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CHECKLIST FOR PREFERENTIAL ALLOTMENT OF SHARES UNDER

SECTION 62 OF THE COMPANIES ACT 2013

Procedure for Issue of shares to any persons other than existing equity shareholders
U/S 62 (1) ( c ) ( taking into account procedure u/s 42 also ) :
1) Prepare a list of persons ( not exceeding 200 in a financial year for each kind of security ) to
whom offer may be made.
2) Ensure that no allotment against any previous offer / invitation of any kind of security is
pending issue to be authorized by AOA.
3) Issue to be authorized by AOA.
4) Pass special resolution for such issue.
5) Explanatory Statement to contain justification for price and premium, if any and also other
matters as prescribed by the rules.
6) Valuation report of registered valuer / independent merchant banker / independent CA for
price calculation.
7) Only fully paid securities can be issued.
8) Issue an offer letter in form PAS 4. ( If the shares are issed to existing members, Pass 4
need not sent )
9) Requirements of Offer letter :
(a) To be accompanied by serially numbered application form.
(b) Addressed specifically to the person to whom offer is being made
(c) Sent to only such person in writing / electronically
(d) Within 30 days of recording names in the list
(e) No person other than the addressee allowed to apply through application form
(f) Value of offer / invitation per person not less than Rs.20,000/-of face value of the
Security
(g) To also comply with requirement of contents of notice about renunciation etc..
10) Maintain record record of offer letters in PAS 5. ( If the shares are issed to existing
members, Pass 5 is not applicable )
11) File offer letter with ROC alnog with record of offer letters in PAS - 6 within 30 days of
circulation of offer letter. ( If the shares are issed to existing members, Pass 6 is not applicable )

12) Amount against offer to be received only by cheque / demand draft / other banking
channels but not by cash only from the bank account of the subscriber.
13) Company to maintain record of the bank account from which payments received.
14) In case of joint holders, payment was received from first applicant only.
15) Allotment was completed within 12months from the date of passing of special resolution. If
not, another special resolution was passed to complete allotment.
16) Where Convirtible securities are offered, price of resultant shares shall be determined
beforehand on the basis valuation report.
17) Board resolution to specifically contain authority for issuance of share certificates by any
two directors and out of which one should be director other than MD / WTD.
18) Share application money was kept in separate bank account AND was utilized only for
a) adjustment against allotment ;
b) Repayment .
19) Return of allotment in form PAS -3 within 30 days.
20) Share Certificates to be issued within 2 months of allotment / 6 months of allotment of
debentures.
21) Entry in Register of Members.
22) In case of consideration other than cash, accounting treatment as specified in Rules, was
complied.