23 August 2012
can someone please provide the draft resolutions for private placement of preference shares by a private limited company. also a draft term sheet for issue of preference shares. kindly let me know if any other additional document is also prepared for this purpose?
23 August 2012
“RESOLVED THAT in terms of section 81(1A) and all other applicable provisions, if, any, of the Companies Act 1956 (the Act) (including any statutory modification(s) or re-enactment thereof, for the time being in force), Unlisted Public Companies (Preferential Allotment) Rules, 2003, Memorandum and Articles of Association of the Company, and subject to such conditions and modifications as may be considered appropriate by the Board of directors of the Company, consent of the Company be and is hereby accorded to the Board to offer, issue and allot 4,50,000 shares of Rs. 10 each at a premium of Rs. 5 per share to the promoters, directors, their relatives and their associates on preferential basis.â€
“RESOLVED FURTHER THAT the Board of directors be and is hereby instructed to get the shares allotted pursuant to this resolution and the resolution be acted upon within a period of 12 months.â€
Explanatory Statement
In terms of the provisions of section 81(1A) of the Companies Act, 1956 read with the Unlisted Public Companies (Preferential Allotment) Rules, 2003 applicable for making of a preferential offer a special resolution has to be passed.
The Company proposes to increase its capital base for the working capital requirements and long term financial sources for the Company by way of private placement of shares to the selective groups of the promoters, directors, relatives and their associates, whether they are the existing members of the Company or not.
In view of the requirements of section 81(1A) of the Companies Act, 1956 and the above said rules made thereunder, the Company has to seek approval of members at the general meeting by way of special resolution which will be valid for a period of 12 months from the date of passing thereof.
The Company submit the following information for taking appropriate decision for approval of the proposed resolution as set out in the Item No… of the notice of the meeting by way of special resolution:
(a) the price band at which allotment is proposed : Rs.10 each at a premium of Rs. 5 per share.
(b) the relevant date on the basis of which price has been arrived at: Since the Company does not propose for issuance of share warrants, it does not apply.
The Board of directors at their meeting held on 10th December, 2005 have considered the issue price at a premium of Rs. 5 per share and looking into the market sentiments and experience of the management, the price has been considered appropriate in the interest of the Company.
(a) the object of the issue: To raise the funds through preferential offer for working capital and long term financial needs of the Company from the directors, promoters, relatives and associates on private placement basis.
(b) the class or classes of persons to whom the allotment is proposed to be made: Promoters, Directors their relatives which includes the existing shareholders on private placement basis as may be determined by the Board of directors of the Company from time to time within the validity period of the resolution.
(c) intention of promoters/directors/key management persons to subscribe to the offer: Yes, the promoters, directors and their relatives also intend to participate in the proposed preferential issue of shares.
(d) shareholding pattern of promoters and other classes of shares before and after the offer: The Company's existing shareholding pattern is as under:
Category
Pre Issue
Post Issue
No. of shares
% age
No. of shares
% age
Directors/Promoters and their relatives
28200
56.40
4,00,000
80.00
NRIs/OCBs
0
0.00
0
0.00
Banks & Financial Institutions
0
0.00
0
0.00
Mutual Funds
0
0.00
0
0.00
Government
0
0.00
0
0.00
General Public
0
0.00
0
0.00
Body corporate
21800
43.60
1,00,000
20.00
TOTAL
50,000
100.00
5,00,000
100.00
Assuming that all the proposed investors will subscribe in the proposed offer.
(e) proposed time within which the allotment shall be completed: 4th January, 2007, i.e. within a period of one year from the date of approval of the resolution.
(f) whether a change in control is intended or expected in the affairs of the Company: The directors do not envisage any change in the control of the management by the proposed allotment of shares.
A certificate from the statutory auditors of the company certifying that the issue of the shares is being made in terms of the Unlisted Public Companies (Preferential Allotment) Rules, 2003, and shareholding pattern of the promoters and others have been kept at the Registered Office for inspection.
In order to authorise the Board for taking further action, it is necessary to pass the said special resolution for preferential issue of shares as set out in Item No.... of the notice.
None of the directors of the company is concerned or interested in the proposed resolution except, to the extent they subscribe for the issuance of shares under the preferential allotment in terms of the above said resolution.
CAclubindia
