Meeting of Buy Back of Shares

BUY BACK OF SHARES

PROCEDURE FOR BUY BACK OF SHARES:

UNLISTED PUBLIC COMPANY / PRIVATE COMPANY

Convene board Meeting to discuss following business:
Discuss proposal for buyback
Place before Board Declaration of solvency and Valuation report for its approval.

If shares to be bought back are less than 10%

Yes: Then pass the resolution of buyback of the shares in same Board Meeting and File Form MGT 14 within 30 days of BM and go to step 3.

No: Then pass resolution to call an AGM/EGM for the purpose of passing special resolution for buy back of the shares.

Note: We can convene One EGM for Alteration of Capital and Authority to Buy Back Shares.

Convened AGM / EGM:
Company should convene the general meeting for passing special resolution Notice of the meeting should contain Explanatory Statement, which gives the details as required under Sections 68 of the Companies Act, 2013. In the meeting members should pass special resolutions for sanctioning the buyback of the shares within a year of the passing of the special resolution.
File Form MGT -14 within 30 days of AGM / EGM.

Draft Letter of Offer:

Prepare letter of offer as on date of AGM/EGM/BM.
Before the Buy Back of shares the Company shall file with ROC a letter of offer in Form No. SH 8.
Letter of offer shall be dated and signed on behalf of the Board of Directors of the Company by not less than 2 directors of the Company one of whom shall be the Managing Director, where there is one.
Dispatch a letter of offer to the security holders only after 21 days from submission of the draft letter of offer to Registrar of Companies and it should be reached at the security holders before the issue open.

Filing Declaration of Solvency:

The company shall file with the Registrar, along with the letter of offer a declaration of solvency in Form No. SH.9 which need to be signed by at least two directors of the company, one of whom shall be the managing director, if any, and verified by an affidavit as specified in the said Form.

Report from the Auditors:

The company to obtain a certificate from the auditors. A report addressed to the Board of Directors by the Company’s auditors stating that they have inquired into the company’s state of affairs; the amount of the permissible capital payment for the securities in question is in their view properly determined; that the audited accounts on the basis of which calculation with reference to buy back is done is not more than six months old from the date of offer document; and the Board of directors have formed the opinion as specified above on reasonable grounds and that the company, having regard to its state of affairs, shall not be rendered insolvent within a period of one year from that date.

Offer Period:

The offer for buy-back shall remain open for a period of not less than fifteen days and not exceeding thirty days from the date of dispatch of the letter of offer.

(If so consented by the members, it can be open for less than 15 days)

Bank Account :

The company shall immediately after the date of closure of the offer, open a separate bank account and deposit therein, such sum, as would make up the entire sum due and payable as consideration for the shares tendered for buy-back in terms of these rules.

Verification of Offer received:

The company shall complete the verifications of the offers received within 15 days from the date of closure of the offer and the shares or other securities lodged shall be deemed to be accepted unless a communication of rejection is made within 21 days from the date of closure of the offer.

Buy Back on proportional basis:

In case the number of shares or other specified securities offered by the shareholders or security holders is more than the total number of shares or securities to be bought back by the company, the acceptance per shareholder shall be on proportionate basis out of the total shares offered for being bought back.

Payments / return of Share Certificate:

The company shall within seven days of the time specified in point no. 9 above –

(a) Make payment of consideration in cash to those shareholders or security holders whose securities have been accepted; or

(b) Return the share certificates to the shareholders or security holders whose securities have not been accepted at all or the balance of securities in case of part acceptance.

(c) Where buyback is effected by free reserves, sum equivalent to the Nominal Value of the shares bought back shall be transferred to Capital Redemption Reserve (CRR) & such transfer to be disclosed in Balance Sheet.

Certificate for Extinguishments Share Certificate:

The company should within 7 days from the Completion of Buy – Back extinguishes all share certificate related to shares which are bought–back. The Company should get certificate in Form No. SH. 15 signed by two directors of the company including the Managing Director if any and verified by Practicing Company Secretaries certifying that the Buy Back of Securities has been made in compliance with the provisions of the Act and the rules made there.

