Disclosures to shareholders in the statement annexed to special resolution
As per regulation 3(1) of the 2017 regulations, the company shall disclose following information in the statement annexed to the notice, pursuant toof the , of a general meeting called for considering investment decision under of the Act.
(A) Regarding associated company or associated undertaking: -
- name of associated company or associated undertaking;
- basis of relationship;
- earnings per share for the last three years;
- break-up value per share, based on latest audited financial statements;
- financial position, including main items of statement of financial position and profit and loss account on the basis of its latest financial statements; and
- in case of investment in relation to a project of associated company or associated undertaking that has not commenced operations, following further information, namely, -
(I) description of the project and its history since conceptualization;
(II) starting date and expected date of completion of work;
(III) time by which such project shall become commercially operational;
(IV) expected time by which the project shall start paying return on investment; and
(V) funds invested or to be invested by the promoters, sponsors, associated company or associated undertaking distinguishing between cash and non-cash amounts;
(B) General disclosures: -
- maximum amount of investment to be made;
- purpose, benefits likely to accrue to the investing company and its members from such investment and period of investment;
- sources of funds to be utilized for investment and where the investment is intended to be made using borrowed funds,-
(I) justification for investment through borrowings;
(II) detail of collateral, guarantees provided and assets pledged for obtaining such funds; and
(III) cost benefit analysis;
- salient features of the agreement(s), if any, with associated company or associated undertaking with regards to the proposed investment;
- direct or indirect interest of directors, sponsors, majority shareholders and their relatives, if any, in the associated company or associated undertaking or the transaction under consideration;
- in case any investment in associated company or associated undertaking has already been made, the performance review of such investment including complete information/justification for any impairment or write offs; and
- any other important details necessary for the members to understand the transaction;
As per, the special resolution should indicate nature, period of investment, amount, and its terms and conditions.
As per regulations of 2017 called, the statement annexed with the notice of special resolution sent to the members with the notice of AGM / EOGM, the company shall disclose various information in the statement annexed to the notice, pursuant to of the Act, of a general meeting called for considering investment decision under section 199 of the Act.
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