital Issues (Excmp. tion) Order, 1969, published with the notification of the Government of India in the Ministry of Finance (Department of Economic Affairs) No. S.O. 558, dated the 1st February. 1969, the Central Government hereby directs that during the calendar year 1969, no offer of seci'vitics of a nominal value of Rs. 250 lakhs or above (exclusive of the amounts to be subscribed bv the Government and non-residents) by a nublic limited company shall be made or kept open during the period 1st June to 31st August (both d'lVR inclusive without obtaining the prior permission of the Central Government a¹; to the timing of the offer.

[No. F. 2(6)-CCT/66.]

M. K. VENKATACHALAM.

Controller of Capital Issues.

PRINTED BY THE CENERVL MANAGER, GOVERNMENT OF INDIA PRESS, NE'V DELHI AND l'UHIJSHET) BY THE MLANAfiKR OF PUBL.rCATT.Qtra, DEMIT, 1 9 69