GDR- Section 41 of the Indian Companies Act 2013
This Section must be read along with the following rules:
1. Companies ( issue of global depository receipts) rules 2014
2. Foreign Exchange management rules and regulations
This Section allows a company (which is eligible) to issue GDR's in any foreign country.
The first thing which a company must remember is the eligibility according to the above stated rules is necessary. the company must comply with the the FEMA rules for issuing Global Depository receipts.
ISSUING METHODS:
The Depository receipts can be issued by the company in either of the following manner:
1. public offering : invitation to public to opt. for GDR's.
2. Private placement: placement on its own wish either to another company or an individual.
CONDITIONS NECESSARY:
1. company must pass a special resolution ( votes cast in favor must not be less than 3 times of the votes cast against) at its general meeting.
2. GDR's shall be issued by an overseas bank which is appointed by the company.
3. The underlying shares( if any) shall be kept in the custody of a domestic custodian bank.
4. The company shall appoint a merchant banker or a practising chartered accountant/ practising cost accountant/ practising companies secretary to oversee all the compliance relating to issue of GDR's.
5. To make a compliance report.
This Section must be read along with the following rules:
1. Companies ( issue of global depository receipts) rules 2014
2. Foreign Exchange management rules and regulations
This Section allows a company (which is eligible) to issue GDR's in any foreign country.
The first thing which a company must remember is the eligibility according to the above stated rules is necessary. the company must comply with the the FEMA rules for issuing Global Depository receipts.
ISSUING METHODS:
The Depository receipts can be issued by the company in either of the following manner:
1. public offering : invitation to public to opt. for GDR's.
2. Private placement: placement on its own wish either to another company or an individual.
CONDITIONS NECESSARY:
1. company must pass a special resolution ( votes cast in favor must not be less than 3 times of the votes cast against) at its general meeting.
2. GDR's shall be issued by an overseas bank which is appointed by the company.
3. The underlying shares( if any) shall be kept in the custody of a domestic custodian bank.
4. The company shall appoint a merchant banker or a practising chartered accountant/ practising cost accountant/ practising companies secretary to oversee all the compliance relating to issue of GDR's.
5. To make a compliance report.
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