GSR No. 700(E) – Central Government hereby notifies the afterward scheme, for facilitating affair of Adopted Bill Convertible Bonds and Accustomed Shares through All-around Archive Mechanism by Indian Companies, namely:-
1. Short appellation and Commencement.
(1) This arrangement may be alleged the Affair of Adopted Bill Convertible Bonds and Accustomed Shares (Through Archive Cancellation Mechanism) Scheme, 1993.
(2) It shall be accounted to accept appear into force with aftereffect from the aboriginal day of April, 1992.
In this scheme, unless the ambience contrarily requires,-
(a) “Domestic Babysitter Bank” agency a cyberbanking aggregation which acts as a babysitter for the accustomed shares or adopted bill convertible bonds of an Indian aggregation which are issued by it adjoin All-around Archive Receipts or Certificates;
(b) “Foreign Bill Convertible Bonds” agency bonds issued in accordance with this arrangement and subscribed by a non-resident in adopted bill and convertible into accustomed shares of ‘the arising aggregation in any manner, either in whole, or in part, on the base of any disinterestedness accompanying warrants absorbed to debt instruments;
(c) “Global Archive Receipts” agency any apparatus in the anatomy of a archive cancellation or affidavit (by whatever name it is called) created by the Across Archive Coffer alfresco India and issued to non-resident broker adjoin the affair of accustomed shares or Adopted Bill Convertible Bonds of arising company;
(d) “Issuing Company” agency an Indian aggregation acceptable to affair Adopted Bill Convertible Bonds or accustomed allotment of that aggregation adjoin All-around Archive Receipt;
(e) “Overseas Archive Bank” agency a coffer authorised by the arising aggregation to affair all-around archive receipts adjoin affair of Adopted Bill Convertible Bonds or accustomed shares of the arising company;
(f) the words and expressions not authentic in the Scheme, but authentic in the Income-tax Act, 1961 (43 of 1961), or the Companies Act, 1956 (1 of 1956), or the Balance and Barter Lath of India Act, 1992 (15 of 1992), or the Rules and Regulations affected beneath these acts, shall accept the acceptation appropriately assigned to them, as the case may be, in the Income-tax Act or the Companies Act, or the Balance and Barter Lath of India Act.
1 [ (g) “a software company” agency a aggregation affianced in accomplish or assembly of software area not beneath than 80% of the company’s about-face is from software activities;
(h) “information technology software and admonition technology services” agency the companies which accord with such activities as authentic in advocacy No. 19(a) and (b) of the notification anachronous 25th July, 1998, issued by the Planning Commission. ]
3. Accommodation for affair of convertible bonds or accustomed shares of arising company.
(1) An arising aggregation acquisitive of adopting adopted funds by arising Foreign. Bill Convertible Bonds or accustomed shares for disinterestedness issues through all-around Archive Cancellation is adapted to access above-mentioned permission of the Department of Economic Affairs, Ministry of Finance, Government of India.
5[3(1)(A). An Indian company, which is not acceptable to accession funds from the Indian basic bazaar including a aggregation which has been aseptic from accessing the balance bazaar by the Balance and Barter Lath of India (SEBI) will not be acceptable to affair (i) Adopted Bill Convertible Bonds and (ii) Accustomed Shares through All-around Depositary Receipts beneath the Adopted Bill Convertible Bonds and Accustomed Shares (Through Depositary Cancellation Mechanism) Scheme, 1993.
3(1)(B). Unlisted Indian Companies arising All-around Depositary Receipts/Foreign Bill Convertible Bonds shall be adapted to accompanying account in the Indian Banal Exchange(s).
3(1)(C) Erstwhile Across Accumulated Bodies (OCBs) who are not acceptable to advance in India through the portfolio avenue and entities banned to buy, advertise or accord in balance by SEBI will not be acceptable to subscribe to (i) Adopted Bill Convertible Bonds and (ii) Accustomed Shares through All-around Depositary Receipts beneath the Adopted Bill Convertible Bonds and Accustomed Shares(Through Depositary Cancellation Mechanism) Scheme, 1993.]
(2) An arising aggregation gluttonous permission beneath sub-paragraph (1) shall accept a constant clue almanac of acceptable achievement (financial or otherwise) for a minimum aeon of three years, on the base of which an approval for finalising the affair anatomy would be issued to the aggregation by the Department of Economic Affairs, Ministry of Finance.
(3) On the achievement of finalisation of affair anatomy in appointment with the Lead Manager to the issue, the arising aggregation shall access the final approval for proceeding advanced with the affair from the Department of Economic Affairs.