Return of Buy Back:

The company, after the completion of the buy-back under these rules, shall file with the Registrar, a return in the Form No. SH.11, annex Form No. SH 15 to the said return.

Register of Shares / Securities Bought back:

The company shall maintain a register of shares or other securities which have been bought-back in Form No. SH.10.
The register of shares or securities bought-back shall be maintained at the registered office of the company and shall be kept in the custody of the secretary of the company or any other person authorized by the board in this behalf.
The entries in the register shall be authenticated by the secretary of the company or by any other person authorized by the Board for the purpose.

Company’s Obligation:

The company shall ensure that—

the letter of offer shall contain true, factual and material information and shall not contain any misleading information and must state that the directors of the company accept the responsibility for the information contained in such document;
the company shall not issue any new shares including by way of bonus shares within 6 months from the date of passing of special resolution / Board Resolution authorizing the buy-back under these rules, except those arising out of any outstanding convertible instruments;
the company shall confirm in its offer the opening of a separate bank account adequately funded for this purpose and to pay the consideration only by way of cash;
the company shall not withdraw the offer once it has announced the offer to the shareholders;
the company shall not utilize any money borrowed from banks or financial institutions for the purpose of buying back its shares; and
the company shall not utilize the proceeds of an earlier issue of the same kind of shares or same kind of other specified securities for the buy-back

LISTED COMPANY

There are three options available as mentioned below to listed company to Buy Back its own Share.

From Existing Shareholders on proportionate basis through tender offer.
From Open Market through:
i) Book Building Process
ii) Stock Exchange
From odd lot traders

Provided that no offer of buy-back for fifteen per cent or more of the paid up capital

and free reserves of the company shall be made from the open market.

BUY – BACK OF SHARES FROM THROUGH TENDER OFFER\ ODD LOT BUY – BACK FROM EXISTING SHAREHOLDERS OF THE COMPANY.

A company may buy-back its shares or other specified securities from its existing security-holders on a proportionate basis in accordance of the following provisions.

Provided that fifteen percent of the number of securities which the company proposes to buy back or number of securities entitled as per their shareholding, whichever is higher, shall be reserved for small shareholders

Convene and hold a Board Meeting
Convene and hold a Board Meeting after giving notice to all the directorsto discuss besides others the following matters

To pass a resolution for buy-back of shares and also decide the price at which the company offers to the shareholders. (Section 68 of the Companies Act, 2013)
To appoint a Compliance officer for ensuring compliance of the provisions of the Act, the Regulations, listing Agreement and any other applicable laws relating to Buy-back of securities and to redress the grievances of the investors
To Appoint Merchant Banker who will take care of the whole proceeding
To decide the location about the investor service center, it is desirable that such centers are opened in all such cities where the security holders holding 10% or more of the voting rights reside.
To approve the notice & Explanatory Statement of EGM to pass special resolution for Buy Back of shares to be sent to the shareholders (If Buy Back Exceed 10 % Equity Shares upto 25 % Equity Shares)

Explanatory Statement should include

Maximum price at which the buy-back of Shares shall be made and whether the Board of Directors of the company are being authorised at the general meeting to determine subsequently the specific price at which the buy-back may be made at the appropriate time.
if the promoter intends to offer their shares

the quantum of shares proposed to be tendered
the details of their transactions and their holdings for the last six months prior to the passing of the special resolution for buy-back including information of number of shares acquired, the price and the date of acquisition

To fix the responsibility of the entire postal ballot process to the Company Secretary and any functional director of the Company
To approve the postal ballot form along with the calendar of event.
To appoint a scrutinizer, not being an employee, who is in the opinion of the Board of directors, can conduct the postal ballot voting process in a fair and transparent manner

Inform the Stock Exchange with which shares of the company are listed about the date of this meeting prior to the board meeting.

Inform the said Stock Exchange within 30 minutes of the board Meeting, of the outcome of the meeting in electronic form. .

File Board resolution inForm MGT 14 with the Registrar of Companies within 30 days of the Board resolution.

