TaxTMI 
TaxTMI 
Guidelines in respect of the disclosures to be made in the Letter of offer in respect of Buy-back of securities in terms of SEBI (Buy-back of Securities) Regulations, 1998 and Format of Standard letter of offer
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....circular shall come into force with immediate effect. 4. This circular is in supersession of the previous circular no. MIRSD/DPS-2/MB/Cir-02/8859/04 dated May 07, 2004 issued to Merchant Bankers registered with SEBI. 5. This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 read with regulation 26 of the SEBI (Buy-Back of Securities) Regulations, 1998 as amended. 6. All Merchant Bankers are advised to ensure compliance with this circular. 7. This circular is available on SEBI website at www.sebi.gov.in under the category "Legal Framework". Yours faithfully, Anindya K Das Deputy General Manager +91-22-26449616 [email protected] Annexure-A SECURITIES AND EXCHANGE BOARD OF INDIA STANDARD LETTER OF OFFER FOR BUY BACK OF SECURITIES IN TERMS OF THE SEBI (BUY BACK OF SECURITIES) REGULATIONS, 1998 General Instructions / Guidelines: 1. The purpose of this standard letter of offer for Buy Back of equity in accordance with Chapter III of the SEBI (Buy Back of Securities) Regulations, 1998 (hereinafter referred to as "the Regulations") is to provid....
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.... of ten working days. 10. Merchant Banker shall submit the Due Diligence Certificate in terms of Regulation 20(f) of the Regulations to Board along with the draft Letter of Offer as per the standardized format. 11. The merchant banker to give registration number of the Chartered Accountant who has given the report in terms of clause (xi) of Schedule II, part A of the Regulations. Format of the Standard Letter of Offer The sequence of presentation in Letter of Offer shall be as under: 1) Cover page 2) Table of Contents 3) Schedule of activities 4) Definition of key terms 5) Disclaimer clause 6) Text of the Resolution passed at the Board meeting 7) Details of Public Announcement 8) Details of the Buy Back 9) Authority for the Buy Back 10) Necessity of the Buy Back 11) Management Discussion and analysis of the likely impact of Buy Back on the Company. 12) Basis of calculating Buy Back Price 13) Sources of fund for the Buy Back 14) Details of the Escrow Account and the amount to be deposited therein 15) Capital Structure & Shareholding patte....
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....hodology adopted for the Buy Back, Record date, Offer price per share in terms of rupees, Disclose the mode of payment, A statement that the offer is pursuant to SEBI (Buy Back of Securities) Regulations, 1998 and subsequent amendments thereof. A statement that a copy of public announcement and Letter Of Offer (including form of acceptance cum acknowledgment) is also available on SEBI's web-site (www.sebi.gov.in), Information regarding the enclosures along with the Letter of offer, Relevant applicable provisions/ regulations of Companies Act and SEBI. iii) At the bottom Closing date and day of Buy Back, Opening date and day of Buy Back, The following details of the Manager to the offer • Name of the Manager to the offer • Name of Contact Person • Address • Telephone Number of manager and contact person • Fax Number of manager and contact person • E-mail Address of manager and contact person • SEBI Registration Number • Validity Period The following details of the Registrar to the offer • Name of the Registrar • Name of Contact Person â....
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.... Buy Back • Record Date • Buy Back Opening date • Buy Back Closing date • Last date of Verification • Last date of intimation regarding acceptance/ non- acceptance • Last date of dispatch of consideration/ share certificate/ demat instructions • Last date of extinguishment of shares 2) Definition of key terms Definitions of the specialized terms used in the Letter of Offer for easy understanding by the shareholders. 3) Disclaimer clause As required, a copy of this letter of Offer has been submitted to Securities and Exchange Board of India (SEBI). It is to be distinctly understood that submission of letter of offer to SEBI should not, in any way be deemed or construed that the same has been cleared or approved by SEBI. SEBI, does not take any responsibility either for the financial soundness of the company to meet the buyback commitments or for the correctness of the statements made or opinions expressed in the offer document. The Manager to the Issue, M/s. - __________has certified that the disclosures made in the offer document are generally adequate and are in conformity with t....
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....ssed / withheld and / or amounts to a mis-statement / mis-representation, the promoters / directors and the company shall be liable for penalty in terms of the provisions of the companies Act, 1956 and the SEBI (Buy Back of Securities) Regulations, 1998. Promoters / Directors also declare and confirm that funds borrowed from Banks and Financial Institutions will not be used for the buy-back. 4) Text of the Resolution passed at the Board meeting Give the detailed text of the resolution passed at the meeting of the Board approving Buy Back. 5) Details of Public Announcement The information regarding the Publication of Public Announcement in the Newspaper, the language in which it appeared and the date of publication. 6) Details of the Buy Back • Mention the name of the company • Maximum number of shares proposed to be bought back • Number of shares to be bought back as %age of existing paid up capital of the company • The price at which the shares are to be bought back • The Regulation of SEBI/ provisions of the Companies Act in accordance with which the offer is made • The methodology to be ....