Explanation.– For the purposes of sub-paragraphs (2) and (3) “issue structure” agency any of the requirements which are provided in paragraphs 5 and 6 of this Scheme.
(4) The Adopted Bill Convertible Bonds shall be denominated in any convertible adopted bill and the accustomed shares of an arising aggregation shall be denominated in Indian rupees.
(5} Back an arising aggregation issues accustomed shares or bonds beneath this scheme, that aggregation shall bear the accustomed shares or bonds to a Calm Babysitter Coffer who will, in acceding of agreement, acquaint the Across Archive Coffer to affair All-around Archive Cancellation or Affidavit to non-resident broker adjoin the shares or bonds captivated by the Calm Custodians Bank.
(6) A All-around Archive Cancellation may be issued in the negotiable anatomy and may be listed on any all-embracing banal exchanges for trading alfresco India.
(7) The accoutrement of any law apropos to affair of basic by an Indian aggregation shall administer in affiliation to the affair of Adopted Bill Convertible Bonds or the accustomed shares of an arising aggregation and the arising aggregation shall access the all-important permission or absolution from the adapted ascendancy beneath the accordant law apropos to affair of capital.
2 [ 3A. Affair of All-around Archive Receipts
Indian companies affianced in Admonition Technology Software and Admonition Services, are acceptable to action to their non-resident/resident abiding advisers (including Indian and Across alive directors) all-around archive receipts adjoin the affair of accustomed shares beneath the arrangement accountable to the operational guidelines/conditions issued from time to time by the Government.
3B. Indian companies affianced in Admonition Technology Software and Admonition Technology Services as authentic in advocacy No. 19(a) and (b) of the Notification anachronous 25-7-1998 issued by the Planning Commission, are acceptable to action additionally to the non-resident/resident abiding advisers (including Indian and across alive directors) of their accessory companies, congenital in India or away and affianced in Admonition Technology Software and Admonition Technology Services, All-around Depositary Receipts adjoin the affair of accustomed shares beneath the Arrangement accountable to the accommodation altitude and operational guidelines/conditionalities appear from time to time by the Government. ]
3 [ 3C. Indian companies registered in India and affianced in the afterward sectors/areas, area 80 -per cent of about-face is from these sectors/areas of the operation/business of the aggregation in the three antecedent banking years, are acceptable to action all-around archive receipts adjoin the affair of accustomed shares beneath the Arrangement to their non-resident/resident abiding advisers (including Indian and across alive directors) and additionally of their accessory companies, congenital in India or abroad, accountable to the accommodation altitude and operation guidelines/conditionalities appear from time to time by the Government:–
(i) Admonition Technology (as authentic in the advocacy No. 19(a) and (b) of Gazette Notification anachronous 25th July, 1999, issued by the Planning Commission) and Entertainment Software.
(iv) Any added activities aural the ability based area as notified by the Government from time to time.
These norms would additionally be accessible for multi-product adapted companies which do not accommodate to the belief of 80 per cent about-face over as mentioned aloft but accepting an boilerplate anniversary consign balance of Rs. 100 crores from the sectors mentioned aloft in the three antecedent banking years. ]
4. Limits of adopted advance in the arising company
The accustomed shares and Adopted Currency-Convertible Bonds issued adjoin the All-around Archive Receipts shall be advised as absolute adopted advance in the arising company. The accumulated of the adopted advance fabricated either anon or alongside (through All-around Archive Receipts Mechanism) shall not beat 51% of the issued and subscribed basic of the arising company:
Provided that the investments fabricated through Offshore Funds or by Adopted Institutional Broker will not anatomy allotment of the absolute laid bottomward in this paragraph.
5. Affair anatomy of the All-around Archive Receipts
(1) A All-around Archive Cancellation may be issued for one or added basal shares or bonds captivated with the Calm Babysitter Bank.
(2) The Adopted Bill Convertible Bonds and All-around Archive Receipts may be denominated in any advisedly convertible adopted currency.
(3) The accustomed shares basal the All-around Archive Receipts and the shares issued aloft about-face of the Adopted Bill Convertible Bonds will be denominated alone in the currency.
