Key Takeaways: - Documents & Information to shareholders - Approval for scheme of arrangement - Minimum public shareholding requirement

1. CS Meenakshi Jayaraman
SEBI (LODR) Regulations, 2015
Obligations on listing of specified
securities- Part V

2. 2
Credits and Acknowledgments
Iswariya BS

3. 3
Legends used in the Presentation
AOA Articles of Association PCA Practising Chartered Accountant
AGM Annual General Meeting PCS Practising Company Secretary
CCPS Compulsory Convertible
Preference Shares
RBI Reserve Bank of India
IBC Insolvency and bankruptcy
Board
RTGS Real Time Gross Settlement
IMPS Immediate Payment Service SCRA Securities Contract Regulation
Act
LE Listed Entity SEBI Securities and Exchange Board
of India
MD Managing Director SE Stock Exchange
MPS Minimum Public Shareholding Sec Section
NEFT National Electronic Fund
transfer
XBRL eXtensible Business Reporting
Language

4. 4
Presentation Schema
Document and
Information to
Shareholders
Draft scheme of
arrangement & scheme
of arrangement along
with Schedule XI
Format of Approval
form
Amalgamation Case law
Minimum public
shareholding
Case law relating to
MPS
Issuance of certificates
& dealings with
unclaimed securities

5. Regulation 36- Documents & Information
to shareholders
5
Mode of sharing annual report-
a) Soft copy of the full annual report shall be sent to those shareholders
who have registered their e-mail ids * with the LE or any depository
*Words ‘for the purpose’ has been omitted w.e.f. 01/04/2019
b) Shareholders who have not registered their e-mail id: Hard copy of
statement containing the salient features of all the documents, as
prescribed in Sec 136 of Companies Act, 2013 or rules made thereunder
c) Hard copies of full annual reports to those shareholders, who request
for the same
Sec 136- Right of member to copies of audited financial statements:
Documents prescribed: Financial statements and consolidated financial statements, if any,
auditor’s report and every other document which is required to be annexed with the financial
statement shall be sent to every member of the Company at least 21 days before the meeting

6. Contd.
6
A brief
resume
of the
director
Nature of
his
expertise in
specific
functional
areas
Disclosure
of inter-se
relationship
between
directors of
Board
Details about
LE in which
person holds
directorship
and
membership
in
committees
of board
Shareholding
of non-
executive
director
Director’s appointment or re-appointment in the AGM: In this case the LE shall
include the following information in the annual report-
Annual report to be sent not less than 21 days before the AGM by the listed entity

7. 7
Contd.
The disclosures made by the LE w.e.f. 01/04/2019-
a) to the SE(s) shall be in XBRL format in accordance with the guidelines
specified by the SE(s) from time to time and
b) to the SE(s) and on its website, shall be in a format that allows users to find
relevant information easily through a searching tool
Appointment or Re-appointment of statutory auditor(s) in the AGM: In this case the
notice of the meeting shall contain the following in the explanatory statement-
a) Proposed fees payable to the statutory auditor(s), term of appointment and in case
of a new auditor, any material change in the fee payable to such auditor from that
paid to the outgoing auditor and the reasons for such change
b) Basis of recommendation for appointment including the details in relation to and
credentials of the statutory auditor(s) proposed to be appointed
Disclosures in searchable formats shall not apply in case there is a statutory requirement to
make such disclosures in formats which may not be searchable, such as copies of scanned
documents

8. Regulation 37- Draft scheme of arrangement
and scheme of arrangement
8
The LE which wants to
undertake a scheme of
arrangement or involved
in a scheme of
arrangement, without
prejudice to the
provisions of Reg. 11
shall file the draft
scheme of arrangement
to the SE(s) along with a
non-refundable fee* as
specified in Schedule XI
*Inserted w.e.f
06/03/2017
for obtaining
Observation or No
objection letter from
SE(s) before filing such
scheme to any
Court or Tribunal under
sec. 391-394 and 101 of
the Companies Act,
1956 or under sec 230-
234 and sec 66 of
Companies Act, 2013, as
applicable

9. Schedule XI- Fee in respect of draft scheme
of arrangement*
9
*Inserted w.e.f 06/03/2017
The LE shall, along with the draft scheme of arrangement, remit fee at the rate of
0.1% of the paid-up share capital of the listed/transferee/resulting company,
whichever is higher, post sanction of the scheme, subject to a cap of Rs.5,00,000/-.
The fee specified in clause 1 shall be paid by way of direct credit to the bank account
of the Board through NEFT/ RTGS/ IMPS or any other mode allowed by RBI or by
means of a demand draft in favour of “SEBI” payable at Mumbai