Whether Buy Back Exceed 10%: Yes — go to Step 2

No— go to Step 4

Note: We can convene One EGM for Alteration of Capital and Authority to Buy Back Shares.

Convene and hold a EGM
Hold and convene the General Meeting and pass the Special resolution for Buy-Back of shares File a certified true copy of thespecial resolution in MGT 14 with the concerned Registrar of Companies within 30 days of the date of passing of the resolution
Forward to the Stock Exchange promptly three copies of the notice and a copy of the proceedings of the General Meeting.
Postal Ballot

As per provision of Section 110 of the Companies Act, 2013 and rules applicable for the same resolution for Buy Back of shares needs to be passed through Postal Ballot.

Notice of postal ballot should contain the draft resolution along with its explanation, requesting the shareholder to send their assent or dissent within 30 days of postage of notice.
Notice shall contain a pre-paid envelope, for the shareholders to give their reply.

Notice should be send by either Registered Post or speed post, or through electronic means like registered e-mail id or through courier service .

File copy of postal ballot notice to the SEBI within 2 days from date of Notice.
Advertisement in one English and vernacular language newspaper.
Scrutinizer shall submit his report as soon as possible, after the last date of receipt of postal ballots but not later than Seven Days thereof.

The Scrutinizer shall maintain a register to record the consent, along with all other details.
Ballot papers to be kept in safe custody of Scrutinizer, till the Chairman, considers, approves and signs the minutes of the meeting.

The results shall be declared by placing it, along with the scrutinizer’s report, on wet site of the Company.
Forward to the Stock Exchange promptly three copies of the notice of postal ballot.
Report from the Auditors:

Public Announcement
After it has been authorised to buy-back by passing resolution through postal Ballot, make a Public announcement at least 2 days before the commencement of buy-back at least one English, one Hindi and Regional language Newspaper.
Such public announcement shall contain the disclosures regarding detail of the Stock-Brokers and Stock Exchange(s) through which the buy-back of securities will be made.
A copy of the Public announcement shall be filed with SEBI along with fees specified inSchedule IV to the Regulation.

Draft Letter of Offer:
A drat letter of offer, along with fees prescribed inScheduleIV to the Regulations, shall be filed with the SEBI through a merchant banker, within 5 days of the Public Announcement
The draft letter of offer shall include the particulars specified in Schedule III to the Regulations.

Declaration of Solvency:

A declaration of solvency in Form No. SH.9 shall be filed with SEBI along with the draft letter of offer before dispatch of Letter of offer. It is also to be filed with Registrar of Companies simultaneously.

Offer Period:

Decide the date of opening of the offer, it should not be earlier than 5days from the date of dispatch of letter of offer.. The offer should be opened for a period of 10 working days.

Escrow Account:

Open an Escrow account with a Scheduled Commercial Bank on or before the opening of the offer and deposit therein a specified amount as and by way of security. It is 25% of the consideration payable in case the consideration does not exceed Rs. 100 crores and in case the consideration is more than Rs. 100 crores, it is 25% of Rs. 100 crores and 10% of the balance of the consideration payable.

In case the shares tendered in dematerialized mode, the company require opening a Special Depository Account through the Registrar to the Offer.
Open a Special Bank Account with the Banker to the Issue. This account should be opened immediately after the date of closure of the offer and deposit the whole consideration including lying in the escrow account.
Escrow account shall consist of:
Cash Deposits
bank guarantee in favour of the merchant banker
deposit of acceptable securities with appropriate margin, with the merchant banker
Combination of any of the above.

Verification of Offer received:

The company shall complete the verifications of the offers received within 7 days from the date of closure of the offer.

Payment:

The payment should be made within 7 days from the date of completion of verification of offer.

Certificate for Extinguishments Share Certificate:

The company should within 15 days from date of acceptance of the shares or other securities extinguishes all share certificate related to shares which are buy–back in presence of the Merchant Banker and Statutory Auditor or within 7 days of the last date of completion of buy back. The Company should get certificate in Form No. SH 15 verified by Registrar to the issue/ Merchant Banker and Statutory Auditors Practicing Company Secretaries of the Company and two directors of the company including the Managing Director if any certifying that the Buy Back of Securities has been made in compliance with the provisions of the Act and the rules made there.