(4) The afterward issues will be absitively by the arising aggregation with the Lead Manager to the issue, namely:
(a) accessible or clandestine placement;(b) cardinal of All-around Archive Receipts to be issued;(c) the affair price;5[(ca) Listed Companies – The appraisement should not be beneath than the college of the afterward two averages:(i) The boilerplate of the account aerial and low of the closing prices of the accompanying shares quoted on the banal barter during the six months above-mentioned the accordant date;(ii) The boilerplate of the account aerial and low of the closing prices of the accompanying shares quoted on a banal barter during the two weeks above-mentioned the accordant date.The ‘relevant date’ agency the date thirty canicule above-mentioned to the date on which the affair of the accepted anatomy of shareholders is held, in acceding of area 81(lA) of the Companies Act, 1956, to accede the proposed issue.(cb) Unlisted Companies – The appraisement should be in accordance with Reserve Coffer of India Regulations notified beneath Adopted Barter Management Act, 1999]5(d) the bulk of absorption payable on Adopted Bill Convertible Bonds; and(e) the about-face price, coupon, and the appraisement of the about-face options of the Adopted Bill Convertible Bonds.5[(e)(i) Listed Companies – The about-face bulk of the Adopted Bill Convertible Bonds should be in accordance with para 5(4)(ca) ibid.(e)(ii) Unlisted Companies – The about-face bulk of the Adopted Bill Convertible Bonds should be in accordance with Reserve Coffer of India Regulations notified beneath Adopted Barter Management Act, 1999.]
(5) There would be no lock-in aeon for the All-around Archive Receipts issued beneath this scheme.
6. Listing of the All-around Archive Receipts
The All-around Archive Receipts issued beneath this schemes may be listed on any of the Across Banal Exchanges, or Over the Counter Exchanges or through Book Entry alteration Systems accustomed away and such receipts may be purchased, bedevilled and advisedly communicable by a actuality who is a non-resident aural the acceptation of area 2(q) of the Adopted Barter Regulation Act, 1973 (46 of 1973) accountable to the accoutrement of that Act.
7. Alteration and redemption
(1) A non-resident holder of All-around Archive Receipts may alteration those receipts, or may ask the Across Archive Coffer to redeem those receipts. In the case of redemption, Across Archive Coffer shall appeal the Calm Babysitter Coffer to get the agnate basal shares appear in favour of the non-resident investor, for actuality awash anon on account of the non-resident, or actuality transferred in the books of accounts of the arising aggregation in the name of the non-resident.
4 [ (1a) The All-around Archive Receipts adored and basal shares awash in acceding of 7(1) of the Arrangement may be reissued to the admeasurement of such accretion and auction fabricated in the calm market. Such re-issuance will be in acceding of Adopted Barter Management (Transfer or Affair of Security by a Actuality Citizen Alfresco India) Regulations, 2000 as adapted from time to time and the guidelines issued in this regard. ]
(2) In case of accretion of the All-around Archive Receipts into basal shares, a appeal for the aforementioned will be transmitted by the Across Archive Coffer to the Calm Babysitter Coffer in India, with a archetype of the aforementioned actuality beatific to the arising aggregation for admonition and record.
(3) On redemption, the bulk of accretion of the shares basal the All-around Archive Receipts shall be reckoned as the bulk on the date on which the Across Archive Coffer admonish the Calm Babysitter Coffer for redemption. The bulk of the accustomed shares of the arising aggregation prevailing in the Bombay Banal Barter of the National Banal Barter on the date of the admonition of accretion shall be taken as the bulk of accretion of the basal accustomed shares.
(4) For the purpose of about-face of Adopted Bill Bonds, the bulk of accretion in the easily of the adopted broker would be the about-face bulk bent on the base of the bulk of the shares at the Bombay Banal Exchange, or the National Banal Exchange, on the date of about-face of Adopted Bill Convertible Bonds into shares.
8. Taxation of Adopted Bill Convertible Bonds
(1) Absorption payments on the bonds, until the about-face advantage is exercised, shall be accountable to answer of tax at antecedent at the bulk of ten per cent.
(2) Tax on allotment on the adapted allocation of the band shall be accountable to answer of tax at antecedent at the bulk of ten per cent,
(3) About-face of Adopted Bill Convertible Bonds into shares shall not accord acceleration to any basic assets accountable to income-tax in India.
(4) Transfers of Adopted Bill Convertible Bonds fabricated alfresco India by a non-resident broker to addition non-resident broker shall not accord acceleration to any basic assets accountable to tax in India.
9. Taxation on shares issued beneath All-around Archive Cancellation Mechanism
(1) Beneath the accoutrement of the Income-tax Act, assets by way of allotment on shares will be burdened at the bulk of 10 per cent. The arising aggregation shall alteration the allotment payments net afterwards deducting tax at antecedent to the Across Archive Bank.
(2) On cancellation of these payments of allotment afterwards taxation, the Across Archive Coffer shall administer them to the non-resident investors commensurable to their backing of All-around Archive Receipts evidencing the accordant shares. The holders of the archive receipts may booty acclaim of the tax deducted at antecedent on the base of the acceptance by the Across Archive Bank, if acceptable by the country of their residence.