10. Contd.
10
LE shall obtain the observation or no objection letter
before filing such scheme with any Court or Tribunal
Observation or no objection letter shall be presented before the
Court or Tribunal at the time of seeking approval for scheme of
arrangement
Validity of the letter: 6 months from the date of issuance for
submission of scheme
LE shall also ensure compliance with the other
requirements as may be prescribed by the Board from
time to time
Upon sanction of the Scheme, the LE shall submit the
documents, to the SE(s), as prescribed by the Board
and/or SE(s) from time to time

11. Contd.
11
Non-applicability of the provisions
• Inserted w.e.f. 15/02/2017
• For a draft scheme which solely provides for merger of a wholly owned
subsidiary with its holding company
• But the same shall be filed with the SE(s) for disclosure purposes
• Inserted w.e.f. 31/05/18
• This Regulation and Reg. 94 dealing with draft scheme of arrangement and
scheme of arrangement shall not be applicable
• For a restructuring proposal approved as part of a resolution plan by the
Tribunal under section 31 of IBC
• But the details shall be disclosed to the recognized SE(s) within 1 day of
approval of resolution plan

12. Format of Approval Form
12

13. Contd.
13

14. Contd.
14

15. Contd.
15

16. Contd.
16

17. Contd.
17

18. Amalgamation of VSL with GIL
18
GODREJ INDUSTRIES
LIMITED (GIL)
VORA SOAPS LIMITED (VSL)
GODREJ
AGROVET
LIMITED (GAVL)
GODREJ
PROPERTIES
LIMITED (GPL)
Holding Company
Layer 1
Layer 2

19. Contd.
19
• Rationale of the Scheme: As per sec. 2 (87) of Companies Act, 2013 and Companies
(Restriction on number of layers) Rules, 2017- No Company shall have >2 layers of
subsidiaries
• This restricts GPL & GAVL wants to incorporate new subsidiary or step down subsidiary
Transferor Company
• Vora Soaps
Limited
Transferee
Company
• Godrej Industries
Limited
Application under Reg.37 was submitted with necessary documents for obtaining no
objection letter or observation letter for proposed scheme of amalgamation of VSL with GIL

20. Contd.
20
Issue and allotment of shares from VSL to GIL based on the Valuation report given by
M/s. Price Waterhouse & LLP, Chartered Accountants
No. of shares Face value To whom
19,39,04,681 full paid
equity shares of the
Transferee Company
₹1/- Issued and allotted to
the Equity shareholders
and CCPS holders of the
Transferor company in
proportion to their
holding in Transferor
company
On 5th January, 2018, the scheme was submitted to SE pursuant to Reg.37 and on 17th
December, 2018 the scheme of arrangement between VSL and GIL was approved by
National Company Law Tribunal, Mumbai bench

21. Regulation 38- Minimum Public Shareholding
(MPS)
21
The LE shall comply with the minimum public shareholding requirements specified in
Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957 in the
manner as specified by the Board from time to time
Non-applicability
Entities which are listed on institutional trading platform without making a public
issue

22. Contd.
22
Rule 19A – Minimum Public Shareholding:
• Every LE shall maintain MPS of 25% within 3 years from the date of 4th June, 2010
• If MPS falls below 25% at any time, such company shall within a period of 12 months from the
date of such fall achieve MPS in a manner as specified by SEBI
Rule 19(2)(b) - Minimum Offer and allotment to public in terms of offer document :
• Maintenance of MPS of at least 25% of each class or kind of equity shares or debentures
• Issued by a listed company

23. Case Law:
23
Miven Machine Tools Limited (MMTL)
Due date for complying
with MPS under Rules
19(2)(b) & 19A : 3rd
June, 2013
As on 4th June 2013 an
interim order was
passed by Whole-time
member (WTM) of SEBI
with respect to 105
non-complied listed
companies
MMTL was one of those
companies against
whom an interim order
was passed
• MMTL had proposed to delist the shares on receiving the interim order
100
80
60
40
20
86.19% - Promoter & Promoter
group shareholding
13.81% - Public shareholding

24. Contd.
24
Offer for sale
through stock
exchange
mechanism was
initiated by the
company. The
company
successfully
transferred the
shares in order
to meet MPS
3rd action
Therefore,
requested SEBI
for extension for
delisting process
and the
extension was
granted till 2nd
October, 2015.
But this time the
resolution was
not passed. So
the company
closed the
delisting process
2nd action
Initiated
delisting
process,
received
shareholders
approval but
failed to
complete the
process within
the stipulated
time
1st action
Actions taken by MMTL on receiving interim order :