Furnish a certificate to SEBI and the Stock Exchange(s) within 7 days of extinguishments and destruction of the certificates.

Return of Buy Back :

The company, after the completion of the buy-back under these rules, shall file with the Registrar, a return in the Form No. SH.11.

Register of Shares / Securities Bought back:

The company shall maintain a register of shares or other securities which have been bought-back in Form No. SH.10.
The register of shares or securities bought-back shall be maintained at the registered office of the company and shall be kept in the custody of the secretary of the company or any other person authorized by the board in this behalf.
The entries in the register shall be authenticated by the secretary of the company or by any other person authorized by the Board for the purpose.

Odd-lot Buy-back:

The provisions pertaining to buy-back through tender offer as specified in this

Chapter shall be applicable mutatis mutandis to odd-lot [shares or other specified

securities].

BUY – BACK OF SHARES THROUGH STOCK EXCHANGE FROM EXISITNG SHAREHOLDER.

Convene and hold a Board Meeting
Convene and hold a Board Meeting after giving notice to all the directorsto discuss besides others the following matters

To pass a resolution for buy-back of shares and also decide the price at which the company offers shares to the shareholders.( Section 68 of the Companies Act, 2013)
To appoint a Compliance officer for ensuring compliance of the provisions of the Act, the Regulations, listing Agreement and any other applicable laws relating to Buy-back of securities and to redress the grievances of the investors
To Appoint Merchant Banker who will take care of the whole proceeding
.
To approve the notice of EGM to pass special resolution for Buy Back of shares to be sent to the shareholders (If Buy Back Exceed 10 % Equity Shares upto 25 % Equity Shares)
To fix the responsibility of the entire postal ballot process to the Company Secretary and any functional director of the Company
To approve the postal ballot form along with the calendar of event.
To appoint a scrutinizer, not being an employee, who is in the opinion of the Board of directors, can conduct the postal ballot voting process in a fair and transparent manner.

Inform the Stock Exchange with which shares of the company are listed about the date of this meeting prior to the board meeting.

Inform the said Stock Exchange within 30 minutes of the board Meeting, of the outcome of the meeting in electronic form.

File Board resolution along with the Calendar of event inForm MGT 14 with the Registrar of Companies within 30 days of the Board resolution.

Whether Buy Back Exceed 10%: Yes — go to Step 2

No— go to Step 4

Note: We can convened One EGM for Alteration of Capital and Authority to Buy Back Shares.

Convene and hold a EGM
Hold and convene the General Meeting and pass the Special resolution for Buy-Back of shares
The resolution should be approved by ¾ majority i.e the votes cast in favour is three times or more than the votes cast against.

File a certified true copy of thespecial resolution inMGT 14 with the concerned Registrar of Companies within 30 days of the date of passing of the resolution and also file a copy of the same to the SEBI and Stock Exchange(s), where the securities of the company are listed.

Postal Ballot

As per provision of Section 110 of the Companies Act, 2013 and rules applicable for the same resolution for Buy Back of shares needs to be passed through Postal Ballot.

Notice of postal ballot should contain the draft resolution along with its explanation, requesting the shareholder to send their assent or dissent within 30 days of postage of notice.
Notice shall contain a pre-paid envelope, for the shareholders to give their reply.

Notice should be send by either Registered Post or speed post, or through electronic means like registered e-mail id or through courier service. .

File copy of postal ballot notice to the SEBI within 2 days from date of Notice.
Advertisement in one English, one Hindi and vernacular language newspaper.
Scrutinizer shall submit his report as soon as possible, after the last date of receipt of postal ballots but not later than Seven Days thereof.

The Scrutinizer shall maintain a register to record the consent, along with all other details.
Ballot papers to be kept in safe custody of Scrutinizer, till the Chairman, considers, approves and signs the minutes of the meeting.

