Board of directors of Mega Ltd. an unlisted company has decided to move ahead for preferential offer of equity shares. In this connection the Managing Director wants to know: In a situation where convertible securities a

Where convertible securities are offered on a preferential basis with an option to apply for and get equity shares allotted, the price of the resultant shares pursuant to conversion shall be determined- either upfront at the time when the offer of convertible securities is made, on the basis of the valuation report of the registered valuer given at the stage of such offer; or at the time, which shall not be earlier than thirty days to the date when the holder of convertible security becomes entitled to apply for shares, on the basis of the valuation report of the registered valuer given not earlier than sixty days of the date when the holder of convertible security becomes entitled to apply for shares. The company should take a decision on basis of above (a) or (b) at the time of the offer of convertible securities itself and make such disclosure in an explanatory statement.