25. Contd.
25
Shareholding pattern post offer for sale-
Promoter & Promoter group
Earlier: 86.19%
Transferred: 11.19%
Post transfer: 74.9992%
Public shareholders
Earlier: 13.81%
Received: 11.19%
Post transfer: 25.0008%
On complying with the MPS provisions after 2 years, WTM of SEBI revoked the interim order
passed against the company and referred the matter to adjudication proceedings

26. Contd.
26
Issue of show cause
notice on 28th May, 2018
Reply on 10th
June, 2018
Personal hearing on 21st
June, 2018
MD, Company
Secretary & PCS
appeared on behalf
of MMTL
By the company
with reasons for
non-compliance
and delay
As to why an
inquiry should not
be initiated and
penalty should not
be imposed
Final Order : Penalty of 10 lakh was imposed for violation of the following provisions:
Rule 19A(1) of SCRR-MPS of 25%
Sec 21 of SCRA-Conditions for listing
Clause 40A of listing agreement- Minimum level & methods to raise public shareholding
Reg. 38 of SEBI (LODR) Regulations, 2015

27. Regulation 39-Issuance of certificates for
securities & dealings with unclaimed securities
27
Rule 19(3) of Securities Contract (Regulations) Rules, 1957 shall be
complied by the LE for letter/advices of allotment, acceptance or rights,
transfers, subdivision, consolidation, renewal, exchanges, issuance of
duplicates or any other purpose
The certificate/ receipt/ advices/ duplicates shall be issued within 30
days from the date of lodging
LE shall submit information regarding loss of share certificates and issue
of duplicate share certificates within 2 days of obtaining information
Schedule VI shall be followed while dealing with securities issued
though public issue or any other issue, physical or otherwise, which
remain as unclaimed &/or are lying in escrow account

28. Contd.
28
• Letters of allotment and rights has to be issued simultaneously with necessary
details
• Receipts for securities deposited shall be issued
• If the documents are lodged for sub-division/ consolidation/ renewal, it shall be
accepted or verified by the company
• Record transfer & issue certificates for the same within a period of 1 month
• Intimation to SE about the BM in which dividend / bonus shares are recommended
and declared
• Notify the SE about any material change in the nature of business
• Intimation of change in directors, auditors, MD, CS, treasurers
• Forwarding financials, annual and statutory reports, and annual return
• Forwarding the documents of general meetings
• Notify SE about bonus/ rights issue, re-issue, alteration of capital
• Book closure and record date
• To grant right to renounce to shareholders at the time of rights, privileges and
benefits
• Prompt notification in case of any alteration in the securities listed
• Follow the rules and bye-laws of the SE
Rule 19(3)- A company applying for listing shall do the following-

29. Schedule VI- Manner of dealing with
unclaimed shares
29
The LE may delegate the following procedural requirements to a share transfer
agent.
At least 3 reminders has to be sent to the address below-
Shares in demat form- reminders shall be sent to the address captured in
depository’s database or address given in the application form, in case of
application made in physical form
Shares in physical form- reminders shall be sent to the address given in the
application form as well as last available address as per LE’s record

30. Contd.
30
Procedures in case of non-receipt of response to reminders-
Shares in demat form- the unclaimed shares shall be credited to a demat suspense
account with one of the Depository Participants, opened by the LE for this purpose
Shares in physical form- all the shares shall be transferred into one folio in the
name of “Unclaimed Suspense Account” and shall dematerialise the shares held
in the Unclaimed Suspense Account with one of the Depository Participants
The LE shall maintain details of shareholding of each individual allottee whose
shares are credited to such demat suspense account or unclaimed suspense
account, as applicable
Accounts shall be held by the LE purely on behalf of the allottees who are entitled to
the shares and the shares held in such suspense account shall not be transferred in
any manner whatsoever except for the purpose of allotting the shares to the allottee
as and when he approaches

31. Contd.
31
• Shares, in respect of which unpaid or unclaimed dividend has been transferred
under Sec 124 (5) of the Companies Act, 2013, shall also be transferred by the
listed entity in accordance with Sec 124 (6) of the Companies Act, 2013 and
rules made thereunder
• Sec 124(5) – Money transferred to unpaid dividend account which remains
unpaid or unclaimed there for a period of 7 years shall be transferred along
with interest accrued, if any and a statement in a prescribed form has to be
sent to the authority which administers the fund
• Sec 124(6)- All such shares shall be transferred to Investor Education and
Protection Fund along with a statement of details

32. 32
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