Correspondence Regarding Bonus Shares and Rights Shares

5. Correspondence Regarding Bonus Shares and Rights Shares

Bonus shares [Section 63, Companies Act, 2013]: a company with sufficient accumulated profits may capitalise part of its free reserves, securities premium account, or capital redemption reserve by issuing fully paid-up bonus shares to its existing members, free of any further payment, in proportion to their existing holding (for example, 1 bonus share for every 2 shares held). Bonus shares can never be issued out of a reserve created by revaluation of assets, and never in lieu of a dividend the company owes. Once the Board (and, if required, the members) approve a bonus issue, the Secretary writes to every member intimating the ratio of the bonus issue, the number of additional shares credited to their account, and the record date used to determine entitlement.

Rights shares [Section 62(1)(a), Companies Act, 2013]: when a company (already in existence for some time) wishes to raise further share capital, the law gives existing equity shareholders the first right to subscribe to the new shares, in proportion to their existing holding, before the shares can be offered to outsiders — this is a rights issue. The offer letter must be given not less than 15 days and not more than 30 days before the offer closes, and must state that the right is renounceable — that is, a member who does not wish to subscribe may renounce the offer (wholly or in part) in favour of another person.

Specimen letter intimating a bonus issue:

SAHYADRI TEXTILES LIMITED
Regd. Office: 88, Shivaji Nagar, Kolhapur - 416 003
CIN: L17110MH2010PLC201456

Ref. No. STL/CS/2025-26/301                                    Date: 3rd December, 2025

To,
Mr. Suresh N. Patil
Folio No. STL-06214
204, Ashirwad Apartments, Rajarampuri,
Kolhapur - 416 008

Dear Sir,

Sub: Allotment of Bonus Shares

We are pleased to inform you that the Board of Directors, at its meeting held on 25th November, 2025, has approved a Bonus Issue of Equity Shares in the ratio of 1 (One) new fully paid-up Equity Share of Rs. 10 each for every 2 (Two) existing Equity Shares held, by capitalisation of the Company's free reserves, to members whose names appeared in the Register of Members as on the record date of 28th November, 2025.

Accordingly, 200 new Equity Shares have been allotted and credited to your demat account against your existing holding of 400 shares. No payment is required from you for these shares.

Yours faithfully,
For Sahyadri Textiles Limited

(Sd.)
Meenal R. Sawant
Company Secretary

Specimen letter offering rights shares:

SAHYADRI TEXTILES LIMITED
Regd. Office: 88, Shivaji Nagar, Kolhapur - 416 003
CIN: L17110MH2010PLC201456

Ref. No. STL/CS/2025-26/342                                    Date: 10th February, 2026

To,
Mr. Suresh N. Patil
Folio No. STL-06214
204, Ashirwad Apartments, Rajarampuri,
Kolhapur - 416 008

Dear Sir,

Sub: Offer of Rights Equity Shares …