TaxTMI 
TaxTMI 
Master Circular on (i) Scheme of Arrangement by Listed Entities and (ii) Relaxation under Sub- rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957
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.... 4. Notwithstanding such rescission, 4.1. Anything done or any action taken or purported to have been done or taken under the rescinded circulars, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular; 4.2. any application made to SEBI under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular; 4.3. the previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded circulars, any penalty, incurred in respect of any violation committed against the rescinded circulars, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall remain unaffected as if the rescinded circulars have never been rescinded; 5. Recognized Stock Exchanges, Issuers and other stakeholders are directed to: 5.1. comply with the conditions laid down in this circular; 5.2. bring th....
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....he SCRR") provides that Securities and Exchange Board of India (SEBI) may, at its own discretion or on the recommendation of a recognized Stock Exchange, waive or relax the strict enforcement of any or all of the requirements with respect to listing prescribed by these rules. 4. The Provisions of this circular shall not apply to schemes which solely provide for merger of a wholly owned subsidiary or its division with the parent company. [SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017] However, such draft schemes shall be filed with the Stock Exchanges for the purpose of disclosures and the Stock Exchanges shall disseminate the scheme documents on their websites. 5. The issuance of shares under schemes in case of allotment of shares only to a select group of shareholders or shareholders of unlisted companies pursuant to such schemes shall follow the pricing provisions of Chapter V of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended from time to time (hereinafter referred to as "the ICDR Regulations"). It is clarified that the 'relevant date' for the purpose of computing pricing shall be the date of Board meeting in whic....
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....port from the Audit Committee recommending the Draft Scheme, taking into consideration, inter alia, the Valuation Report. The Valuation Report is required to be placed before the Audit Committee of the listed entity. The Audit Committee report shall also comment on the following: • Need for the merger/demerger/amalgamation/arrangement • Rationale of the scheme • Synergies of business of the entities involved in the scheme • Impact of the scheme on the shareholders • Cost benefit analysis of the scheme; d) Fairness opinion by a SEBI Registered merchant banker on valuation of assets/shares done by the valuer for the listed entity and unlisted entity; e) Pre and post amalgamation shareholding pattern of unlisted entity; f) Audited financials of last 3 years (financials not being more than 6 months old) of unlisted entity; g) Auditor's Certificate as per Para (5) below; h) Detailed Compliance Report as per the format specified in Annexure I duly certified by the Company Secretary, Chief Financial Officer and the Managing Director, confirming compliance with various regulatory r....
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....ntity, in the post scheme shareholding pattern of the "merged" company on a fully diluted basis shall not be less than 25^. [SEBI Circular No. CFD/DIL3/CIR/P/2018/2 dated January 3, 2018 ^] c) Unlisted entities can be merged with a listed entity only if the listed entity is listed on a Stock Exchange having nationwide trading terminals. 4. Valuation Report a) All listed entities are required to submit a valuation report from a Registered Valuer. [SEBI Circular No. SEBI/HO/CFD/DIL1/CIR/P/2020/215 dated November 3, 2020 ] The valuation report shall contain the workings, relative fair value per share and fair share exchange ratio in the manner as provided in Annexure-II. For the purpose of this clause, the Registered Valuer shall be a person, registered as a valuer, having such qualifications and experience and being a member of an organization recognized, as specified in Section 247 of the Companies Act, 2013 read with the applicable Rules issued there under. b) However, Valuation Report is not required in cases where there is no change in the shareholding pattern of the listed entity / resultant company. c) For the li....
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....dard format for auditors' certificate would be as per Annexure III. 6. Redressal of Complaints a) The Listed entity shall submit to Stock Exchanges a 'Report on Complaints' which shall contain the details of complaints/comments received by it on the Draft Scheme from various sources (complaints/comments written directly to the listed entity or forwarded to it by the Stock Exchanges/SEBI) as per Annexure IV of this Circular prior to obtaining Observation Letter from Stock Exchanges on Draft Scheme. b) 'Report on Complaints' as mentioned above, shall be submitted by listed entity to the Stock Exchanges within 7 days of expiry of 21 days from the date of filing of Draft Scheme with Stock Exchanges and hosting the Draft Scheme along with documents specified under para (2) above on the websites of Stock Exchanges and the listed entity. 7. Unpaid Dues Report [SEBI Circular No. SEBI/HO/CFD/DIL1/CIR/P/2019/192 dated September 12, 2019 ] a) All listed entities shall ensure that all dues to, and/or fines/penalties imposed by SEBI, Stock Exchanges and the Depositories have been paid/settled before filing the draft scheme with the designated s....
