When an "acquirer" takes over the control of the "target company", it is termed as Takeover.

When an acquirer acquires "substantial quantity of shares or voting rights" of the Target Company, it results into substantial acquisition of shares. The term "Substantial" which is used in this context has been clarified subsequently. A Target company is a listed company i.e. whose shares are listed on any stock exchange and whose shares or voting rights are acquired/ being acquired or whose control is taken over/being taken over by an acquirer. An Acquirer means (includes persons acting in concert (PAC) with him) any individual/company/any other legal entity which intends to acquire or acquires substantial quantity of shares or voting rights of target company or acquires or agrees to acquire control over the target company The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 has defined substantial quantity of shares or voting rights distinctly for two different purposes: I. Threshold of disclosure to be made by acquirer(s): 1) 5% and more shares or voting rights: A person who, along with PAC, if any, (collectively referred to as " Acquirer" hereinafter) acquires shares or voting rights (which when taken together with his existing holding) would entitle him to more than 5% or 10% or 14% shares or voting rights of target company, is required to disclose at every stage the aggregate of his shareholding to the target company and the Stock Exchanges within 2 days of acquisition or receipt of intimation of allotment of shares. 2) Any person who holds more than 15% but less than 55% shares or voting rights of target company, and who purchases or sells shares aggregating to 2% or more shall within 2 days disclose such purchase/ sale along with the aggregate of his shareholding to the target company and the Stock Exchanges. 3) Any person who holds more than 15% shares or voting rights of target company and a promoter and person having control over the target company, shall within 21 days from the financial year ending March 31 as well as the record date fixed for the purpose of dividend declaration, disclose every year his aggregate shareholding to the target company. 4) The Target Company, in turn, is required to inform all the stock exchanges where the shares of Target Company are listed, every year within 30 days from the financial year ending March 31 as well as the record date fixed for the purpose of dividend declaration. (II) Trigger point for making an open offer by an acquirer 1) 15% shares or voting rights: An acquirer, who intends to acquire shares which along with his existing shareholding would entitle him to exercise 15% or more voting rights, can acquire such additional shares only after making a public announcement (PA) to acquire at

least additional 20% of the voting capital of target company from the shareholders through an open offer. 2) Creeping acquisition limit: An acquirer who holds 15% or more but less than 55% of shares or voting rights of a target company, can acquire such additional shares as would entitle him to exercise more than 5% of the voting rights in any financial year ending March 31 only after making a public announcement to acquire atleast additional 20% shares of target company from the shareholders through an open offer. 3) Consolidation of holding: An acquirer who holds 55% or more but less than 75% shares or voting rights of a target company, can acquire further shares or voting rights only after making a public announcement to acquire atleast additional 20% shares of target company from the shareholders through an open offer. ACTIVITY SCHEDULE Sl. No. A B Activity Time Limit

Agreement for acquisition / decision to acquire MOU with a Category I Merchant Banker + Inform Stock Exchanges about agreement. Opening of ESCROW Account (latest) Opening of Special Depository Account Drafting of revised PA & Offer Document Submission of revised documents to SEBI Approval of SEBI Increase size of Escrow amount Release Revised Public Announcement (in all editions of one English national daily, one Hindi national daily & a regional language daily where Regd. Off. of the target Co. is situated) & at the place of the Stock Exchange where the shares of the Target Co. are most frequently traded. Submission of copy of published PA to (1) SEBI

X X

C D E F. G H I

X + 3 days X + 3 days

X + 4 days

X+ 4 days

(2) SEs where shares of TC are listed (3) TC for placing before Board Meeting K Submission of Draft Offer Document & Fees of Rs.50,000/- by way of DD payable at Mumbai, favouring SEBI. Submission of Draft Offer Document to Target Co. & Stock Exchanges Last date for competitive bid M Specified date for determining names of Shareholders entitled to receive Offer Document (latest date) Receipt of SEBI Observations Submission of Reply & SEBI clearance Printing N Despatch of Offer Document to shareholders (earliest date) Offer Document (latest date) to reach shareholders (X +4)+ 35 days(x+4)+14 +21=x+39 days (X +4) + 45 days (X +4) days + 55 (X +4) + 30 days (X +4)+ 14 days = x + 18 days (X + 4) + days 14

O P

Date of opening of offer (latest) Last Date for Revising Offer Price

Q R

Last date for withdrawal by shareholders Date of closure of offer

(X + 4) +72 days (X +4) + 75 days for (X +4) + 82 days (X +4)+ days (X +4)+ days 97

S T

Opening special consideration

Bank

Account

Completion of all formalities payment of consideration. Submission of Final Report to SEBI

including

120

Budget for the takeover Sl. No. 1 2 3 4 Particulars Amount (Rs.) Lead Managers fees SEBI filing fee (It is as per clause no.18(3) of Takeover Regulations, 1997). Advertisement expenses Printing of Offer documents (-------- *------) which includes transfer deeds, envelopes and overprinting on transfer deeds+VAT Postage for dispatch of Offer documents Postage Charges for dispatch of cheques/demand drafts to Shareholders who have surrendered their shares under Open Offer (-------*---) Processing fees payable to Registrars to the Issue Miscellaneous Expenses Total Expenses -----budget excludes the consideration payable to the

5 6

7 8

Note: The above shareholders.

Regulation 18(3) The acquirer shall, while filing the draft letter of offer with the Board under subregulation (1), pay a fee as mentioned in the following table, by bankers cheque or demand draft drawn in favour of the Securities and Exchange Board of India, payable at Mumbai: Offer size Less than or equal to ten crore rupees. More than ten crore rupees, but less than or equal to one thousand crore rupees. More than one thousand crore rupees, but less than or equal to five thousand crore rupees. Fee (Rs.) One lakh rupees (Rs. 1,00,000) 0.125 per cent of the offer size. One crore twenty five lakh rupees (Rs. 1,25,00,000) plus 0.03125 per cent of the portion of the offer size in excess of one thousand crore rupees (Rs 1000,00,00,000). A flat charge of three crore rupees (Rs.3,00,00,000).]

More than five thousand crores rupees