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....esults Total Debt / Equity Ratio* *Excluding revaluation reserves and miscellaneous expenditure to the extent not written off 10) Basis of calculating Buy Back Price The basis on which the buy back Price has been arrived at must be disclosed. Justification of the offer price taking into account the following may be disclosed; • Trends in the market price of the equity shares of the Company. • The closing market price of the equity shares as on the date of intimation of the date of the Board Meeting for considering the Buy-back to the Stock Exchanges • Book Value • EPS • Return on net worth etc. 11) Sources of fund for the Buy Back • The source from where the Company proposes to finance the buy back may be disclosed. • Declaration that the Company proposes to meet the funds requirement for the Buy-back through internal accruals. 12) Details of the Escrow Account and the amount to be deposited therein • Disclosure that the Company has opened/ will open an escrow account in terms of Regulation 10 of the Regula....
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.... Details of the buyback programme in the last three years, opening and closing date. • Details of partly paid shares. • Details of calls in arrears. • Details of all other outstanding convertible securities. Price to be paid for the convertible securities. • The shareholding pattern of the Company before and after the Buy-back Offer (assuming full subscription of the Buy-back Offer) shall be given as below: Pre-Buy-back Post Buy-back Particulars No. of Equity Shares % to the existing equity share capital No. of Equity Shares % to post Buy-back equity share Capital Promoters and persons acting in concert, (collectively "the Promoters") Foreign Investors (including Non Resident Indians FIIs and Foreign Mutual Funds) Financial Institutions /Banks & Mutual Funds promoted by Banks / Institutions Others (Public, Public Bodies Corporate etc.) Total • Assuming 100% response to the Buy-back Offer, the issued, subscribed and ....
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....Networth • Declaration that the Company will comply with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 1997, if applicable • Declaration that the Company has complied with Section 77A (2) (c), (d), 77B (1) and 77B (2) of the Companies Act, 1956. 16) Stock Market Data • Information regarding the stock exchanges where the Shares of the Company are listed • Information regarding High, low and average market prices for the last three years and monthly high, low and average market prices for six months preceding the Public announcement and their corresponding volumes on the stock exchange where the Company's shares are most frequently traded shall be given as under: Period High (Rs.) Date of High and Number of Shares traded on that date Low (Rs.) Date of Low and Number of shares traded on that date Average Price (Rs.) Total volume traded in period ....
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....he Register of Members of the Company and who are beneficial owner/s of shares as per the records made available to the Company by depositories as on Record Date. • That the Company will not accept any shares for Buy-back, in case of court restraints on transfer / sale of shares. • That the Company shall comply with Regulation 19(5) of the regulations. • The company shall accept shares or other specified securities from the security holders on the basis of their entitlement as on record date. • The shares proposed to be bought back shall be divided in to two categories; (a) reserved category for small shareholders and (b) the general category for other shareholders, and the entitlement of a shareholder in each category shall be calculated accordingly. • After accepting the shares or other specified securities tendered on the basis of entitlement, shares or other specified securities left to be bought back, if any in one category shall first be accepted, in proportion to the shares or other specified securities tendered over and above their entitlement in the offer by security holders in that category and thereafter fr....
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....be submitted to the Collection Centres so as to reach before the close of business hours of the respective Collection Centres on or before the closing date. Shareholders residing at locations where there are no collection centres are requested to tender their response to the Registrar to the Offer. The shareholders should ensure the receipt of the credit in the escrow depository account on or before the last date of the offer • Statements regarding Consideration a It is mandatory for shareholders to indicate the bank account details to which the consideration would be payable at the appropriate place in the Tender / Offer Form. b Mode of payment of Consideration c Tentative date of dispatch of consideration. The payment shall be made by default to the sole/ first shareholder in the bank account, the details of which are recorded with the company/ depository, where such facility is available. The cheques for shareholders residing at places where the facility of transfer of payment is not available should be made payable at par at all the centres where the Company is accepting applications and in mandatory ECS centres. d Tentative date....
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....ction Centres on the closing date. • That the shareholders residing at locations where there are no Collection Centers are requested to tender their response to the Registrar to the Offer. • Information regarding the mode of payment to the shareholders whose offer has been accepted by the Company. • Tentative date of dispatch of intimation regarding acceptance or non-acceptance of the shares and the corresponding payment for the accepted shares and / or share certificates for the rejected shares. • The payment shall be made by default to the sole/ first shareholder in the bank account, the details of which are recorded with the company, where such facility is available. The cheques for shareholders residing at places where the facility of transfer of payment is not available should be made payable at par at all the centres where the Company is accepting applications and at mandatory ECS centres. • That it is mandatory for shareholders to indicate the bank account details to which the consideration would be payable at the appropriate place in the Tender / Offer Form. • That the non receipt of this Letter o....