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....ders through e-voting, after disclosure of all material facts in the explanatory statement sent to the shareholders in relation to such resolution. b) The Scheme of arrangement shall be acted upon only if the votes cast by the public shareholders in favour of the proposal are more than the number of votes cast by the public shareholders against it, in the following cases: i. Where additional shares have been allotted to Promoter / Promoter Group, Related Parties of Promoter / Promoter Group, Associates of Promoter / Promoter Group, Subsidiary/(s) of Promoter / Promoter Group of the listed entity, or ii. Where the Scheme of Arrangement involves the listed entity and any other entity involving Promoter / Promoter Group, Related Parties of Promoter / Promoter Group, Associates of Promoter / Promoter Group, Subsidiary/(s) of Promoter / Promoter Group. 12 SEBI Circular No. SEBI/HO/CFD/DIL1/CIR/P/2020/215 dated November 3, 2020 iii. Where the parent listed entity has acquired, either directly or indirectly, the equity shares of the subsidiary from any of the shareholders of the subsidiary who may be Promoter / Promoter Group, Related Parties of Prom....
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....ompany Law Tribunal (NCLT) if listing of Non-Convertible Debentures (NCDs) and/or Non-Convertible Redeemable Preference Shares (NCRPS) is envisaged through a Scheme of Arrangement [SEBI Circular No. SEBI/HO/DDHS/DDHS_Div1/P/CIR/2022/0000000103 dated July 29, 2022 (updated as on December 01, 2022) ] A listed entity, which has listed its specified securities, may seek listing of NCDs and/or NCRPS issued pursuant to a scheme of arrangement provided that it has complied with the following provisions:- a) Eligibility for seeking listing of NCRPS/ NCDs i. A listed entity which has listed its specified securities may seek listing of NCDs and/or NCRPS issued pursuant to a scheme of arrangement only in case where the listed entity is a part of such scheme of arrangement and such NCDs and/or NCRPS are issued to the holders of specified securities of such listed entity. Such scenarios may broadly include the following: • A listed entity, which has listed its specified securities, (demerged entity) demerges a unit and transfers the same to another entity (resultant entity), and the resultant entity issues NCDs and/or NCRPS to the holders of the specified....
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....t Debenture Trustee in compliance with the provisions of the NCS Regulations and the Companies Act, 2013. iv. In case of secured NCDs, the issuer has created/ shall create an appropriate charge or security, in compliance with the provisions of the NCS Regulations and the Companies Act, 2013 v. All the provisions of Chapter II of the NCS Regulations have been/ shall be complied with. B. Obligations of Stock Exchange(s) 1. The designated Stock Exchange, upon receipt of the Draft Scheme of Arrangement and documents referred to at part (I) (A) (2) above shall forward the same to SEBI within three working days. 2. The 'Report on Complaints' shall be forwarded by the Stock Exchanges to SEBI before SEBI communicates its comments on the Draft Scheme to the Stock Exchanges. Such Report shall be submitted as per the format specified at Annexure IV to this Circular. 3. The Stock Exchanges where the specified securities are listed / proposed to be listed shall also disclose on their websites the documents listed at part (I) (A) (2) above immediately on receipt. It shall also disclose the Observation Letter on its website immediately upon is....
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....FD/DIL2/CIR/P/2021/0000000657 dated November 16, 2021 ] 1. The fractional entitlements, if any, shall be aggregated and held by the trust, nominated by the Board in that behalf, who shall sell such shares in the market at such price, within a period of 90 days from the date of allotment of shares, as per the draft scheme submitted to SEBI. The listed company shall submit to the designated stock exchange a report from its Audit Committee and the Independent Directors certifying that the listed entity has compensated the eligible shareholders. Both the reports shall be submitted within 7 days of compensating the shareholders. 2. The Exchange shall ensure compliance of the above and non-compliance, if any, shall be submitted to SEBI on a quarterly basis. 3. Any misstatement or furnishing of false information with regard to the said information shall make the listed entity liable for punitive action as per the provisions of applicable laws and regulations. PART-II: Application for relaxation under Sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957 [SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017&nb....