(3) All affairs of trading of the All-around Archive Receipts alfresco India, amid non-resident investors, will be chargeless from any accountability to income-tax in India on basic assets therefrom.
(4) If any basic assets appear on the alteration of the aloft shares in India to the non-resident investor, he will be accountable to income-tax beneath the accoutrement of the Income-tax Act. If the aloft shares are captivated by the non-resident broker for a aeon of added than twelve months from the date of admonition of their accretion by the Across Archive Bank, the basic assets arising on the auction thereof will be advised as abiding basic assets and will be accountable to income-tax at the bulk of 10 per cent beneath the accoutrement of area 115AC of the Income-tax Act. If such shares are captivated for a aeon of beneath than twelve months from the date of accretion advise, the basic assets arising on the auction thereof will be advised as concise basic assets and will be accountable to tax at the accustomed ante of Income-tax applicative to nonresidents beneath the accoutrement of the Income-tax Act.
(5) Afterwards accretion of the Archive Receipts into basal shares, during the period, if any, during which these shares are captivated by the redeeming non-resident adopted broker who has paid for these shares in adopted barter at the time of acquirement of the All-around Archive Receipt, the bulk of taxation of assets by way of assets on these shares would abide to be at the bulk of 10 per cent, in accordance with area 115AC(1) of the Income-tax Act. The abiding basic assets on the auction of these adored basal shares captivated by non-resident investors in the calm bazaar shall additionally be answerable to tax at the bulk of 10 per cent, in accordance with the accoutrement of area 115AC(1).
(6) Back the adored shares are awash on the Indian Banal Exchanges adjoin acquittal in rupees, these shares shall go out of the ambit of the area 115AC of the Income-tax Act and assets accordingly shall not be acceptable for the concessional tax analysis provided thereunder. Afterwards the alteration of shares area application is in acceding for rupees payment, the accustomed tax ante would administer to the assets arising or accruing on these shares.
(7) Answer of tax at antecedent on the bulk of basic assets accruing on alteration of the shares would be fabricated in accordance with sections 195 and 196C of the Income-tax Act.
10. Application of abstention of bifold taxation acceding in case of All-around Archive Receipts
(1) During the aeon of fiduciary buying of shares in the easily of the Across Archive Bank, the accoutrement of Abstention of Bifold Taxation Acceding entered into by the Government of India with the country of abode of the Across Archive Coffer will be applicative in the bulk of taxation of assets from assets from basal shares and absorption on Adopted Bill Convertible Bonds.
(2) During the period, if any, back the adored basal shares are captivated by the non-resident broker on alteration from fiduciary buying of the Across Archive Bank, afore they are awash to citizen purchasers, the Abstention of Bifold Taxation Acceding entered into by the Government of India with the country of abode of the non-resident broker will be applicative in the bulk of taxation of assets from the assets from the said basal shares, or absorption on Adopted Bill Convertible Bonds, or any basic accretion arising out of alteration of basal shares.
11. Gift-tax and Wealth-tax
The captivation of the archive receipts in the easily of non-resident broker and the captivation of the basal shares by the Across Archive Coffer in a fiduciary accommodation and the alteration of the All-around Archive Receipts amid non-resident investors and the Across Archive Coffer shall be absolved from wealth-tax beneath the Wealth-tax Act, 1957 (27 of 1957), and from gift-tax beneath the Gift-tax Act, 1958 (18 of 1958).
Additional Admonition to be Filed by Companies Applying for Permission to Float All-around Issues
1. Name of the Aggregation and Address for Communication.2. Existing Business3. Profile on Project Expansion/Diversification Project with alienation requirements of Rupee and F.E. Components4. Existing Resources
Year catastrophe in March
Year catastrophe in March
Issued & paid-up Capital
(a) Banks & FIs.
Reserve & Surplus
(a) Accepted Reserve
(c.) Added Loans
(b) Development Rebate Reserve
(c) Advance Allowance Reserve
Deposits & Loans
(d) Basic Reserve
(e) Added Reserves
Current Liabilities Over Drafts from Banks and added concise Borrowings
5. Fixed Assets
I. (i). Gross Block(ii) Additions and Accretions during the year(iii) Depreciation(iv) Net Block
II. Work in Progress
Year catastrophe in March
6. (i) Sales and added income(ii) Operating Expenses(iii) Absorption on Loans(iv) Profit afore Depreciation(v) Depreciation(vi) Profit Afore tax(vii) Provision for Taxation(viii) Profit Afore Appropriations(ix) Allotment and added appropriations(x) Profit Transferred to Accepted Reserves
7. Accommodation and Utilisation
Installed Accommodation P.A.
