Strictly private and confidential

DELISTING REGULATIONS IN INDIA

Mr. Sanjay Asher, Partner M/s. Crawford Bayley & Co. Advocates and Solicitors

Substantive Law
Delisting in India
In force from 10th June 2009 Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 (SEBI Delisting Regulations)
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In force from 2003 until 10th June 2009 Securities and Exchange Board of India (Delisting of Securities) Guidelines, 2003

M/s. Crawford Bayley & Co.

Applicability of the SEBI Delisting Regulations

Applies to delisting of equity shares of a company from all or any of the recognized stock exchanges where such shares are listed. Not applicable to delisting made:  pursuant to a scheme sanctioned by the Board for Industrial and Financial Reconstruction under the Sick Companies (Special Provisions) Act 1985; or  National Company Law Tribunal under section 424D of the Companies Act, 1956, subject to conditions.
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Conditions for Delisting

Delisting not Permissible if

Pursuant to a buy back of equity shares by the company

Pursuant to a preferential allotment made by the Company

Company not listed for 3 years on a recognized stock exchange

Instruments convertible into equity shares sought to be delisted are issued by the company
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M/s. Crawford Bayley & Co.

DELISTING
VOLUNTARY COMPULSORY SMALL COMPANIES BY OPERATION OF LAW
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Voluntary Delisting
Recognized stock exchanges having nationwide terminals where equity shares of the company are listed (RSE)

Delisting from all RSE

Delisting on one or more RSE and remaining listed on at least one RSE
NOT REQUIRED
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REQUIRED

Exit Opportunity to public shareholders

M/s. Crawford Bayley & Co.

No Exit Opportunity - Procedure

Prior approval of board of directors Application to RSE for delisting

Delisting to be disclosed in the 1st annual report of the company after delisting

Public notice in English Hindi & vernacular newspaper

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Exit Opportunity - Procedure

Prior approval of board of directors Prior approval of Shareholders (Postal Ballot) In-principal approval from RSE Appointment of intermediaries Open Escrow Account and deposit money Public Announcement (PA)
M/s. Crawford Bayley & Co.

Letter of offer

Offer open and Close (Book Building) PA for closure and payment of consideration
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In at least one English, Hindi & vernacular newspaper

Shall contain all Material information Specified in Schedule I Of the SEBI Delisting Regulations

PUBLIC ANNOUNCEMENT

Specified date for sending Letter of Offer to Shareholders (30 days from date Of PA)
M/s. Crawford Bayley & Co.

Promoter and Merchant Banker responsible for complying with SEBI Delisting Regulations
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Letter of Offer
Promoter to dispatch Letter of Offer no later than 45 working days from date of PA. Letter of Offer to be sent to all public shareholders whose names appear on the register of the company or depository on the specified date. Letter of Offer shall contain all disclosures of PA and such other information as may be necessary. Letter of Offer to be accompanied with bidding form and a form to be used for tendering shares.
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Bidding Period
The date of opening of the Offer shall not be later than 55 days from PA. Offer to remain open for minimum 3 working days and maximum 5 working days. Bidding to take place by a book building process as specified in Schedule II of the SEBI Delisting Regulations. Promoter and persons acting in concert not to participate.
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Determination of floor price

FLOOR PRICE FREQUENTLY TRADED SHARES INFREQUENTLY TRADED SHARES

Price determined on Parameters Average weekly high and low - Highest price paid by Promoter during the 26-week preceding during 26 week period preceding the date of notification to RSE the date of notification to RSE -Others like net worth, EPS, book value of shares M/s. Crawford Bayley & Co. 12

Public Announcement
Letter of offer to be filed no later than 45 days from date of PA

Time Lines for Delisting

Offer to open no later than 55th day from the date of PA Offer to remain open for minimum 3 and Maximum 5 Days

Public announcement within 8 days of closure of offer

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Role/rights of promoters under the SEBI Delisting Regulations

Dos:
Not bound to accept equity shares at offer price determined by book building; Comply with SEBI Delisting Regulations and other laws.

Donts:
Employ funds of the Company to finance an exit opportunity; Fraud, artifice to fraud, deceit, manipulative polices upon any shareholder or in connection with delisting.

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Compulsory Delisting
COMPULSORY DELISTING
Order passed by RSE under section 21A of the Securities Contracts (Regulation) Act, 1956 Order passed by panel constituted by RSE

Appoint independent valuer for determination of fair value of equity shares Notice by RSE in newspapers and intimate other RSE Company, promoters, whole-time directors and companies promoted by the promoters debarred from accessing (directly/ indirectly) securities market or seek listing for a period of 10 years from date of such delisting
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Delisting of Small Companies

Small company means:  Company that has a paid up capital upto Rupees One Crore and its equity shares are not traded on any RSE in 1 year immediately preceding the date of decision of delisting; and  Company that has 300 or fewer public shareholders and where the paid up value of the shares held by such public shareholders in the company is not more than Rupees One Crore
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Fulfillment of Conditions by Small Companies for Delisting

 Fulfillment of all requirements of Regulation 8 (see slide 8). Appointment of a Merchant Banker and determination of exit price. Promoters to write to public shareholders individually.   Positive consent in writing of 90% of the shareholders. Promoters completes the process of inviting positive consent and finalization of delisting proposal within 75 working days of communication to public. Promoters to make payment of consideration in cash within 15 working days from date of expiry of the 75 working days.

Exit price offered to shareholders not to be less than as determined by Merchant Banker. M/s. Crawford Bayley & Co.

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Delisting by Operation of Law

WINDING UP OF COMPANY DE-RECOGNITION BY SEBI

Delisting in accordance with laws applicable to winding up

Order may be passed by SEBI in respect of status of equity shares of the company

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Thank you

M/s. Crawford Bayley & Co.

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