The results shall be declared by placing it, along with the scrutinizer’s report, on web site of the Company.
Forward to the Stock Exchange promptly three copies of the notice of postal ballot.
Report from the Auditors:

Public Announcement
After it has been authorized to buy-back by passing resolution through postal Ballot, make a Public announcement at least 7 days from the date of passing of resolution for buy-back at least one English, Hindi and Regional language Newspaper.
Such public announcement shall contain the disclosures regarding detail of the Stock-Brokers and Stock Exchange(s) through which the buy-back of securities will be made.
A copy of the Public announcement shall be filed with SEBI along with fees specified inSchedule IV to the Regulation.

Draft Letter of Offer:

A drat letter of offer along with fees prescribed inSchedule IV to the Regulations, shall be filed with the SEBI through a merchant banker, within 5 days of the Public Announcement
The draft letter of offer shall include the particulars specified in Schedule III to the Regulations.

Declaration of Solvency:

Offer Period:

Decide the date of opening of the offer, it should not be later than 7 days from the date of Public announcement and shall close within six months from the date of opening of offer..

Information to stock Exchanges:
Give information to the stock –exchanges on daily basis regarding the securities purchased for buy-back and such information shall be published in a national daily.
The company shall buy-back its securities only through the order matching mechanism, except ‘all or none’ order matching system

The securities purchased by the company may not be necessary to be purchased at a uniform price.

The company shall pay the consideration to the stock –brokers on every settlement date.

Verification of Offer received:

The company shall complete the verifications of the offers received within 15 days from the date of closure of the offer.

Buy-back of physical shares or other specified securities:

A company shall buy-back its shares or other specified securities in physical form through open market method as provided hereunder

A separate window shall be created by the stock exchange, which shall remain open during the buy-back period, for buy-back of in physical form.
the company shall buy-back shares or other specified securities from eligible shareholders holding physical shares through the separate window

Certificate for Extinguishments Share Certificate:

The company should during the month in the presence of a Registrar to issue or the Merchant Banker and the Statutory Auditor, on or before the fifteenth day of the succeeding month or within 7 days from the Completion of Buy – Back extinguishes all share certificate related to shares which are buy–back. The Company should get certificate in Form No. SH 15 verified by Registrar to the issue/ Merchant Banker and Statutory Auditors Practicing Company Secretaries of the Company and two directors of the company including the Managing Director if any certifying that the Buy Back of Securities has been made in compliance with the provisions of the Act and the rules made there.

Furnish a certificate to SEBI and the Stock Exchange(s) within 7 days of extinguishments and destruction of the certificates.

Return of Buy Back :

The company, after the completion of the buy-back under these rules, shall file with the Registrar, a return in the Form No. SH.11.

Register of Shares / Securities Bought back:

The company shall maintain a register of shares or other securities which have been bought-back in Form No. SH.10.
The register of shares or securities bought-back shall be maintained at the registered office of the company and shall be kept in the custody of the secretary of the company or any other person authorized by the board in this behalf.
The entries in the register shall be authenticated by the secretary of the company or by any other person authorized by the Board for the purpose.

BUY – BACK OF SHARES FROM THROUGH BOOK BUILDING FROM EXISTING SHAREHOLDERS OF THE COMPANY

Convene and hold a Board Meeting
Convene and hold a Board Meeting after giving notice to all the directorsto discuss besides others the following matters

To pass a resolution for buy-back of shares and also decide the price at which the company offers to the shareholders. (Section 68 of the Companies Act, 2013)
To appoint a Compliance officer for ensuring compliance of the provisions of the Act, the Regulations, listing Agreement and any other applicable laws relating to Buy-back of securities and to redress the grievances of the investors.
To Appoint Merchant Banker who will take care of the whole proceeding
To decide the location about the investor service center, it is desirable that such centers are opened in all such cities where the security holders holding 10% or more of the voting rights reside.
.
To approve the notice of EGM to pass special resolution for Buy Back of shares to be sent to the shareholders (If Buy Back Exceed 10 % Equity Shares upto 25 % Equity Shares)
To fix the responsibility of the entire postal ballot process to the Company Secretary and any functional director of the Company
To approve the postal ballot form along with the calendar of event.
To appoint a scrutinizer, not being an employee, who is in the opinion of the Board of directors, can conduct the postal ballot voting process in a fair and transparent manner

Inform the Stock Exchange with which shares of the company are listed about the date of this meeting prior to the board meeting.

