PREREQUISITES

Before the Company proceeds to begin the process of Buy Back of the Shares of the Company, it is required to ensure that the following steps are
completed:

The provisions of the Companies Act requires that any Company which intends to buy back its own shares shall make the calculations with
reference to the buy back on the basis of accounts which is not older than six months. To comply with this provision, the Company has to provide
us:

i. The audited financial statements for the year ending as on ___________________ along with its Audit Report OR
ii. Unaudited financial statements which are closed on _______________(any date within 6 months from the initiation of the Buyback process)
along with a ‘Limited Review Report’ from the Statutory Auditor.

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 ACTION PLAN

S.NO PARTICULARS REMARKS RESPONSIBILITY TIME LINE

1 AUDITED FINANCIAL STATEMENTS OF THE MEGA TRADE ______________
COMPANY (NA- AS THE
BUYBACK CAN BE
The gap between the audited financial statements APPROVED BY THE
and the date of initiation of the buyback process BOARD (LESS THAN
shall not exceed 6 months. The Company may also 10% OF PC+FR)
close their books of accounts in the mid year and
obtain a Limited Review Report from the auditor. AMOUNT BOUGHT
BACK –SHARES –
INR 10,000( 2%),
DEBENTURES- INR
361000 (5.89%)
2 OBTAIN A SHARE VALUATION CERTIFICATE MEGA TRADE
FROM AN AUDITOR
The date of
A Valuation Certificate shall be obtained from an Valuation
auditor that provides the price of each share to be certificate should
bought back from the shareholders of the be prior to BM date.
company.

3 OBTAIN REPORT FROM THE STATUTORY -

AUDITOR

A report by the Statutory Auditor stating such

items as provided in the rule 17 of the Companies
(Share Capital and debenture) Rules of the Act
shall be obtained.

4 OPENING OF A SEPARATE BANK ACCOUNT: -

The buyback consideration shall be paid to the

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 shareholders from an exclusive bank account
opened for this purpose.

5 FILING OF SH-8 (LoO) + SH-9 (DECLARATION OF
SOLVENCY):
The Company shall file e-Forms SH-8, and SH-9
with the Ministry.
Only after filing the e-forms, the
company can proceed to dispatch the
letter of offer to the shareholders.

6 DISPATCH OF THE LETTER OF OFFER:

The letter of Offer shall be dispatched within 20

days from the date of filing the aforementioned e-
forms with the RoC.

7 PAYMENT OF CONSIDERATION: -

The consideration of the buyback of shares shall

be transferred to the shareholders bank account
within 7 days from the date of Board Meeting.

8 PAYMENT OF DIVIDEND DISTRIBUTION TAX -

As per the requirements of Section 115QA of the

Income Tax Act, the Company is liable to pay
dividend distribution tax at a rate of 20% on the
amount of distributed income (consideration paid
by the company for the purchase of its own shares
less sum received at the time of issue of shares).

The DDT has to be paid within 14 days from the

payment of consideration.

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9 EXTINGUISHMENT OF BOUGHT BACK SHARE -
CERTIFICATES:

The Share certificates which are bought back shall

be extinguished within 7 days from the last day of
the completion of the Buy back.
10 FILING OF INTIMATATION TO ROC ON THE -
STATUS OF COMPLETION OF BUY BACK OF
SHARES:

The Company is required to file intimations in e-

forms SH-11 along with the Form SH-15 within 30
days of completion of the Buy back.

11 CREATION OF CAPTIAL REDEMPTION RESERVE: -

A sum equal to the nominal value of the shares so

purchased through buy-back shall be transferred
to the Capital Redemption Reserve account.

12. DEBT EQUITY RATIO Debt Equity Ratio of 2:1 to be

Maintained

13. TIME GAP BETWEEN BUY BACK Minimum Time Gap Between Buyback
Is One Year
14. RESTRICTION ON ISSUE No Fresh Issue Of Similar Kind Of
Bought Back Securities Allowed For
Succeeding 6 Months.

***

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