N. ARCHANA SASTRY

1. Scheme of Arrangement under the Companies Act, 1956 –Revised requirements for the Stock Exchanges and Listed Companies N. ARCHANA SASTRY

2. STOCK EXCHANGE & SEBI VIS-À-VIS - CHANGES INTRODUCED IN THE EXISTING PROCEDURES • APPLICABILITY • TWO CONCEPTS : • SUBMISSION OF DRAFT SCHEME BY LISTED COMPANIES AND • SUBMISSION OF SANCTIONED SCHEME BY UNLISTED AND LISTED COMPANIES • DISPLAY IN WEBSITE • CHANGES IN INTERNAL PROCEDURES OF COMPANY • COURT PROCESS • DESIGNATED STOCK EXCHANGE • APPROVAL OF SHAREHOLDERS • INVESTOR COMPLAINTS

3. APPLICABILITY • To all listed companies, who have submitted Scheme to Stock Exchange, but are yet to receive No Objection Letter, as on date of Circular. • To all listed companies, who have obtained No Objection Letter from Stock Exchange but have not yet submitted to Hon’ble High Court, as on date of Circular.

4. Requirements for Listed Companies While Submitting Draft Scheme of Arrangement For obtaining relaxation under Rule19(2)(b) of Securities Contract (Regulation) Rules, 1957, following conditions have to be met: • Allotment of Equity Shares is pursuant to Scheme . • At least twenty five per cent of the post-scheme paid up share capital - allotted to the public shareholders in the transferor entity; • The transferee entity will not issue/ reissue any shares, not covered under the Draft Scheme; • Outstanding warrants/ instruments/ agreements on Equity Shares of Transferee Entity • Lock – in CONTD….. CONTD…..

5. Requirements for Listed Companies While Submitting Draft Scheme of Arrangement contd.. The listed company shall submit the following documents to the Stock Exchanges In addition to existing documents under 24(f): • Report from the Audit Committee recommending the Draft Scheme, taking into consideration, inter alia, the Valuation Report as stated • Fairness opinion by merchant banker;    • Audited financials of last 3 years (financials not being more than 6 months old) of unlisted company; •  Compliance with Clause 49 of Listing Agreement; and •  Complaints Report

6. Changes In Internal Procedures of The Company • AUDIT COMMITTEE MEETING - taking into consideration the Valuation Report. Report of Audit Committee has to be submitted to SE while submitting Draft Scheme. • REDRESSAL OF INVESTOR COMPLAINTS – prior to giving paper publications and notice of meeting of shareholders.

7. DISPLAYON WEBSITE • STOCK EXCHANGE WEBSITE – a) The stock exchanges where the specified securities are listed / proposed to be listed shall also disclose on their websites the Draft Scheme and documents immediately on receipt. b) It shall also disclose the Observation Letter on its website immediately upon issuance. • COMPANY WEBSITE – a) Immediately upon filing of the Draft Scheme with the stock exchanges, the listed company shall disclose the Draft Scheme and all the documents mentioned in SEBI Circular on its website. b) It shall also disclose the Observation Letter of the stock exchanges on its website within 24 hours of receiving the same.

8. COMPLAINTS REPORT • All complaints received by SEBI, Stock Exchange, Company from various sources - upto 21 days of filing of Draft Scheme and hosting on website, will be forwarded to Company. • Company has to resolve the same. • Within 7 days after Completion of 21 days, it has to File a “COMPLAINTS REPORT “ TO STOCK EXCHANGE. • The stock exchanges shall thereafter submit the ‘Complaints Report’ to SEBI. • The Complaints report will be considered for issuing “ Comments Report” of SEBI to SE and also for issue of “ OBSERVATION LETTER” by SE.

9. COURT PROCESS • Only after receipt of “OBSERVATION LETTER” from SE, the Company can apply to Court

10. APPROVAL OF SHAREHOLDERS • Section 391-394: Majority in number representing ¾th in Value. (Simple in majority, Special in Value) • As per SEBI Circular: • POSTAL BALLOT AND EVOTING • SPECIAL RESOLUTION • Votes classified into public and promoter group • Special resolution shall be acted upon only if the votes cast by public shareholders in favor of the proposed scheme, should amount to at least two times the number of votes cast by public shareholders against it. • WHETHER CHAIRMAN APPOINTED BY COURT WILL BE SCRUTINIZER - ?

11. ROLE OF SEBI • PRIOR APPROVAL OF SCHEME • Issue of comments based on “ NO OBJECTION LETTER” of Stock Exchange • It may • Seek for clarifications from Company, • And also opinion from Independent Chartered Accountant, if sought by SEBI • Issue of “ Comments” on draft Scheme. • SE will issue observation letter after receipt of comments from SEBI   • POST APPROVAL OF SCHEME • The designated stock exchange shall forward its recommendations to SEBI on the documents submitted by the listed company. • SEBI shall endeavor to offer its comments/approval, wherever applicable, to the designated stock exchange in 30 days.

12. Requirements for Stock Exchanges/Listed companies while Submitting Scheme Sanctioned by the Hon’ble High Court (PART B) • Unlisted issuer’s requirements- if claiming exemption under rule 19(2)(b) of Securities Contract Regulation Rules, 1957. • Listed Issuer’s requirements • Hiving off/its merger with a newly formed or existing unlisted issuer • Listing of its equity shares, within thirty days of the receipt of the order. • Formalities for commencing of trading shall be completed within forty five days of the order.

13. TIME LINES

14. Listing of Equity Shares with Differential RightsWarrants Offered Along With Non Convertible Debentures • PART C • Application by a Listed Issuer for Listing of Equity Shares with Differential Rights as to Dividend, Voting or Otherwise. • PART D • Application by a Listed Issuer for Listing of Warrants Offered Along With Non Convertible Debentures (NCDs)

15. QUERIES AND DISCUSSIONS • Related to Circular: • Special Resolution, Postal ballot and e-voting? • Role of Court appointed Chairman in Scrutiny? • Approval of SEBI, after sanction of Scheme by High Court? • Designated Stock Exchange? • Other Issues? ********************

16. QUERIES AND DISCUSSIONS Thank You !