Inform the said Stock Exchange within 30 minutes of the board Meeting, of the outcome of the meeting in electronic form.

File Board resolution along with the Calendar of event inForm MGT 14 with the Registrar of Companies within 30 days of the Board resolution.

Whether Buy Back Exceed 10%: Yes — go to Step 2

No— go to Step 4

Note: We can convene One EGM for Alteration of Capital and Authority to Buy Back Shares.

Convene and hold a EGM
Hold and convene the General Meeting and pass the Special resolution for Buy-Back of shares
The resolution should be approved by ¾ majority i.e the votes cast in favour is three times or more than the votes cast against.

File a certified true copy of thespecial resolution inMGT 14 with the concerned Registrar of Companies within 30 days of the date of passing of the resolution

Forward to the Stock Exchange promptly three copies of the notice and a copy of the proceedings of the General Meeting.
Postal Ballot

As per provision of Section 110 of the Companies Act, 2013 and rules applicable for the same resolution for Buy Back of shares needs to be passed through Postal Ballot.

Notice of postal ballot should contain the draft resolution along with its explanation, requesting the shareholder to send their assent or dissent within 30 days of postage of notice.
Notice shall contain a pre-paid envelope, for the shareholders to give their reply.

Notice should be send by either Registered Post or speed post, or through electronic means like registered e-mail id or through courier service. .

File copy of postal ballot notice to the SEBI within 2 days from date of Notice.
Advertisement in one English, one Hindi and vernacular language newspaper.
Scrutinizer shall submit his report as soon as possible, after the last date of receipt of postal ballots but not later than Seven Days thereof.

The Scrutinizer shall maintain a register to record the consent, along with all other details.
Ballot papers to be kept in safe custody of Scrutinizer, till the Chairman, considers, approves and signs the minutes of the meeting.

The results shall be declared by placing it, along with the scrutinizer’s report, on wet site of the Company.
Forward to the Stock Exchange promptly three copies of the notice of postal ballot.
Public Announcement
After it has been authorised to buy-back by passing resolution through postal Ballot, make a Public announcement at least 7 days before the commencement of buy-back at least one English, Hindi and Regional language Newspaper.
Such public announcement shall contain the disclosures regarding detail of the Stock-Brokers and Stock Exchange(s) through which the buy-back of securities will be made.
A copy of the Public announcement shall be filed with SEBI within 2 days of such announcement along with fees specified inSchedule IV to the Regulation.

Draft Letter of Offer:

A drat letter of offer, along with fees prescribed inSchedule IV to the Regulations, shall be filed with the SEBI through a merchant banker, within 7 days of the Public Announcement
The draft letter of offer shall include the particulars specified in Schedule IIIto the Regulations.

Report from the Auditors:

Declaration of Solvency:

Offer Period:

. The offer should be opened for a period not less than 15 days and not more than 30 days from the date of dispatch of letter of offer to the security holders.

Escrow Account:

The Book building process shall be made through an electronically linked transparent facility. The number of bidding centers shall not be less than 30 and there shall be at least on electronically linked computer terminal at all the bidding centers.

In case the shares tendered in dematerialized mode, the company require opening a Special Depository Account through the Registrar to the Offer.

Open a Special Bank Account with the Banker to the Issue. This account should be opened immediately after the date of closure of the offer and deposit the whole consideration including lying in the escrow account.

The merchant banker and the company shall determine the buy-back price based on the acceptance received. The final buy-back price, which shall be the highest price accepted shall be paid to all holders whose shares or other specified securities have been accepted for buy-back.
In case the securities tendered by the security holders at the price at which the final buy-back price has been arrived at exceeds the total number of securities offered to be bought back by the company, the bids shall be acceptable by the company in consultation with the manager to the offer as per the pre-determined formula.