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....d of India (Buy-back of Securities) Regulations, 1998, as under: i The Board of Directors confirm that there are no defaults subsisting in repayment of deposits, redemption of debentures or preference shares or repayment of term loans to any financial institutions or banks. ii The Board of Directors confirm that based on a full enquiry conducted into the affairs and prospects of the Company and taking into account all the liabilities including prospective and contingent liabilities payable as if the Company were being wound up under the Companies Act, 1956, the Board of Directors have formed an opinion that a Immediately following the date of the Letter of Offer, there are no grounds on which the Company could be found unable to pay its debts. b 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 said year and to the amount and character of the financial resources which will be available to the Company during the said year, the Company will be able to meet its liabilities as and when they fall due....
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.... Documents for inspection The following material documents may be kept for inspection by Public. Disclose the addresses of the places and timings for inspection. • Certificate of incorporation • Memorandum and Articles of Association of the Company. • Annual Reports for the years last three years. • Resolution approving proposal for Buy-back passed at the meeting of the Board. • Auditors' Certificate as prescribed in clause (xi) of Schedule I, Part A. • Copy of the Public Announcement • Declaration of Solvency and an affidavit verifying the same as per Form 4A of the Companies (Central Government's) General Rules and Forms, 1956. 25) Details of the Compliance Officer • Name • Designation • Name of the company • Address • Telephone number • Fax No. • E-mail address • Days & time when he can be contacted 26) Details of the Remedies available to the Shareholders/ Beneficial Owners • Statement that in case of any grievance relating to the buy back (e.g.: non-receipt of....
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....rest, charges and encumbrance. 4 I / We declare that there are no restraints / injunctions or other order of any nature which limits / restricts in any manner my / our right to tender shares for Buy-back and that I / we am / are legally entitled to tender the shares for Buy-back. 5 I / we agree that the Company will pay the Offer Price only after due verification of the validity of the documents and that the consideration may be paid to the first named shareholder. 6 I/ We undertake to return to the Company any Buy-back consideration that may be wrongfully received by me/us. 7 I / We undertake to execute any further documents and give any further assurances that may be required or expedient to give effect to my / our tender / offer and agree to abide by any decision that may be taken by the Company to effect the Buy-back in accordance with the Act and the Regulations. 8 Details of shares held and offered for Buy-back: In Figures In Words Number of Shares held Number of Shares Entitled Number of shares offered for Buy-Back 9 Details of account with Depository Participant Name of....
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....r will open on ............ and close on .............. 2 This Tender / Offer Form has to be read along with the Letter of Offer and is subject to the terms and conditions mentioned in the Letter of Offer. 3 For the purpose of Buy-back, the Company has opened an account with a Depository Participant (DP) as detailed below: DP Id. Number DP Name Client Id. Number Client Account Name 4 Shareholders of the Company who wish to tender / offer their shares in response to this Buy-back Offer should deliver the following documents so as to reach before the close of business hours at the respective Collection Centers (as mentioned in the Letter of Offer) on or before ............ by .........Shareholders residing at locations where there are no collection centres should send their response to the Registrar to the Offer,(Name of the RTI). • The relevant Tender / Offer Form duly signed (by all shareholders in case the shares are in joint names) in the same order in which they hold the shares. • Copy of delivery instruction issued by shareholders to their DP for transferring the shares tendered for Buy-back,....
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....reholder shall be liable to be rejected. Also, multiple tenders from the same depository account or same registered folio shall also be liable to be rejected ALL FUTURE CORRESPONDENCE IN CONNECTION WITH THIS BUY-BACK OFFER SHOULD BE ADDRESSED TO THE REGISTRAR TO THE BUY-BACK OFFER, (Name of the RTI) QUOTING YOUR CLIENT ID & DP ID. TENDER / OFFER FORM (FOR SHAREHOLDERS HOLDING SHARES IN PHYSICAL FORM) DATE:------ To For Collection Centre use The Board of Directors Centre Code Inward No. Date Stamp Name of the company Phone No.: Fax No. : Dear Sirs, Ref: Letter of Offer dated ............. to buy back shares of (Name of the Company) 1 I / We (having read and understood the Letter of Offer dated .........) hereby tender /offer my/our shares in response to the Buy-back Offer on the terms and conditions set out below and in the Letter of Offer. 2 I / We authorise the Company to buy back the shares offered and as a consequence to extinguish the share certificates. ....
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....ertificates enclosed exceed 5 nos., please attach a separate sheet giving details in the same format as above. 12 Details of Other Documents (please tick appropriately), if any, enclosed: • Corporate Authorisations • Death Certificate • Succession Certificate • Power of Attorney • Any Other, please specify__________________________________ 13 Details of Bank Account of the Sole / First Shareholder to be incorporated in the consideration warrant (to be mandatorily filled) Name of the Bank Branch and City Account Number ( Indicate type of account) 14 Shareholder(s) details (Signature(s) as per specimen recorded with the Company): Sole / First Shareholder Second holder (if any) Third holder (if any) Name in Full Signature Address of the Sole / First Shareholder Telephone No. /E Mail ---------------------------------------------------------------------------------------- (Name of the company) - BUY-BACK OFFER-ACKNOWLEDGEMENT (to be filled by the shareholder) Received from Mr/Ms______....