Production during the year
Capacity Utilisation Percentage
Year catastrophe in March
8. Banking Results and Management Ratios
(i) Net Worth(ii) Basic employed(iii) Basic about-face Ratio(iv) Equity-Debt Arrangement (long-term)(v) Profitability
(a) Profit margin
Net Profit……………………… x 100 = %ageIncome
(b) Return on equity
Net Profit……………. x 100 = %ageEquity
(c) Return on Net Worth
Net Profit………………….. x 100 = %ageNet Worth
(d) Return on Total Investment
Net Profit………………….. x 100 = %ageTotal Investment
(e) Return on Total Basic employed
Net Profit…………………… x 100 = %ageResources
(vi) Liquidity Ratio
Current arrangement = Current Assets / Current Liabilities
(vii) Revenue per artisan for the year
Income / Total Employment
9. Statutory Liabilities
(Disputed and otherwise) and Defaults
10. Defaults in account of interest/instalments to Loans from Banks/ Banking Institutions
11. Exports and Imports
(a) Chargeless on lath bulk Export(b) Exported to (Countries)(c) Imports
(i) Basic Equipment(ii) Materials, Components Consumables
(d) Added Adopted Bill Expenditure(e) Adopted Debt Liabilities
12. Salient appearance of the -to-be accumulated affairs and about-face proposals with appropriate advertence to adopted barter requirements.
Format of Approval for Finalising the Affair Structure
F. No. Government of IndiaMinistry of Finance, Department of Economic Affairs(Investment Division)New Delhi
Subject: Your Application for a GDR/ADR/IDR affair for an bulk of…………….
Dear Sir,I am directed to accredit to your Letter No…………….. dated………… on the accountable mentioned aloft and to back Government of India’s approval ‘in principle’ to the mobilisation of adopted bill assets agnate to………. through affair of GDR/ADR/IDRs to awning the Adopted Bill needs for your………… projects and added accompanying accumulated needs.
2. The approval is accountable to the compassionate that the adopted bill assets aloft through the proposed affair should be mandatorily remitted to India anon afterwards the issue.
3. This approval is accurate for a aeon of six months from the date of affair of this letter.
4. You are now requested to finalise the abundant ambit of the proposed GDR/ADR/IDRs alms for application and final approval by the Government of India.
Yours faithfully,()Director (Foreign Investments)Tel:
Indicative items of final approval for Adopted Bill Convertible Band Issues
Optional Accretion by Issuer (Call)
Optional Accretion by Broker (Put)
Co. Lead Manager(s)
Form and Denomination Status
Cross Default Provisions
Negative Pledge Provisions
Issue bulk (and premium, if any)
Coupon (and acquittal dates)
Listing of Bonds
Indicative items in the final approval for Euro-Equity Issues through GDR Mechanism
Underlying Shares Listing
Co, Lead Lead Manager(s)Overseas Archive InstitutionIndian Custodian
Standstill aeon (No added disinterestedness shares, or interests bigotry shares, for a defined time aeon from thedate of issue)
Issue Anatomy and Denomination (No. of underlyingshares represented by the GDRs).
Issue Bulk (Principal amount)
Trading provisionSettlement provisionsSelling Commission
Greenshoe Advantage (Additional bulk in %age termswhich may be retained if offered)
Warrants attached, if any
Underwriting Commission and Management Fees
Legal Expenses, Printing Expenses, Archive Fees, andother out of abridged expenses.
Currency of issue
1. Inserted by the Affair of Adopted Bill Convertible Bonds and Accustomed Shares (through Archive Cancellation Mechanism) (Amendment) Scheme, 1999
2. Inserted by the Adopted Bill Convertible Bonds and Accustomed Shares (through Archive Cancellation Mechanism) (Amendment) Arrangement 2000 with aftereffect from 16 June 2000.
3. Inserted by the Adopted Bill Convertible Bonds and Accustomed Shares (through Archive Cancellation Mechanism) (Amendment) Arrangement 2001, vide Notification No. GSR 687(E), anachronous 8 September 2001 with aftereffect from 15 September 2000.
4. Inserted vide Government Press Release anachronous 13 February 2002, with attendant aftereffect from 23 March 2001.
5. Inserted vide Press Note F.No.15/4/2004-NRI anachronous August 31, 2005 issued by the Government of India, Ministry of Finance and the Government Notification anachronous August 31, 2005.
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