Verification of Offer received:

The company shall complete the verifications of the offers received within 15 days from the date of closure of the offer.

Payment:

The payment should be made within 7 days from the date of completion of verification of offer.

Certificate for Extinguishments Share Certificate:

The company should within fifteen days of the date of acceptance of the shares or other specified securities or within 7 days from the Completion of Buy – Back extinguishes all share certificate related to shares which are buy–back in the presence of a Registrar to issue or the Merchant Banker and the Statutory Auditor . The Company should get certificate in Form No. SH. 15 verified by Registrar to the issue/ Merchant Banker and Statutory Auditors Practicing Company Secretaries of the Company and two directors of the company including the Managing Director if any certifying that the Buy Back of Securities has been made in compliance with the provisions of the Act and the rules made there.

Furnish a certificate to SEBI and the Stock Exchange(s) within 7 days of extinguishments and destruction of the certificates.

Return of Buy Back :

The company, after the completion of the buy-back under these rules, shall file with the Registrar, a return in the Form No. SH.11.

Register of Shares / Securities Bought back:

The company shall maintain a register of shares or other securities which have been bought-back in Form No. SH.10.
The register of shares or securities bought-back shall be maintained at the registered office of the company and shall be kept in the custody of the secretary of the company or any other person authorized by the board in this behalf.
The entries in the register shall be authenticated by the secretary of the company or by any other person authorized by the Board for the purpose.

The notice of the meeting at which Special Resolution is proposed to be passed shall be accompanied by an explanatory statement stating all the details regarding buy back of shares viz:

The date of Board meeting at which the proposal for buyback was approved by the Board of Director of the Company;
The Objective of the Buy- Back;
The Class of security intended to be purchased under the buy back;
The number of securities that the company proposed to buy-back;
The Method to be adopted for the buy-back;
The price at which the buy- back of shares or other Securities shall be made
The basis of arriving at the buy-back price;
The maximum amount to be paid for the buy-back and the sources of funds from which the buy-back would be financed;
The time limit for the completion of buy-back;
The aggregate of shareholding of promoter and the director as on the date of the notice convening the General Meeting;
Aggregate number of equity shares purchased or sold by persons including promoter and director during a period of 12 Months preceding the date of Board Meeting at which buy back was approved form the date of the notice convening the General Meeting;
The maximum and minimum price at which purchase and sales referred to above made along with the relevant date;
If promoters etc. intended to tender their shares for buy-back
1. the quantum of shares proposed to be tendered
2. the details of their transaction and their holding for the last twelve months prior to the date of the Board Meeting at which the buy – back was approved including information of number of shares acquired, the price and the date of acquisition.

A confirmation that there are no default subsisting in repayment of deposits, interest payment thereon, redemption of debenture or payment of interest thereon or redemption of preference shares or payment of Dividend due to any shareholder or repayment of term loans or interest payable thereon to any financial institution or Banking Company;
A confirmation that the Board of Directors have made full enquiry into the affairs and prospects of the Company and that they have formed the opinion
1. that immediately following the date on which the general meeting is convened there shall be no grounds on which the company could be found unable to pay its debts;
2. as regards its prospects for the year immediately following that date, that having regard to their intentions with respect to the management of the company’s business during that year and to the amount and character of the financial resources which will in their view be available to the company during that year, the company shall be able to meet its liabilities as and when they fall due and shall not be rendered insolvent within a period of one year from that date; and
3. the directors have taken into account the liabilities (including prospective and contingent liabilities), as if the company were being wound up under the provisions of the Companies Act, 2013 .
A report addressed to the Board of Directors by the Company’s auditors stating that
1. they have inquired into the company’s state of affairs;
2. the amount of the permissible capital payment for the securities in question is in their view properly determined;
3. that the audited accounts on the basis of which calculation with reference to buy back is done is not more than six months old from the date of offer document; and
4. the Board of directors have formed the opinion as specified above on reasonable grounds and that the company, having regard to its state of affairs, shall not be rendered insolvent within a period of one year from that date.