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....ra (b) above shall be computed after giving effect to the consequent increase of capital on account of compulsory conversions outstanding as well as on the assumption that the options outstanding, if any, to subscribe for additional capital will be exercised; and e) The shares of the transferee entity issued in lieu of the locked-in shares of the transferor entity will be subject to lock-in for the remaining period. 2. Additional conditions for entities seeking relaxation under sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957 Stock Exchanges shall ensure that, an unlisted issuer may make an application to the Board under sub-rule (7) of rule 19 of the SCRR, pursuant to Part II(A) of this Circular if it satisfies the following conditions: a) Observation Letter or No Objection Letter has been issued by the Stock Exchanges to the Draft Scheme of arrangement; b) The listing of the equity shares of the transferee entity is in terms of the Scheme sanctioned by the Hon'ble High Court / NCLT or its order whereby the Scheme of arrangement has been sanctioned; c) The equity shares sought to be listed have been ....
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....among promoters in accordance with the conditions specified under Regulation 22 of ICDR Regulations. Provided further that shares presently under lock-in as per the provisions of earlier circulars shall also be governed by the provisions of this clause [SEBI Circular No. CFD/DIL3/CIR/P/2018/2 dated January 3, 2018 ]. 5. It shall be ensured that steps for listing of specified securities are completed and trading in securities commences within sixty [SEBI Circular No. CFD/DIL3/CIR/P/2018/2 dated January 3, 2018 ] days of receipt of the order of the Hon'ble High Court/NCLT, simultaneously on all the stock exchanges where the equity shares of the listed entity (or transfer entity) are/were listed. Before commencement of trading, the transferee entity in addition to disclosing the information in the form of an information document on the website of the stock exchange/s shall also give an advertisement in one English and one Hindi newspaper with nationwide circulation and one regional newspaper with wide circulation at the place where the registered office of the transferee entity is situated, giving following details:" a) Name of the Company; b) ....
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....d from time to time. [SEBI Circular No. SEBI/HO/CFD/DIL1/CIR/P/2020/215 dated November 3, 2020 ] B. Application by a listed entity for Listing of warrants Offered Along With Non- Convertible Debentures (NCDs): A listed entity, desirous of listing of its warrants without making an initial public offer of warrants, may make an application to the Board under sub-Rule (7) of rule 19 of the SCRR seeking relaxation from strict enforcement of clause (b) to sub-rule (2) of rule 19 if it satisfies the following conditions: a) warrants are issued as combined offering of NCDs and warrants through qualified institutions placement under Chapter VI of the ICDR Regulations; b) the issuer is in compliance with all the provisions of Chapter VI of the ICDR Regulations; and c) NCDs and warrants shall be traded in the minimum trade lot of one lakh rupees. C. Requirements to be fulfilled by Stock Exchange(s) 1. The designated Stock Exchange shall forward the documents to the Board along with its recommendations on documents and recommendation, if applicable, on the application for granting exemption, under sub-rule (7) of rule 19 of SCRR. D. P....
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.... xx Annexure III Format for Auditor's Certificate To, The Board of Directors, ...................................................................... (Name and address of the Company) We, the statutory auditors of .................................. (name of the listed entity),(hereinafter referred to as "the Company"), have examined the proposed accounting treatment specified in clause ......... (specify clause number) of the Draft Scheme of ...................................... (specify the type of Scheme) between ............................................... (names of the companies/entities involved) in terms of the provisions of section(s) ....................................... (specify the relevant section(s)) of the Companies Act, 1956/ Companies Act, 2013 with reference to its compliance with the applicable Accounting Standards notified under the Companies Act, 1956/ Companies Act, 2013 and Other Generally Accepted Accounting Principles. The responsibility for the preparation of the Draft Scheme and its compliance with the relevant laws and regulations, including the applicable Accounting Standards as aforesai....
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..... No. Particulars Number 1 Number of complaints received directly 2 Number of complaints forwarded by Stock Exchanges / SEBI 3 Total Number of complaints/comments received (1+2) 4 Number of complaints resolved 5 Number of complaints pending Part B Sr. No. Name of complainant Date of Complaint Status 1 2 3 Sr. No. Particulars Details of dues/fine Amount Reason for non payment 1. Pending Dues of SEBI 2. Pending Dues of Stock Exchanges 3. Pending Dues of Depositories Annexure VI Format of the Compliance Report to be submitted along with the application for relaxation under Sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957) if listing of Non-Convertible Redeemable Preference Shares (NCRPS) / Non-Convertible Debentures (NCDs) is envisaged through a Scheme of Arrangement It is hereby certified that the schem....