The Letter of Offer shall inter-alia include:

Details of the offer including the total number and percentage of the total paid up capital and free reserves proposed to be bought back and price;
Authority for the offer of buy-back;
The proposed time table from opening of the offer till the extinguishment of the certificates;
A full and complete disclosure of all material facts including the contents of the explanatory statement annexed to the notice for the general meeting at which the special resolution approving the buyback was passed;
The necessity for the buy back;
The process to be adopted for the buy back;
The minimum and the maximum number of securities that the company proposes to buy-back, sources of funds from which the buy-back would be made and the cost of financing the buy-back;
Brief information about the company;
Audited Financial information for the last 3 years and the company and its Directors shall ensure that the particulars (audited statement and un-audited statement) contained therein shall not be more than 6 months old from the date of the offer document together with financial ratios as may be specified by the Board; Procedural Checklist for Buying Back shares of an unlisted company;
Present capital structure (including the number of fully paid and partly paid securities) and shareholding pattern;
The capital structure including details of outstanding convertible instruments, if any, post buy-back;
The aggregate shareholding of the promoter group and of the directors of the promoters, where the promoter is a company and of persons who are in control of the company;
The aggregate number of equity shares purchased or sold by persons mentioned in clause (12) above during a period of twelve months preceding the date of the public announcement and from the date of public announcement to the date of the letter of offer; the maximum and minimum price at which purchases and sales referred to above were made alongwith the relevant date;
Management discussion and analysis on the likely impact of buy back on the company’s earnings, public holdings, holdings of Non Resident Indians/Foreign Institutional Investors, etc., promoters holdings and any change in management structure;
The details of statutory approvals obtained;
A declaration to be signed
by at least two whole time directors that there are no defaults subsisting in repayment of deposit. Redemption of debentures or preference shares or repayment of a term loans to any financial institutions or banks;
by at least two whole time directors, one of whom shall be the managing director stating that the Board of Directors has made a full enquiry into the affairs and prospectus of the company and that they have formed the opinion –
as regards its prospects for the year immediately following the date of the letter of offer that, having regard to their intentions with respect to the management of the company’s business during the year and to the amount and character of the financial resources which will in their view be available to the company during that year, the company will be able to meet its liabilities and will not be rendered insolvent within a period of one year from the date;
in forming their opinion for the above purposes, the directors shall take into account the liabilities as if the company were being wound up under the Procedural Checklist for Buying Back shares of an unlisted company provisions of the Companies Act, 1956 (including prospective and contingent liabilities)
The letter of offer must be accompanied by an Auditor’s report obtained by the directors

SCHEDULE IV
[REGULATIONS 8(5), 15(e), 17(e)]
FEES

[103] [104][105](1) Every merchant banker shall while submitting the offer document or a copy of the public announcement to the Board, pay fees as set out below:-

Offer Size	Fees (in Rs.)
Less than or equal to one crore rupees	One lakh rupees (Rs. 1,00,000)
More than one crore rupees, but less than or equal to five crore rupees	Two lakh rupees (Rs. 2,00,000)
More than five crore rupees, but less than or equal to ten crore rupees.	Three lakh rupees (Rs. 3,00,000)
More than ten crore rupees, but less than or equal to one thousand crore rupees.	0.5% of the offer size.
More than one thousand crore rupees, but less than or equal to five thousand crore rupees	Five crore rupees (Rs. 5,00,00,000) plus 0.125% of the portion of the offer size in excess of one thousand crore rupees. (Rs. 1000,00,00,000).
More than five thousand crore rupees	Ten crore rupees (Rs.10,00,00,000)

(a) The fees shall be paid along with the draft of the offer document or public announcement submitted to the Board;

(b) The fees shall be payable by by way of direct credit in the bank account through NEFT/RTGS/IMPS or any other mode allowed by RBI or a draft in favour of Securities & Exchange Board of India at Mumbai.

Offer period

Offer Period means period between date of opening of offer and closing of offer as mentioned in Public Announcement or in Letter of offer.

Meeting of Buy Back of Shares

Quick Links

Q&A Modules

Useful Tools

Contact Us