A presentation ‘Compromises, Arrangements & Amalgamations with Special reference to Protection of Minority & Dissenting Shareholders under Companies Act, 2013 ‘ given by Mr. Chander Sawhney at IICA
Section 230 to 233 of Companies Act, 2013
Procedure for Scheme of Compromise, Amalgamation and Arrangement.
Also it covers the newly introduced Sec. 233 of Companies Act, 2013 for FAST TRACK MERGER
The Companies Act, 2013 introduce the novel concepts fast track merger for Small Companies and Holding and its wholly owned subsidiary Companies. This is the first significant change to merger and amalgamations regime in the last six decades, with the previous Companies Act having been in place since 1956.
Companies Act, 2013 - ICSI Thrissur - Directors, Meetings, Public vs Private ...SASPARTNERS
This presentation is solely the effort of SAS Partners Corporate Advisors Private Limited, Chennai.
It gives an insight on the provisions and compliances relating to Public vs Private Company - Degree of Indifference, Directors, Meetings, Audit & Accounts, Role of Company Secretary and other new concepts which have been introduced.
This presentation will also act as a ready reckoner for practising and corporate professionals to have an access to easy first hand information and will help in better understanding of the law.
Section 230 to 233 of Companies Act, 2013
Procedure for Scheme of Compromise, Amalgamation and Arrangement.
Also it covers the newly introduced Sec. 233 of Companies Act, 2013 for FAST TRACK MERGER
The Companies Act, 2013 introduce the novel concepts fast track merger for Small Companies and Holding and its wholly owned subsidiary Companies. This is the first significant change to merger and amalgamations regime in the last six decades, with the previous Companies Act having been in place since 1956.
Companies Act, 2013 - ICSI Thrissur - Directors, Meetings, Public vs Private ...SASPARTNERS
This presentation is solely the effort of SAS Partners Corporate Advisors Private Limited, Chennai.
It gives an insight on the provisions and compliances relating to Public vs Private Company - Degree of Indifference, Directors, Meetings, Audit & Accounts, Role of Company Secretary and other new concepts which have been introduced.
This presentation will also act as a ready reckoner for practising and corporate professionals to have an access to easy first hand information and will help in better understanding of the law.
OBJECTIVE
Compromise and arrangement is a form of Corporate Restructuring where company enters into an agreement with its creditors or members to reorganise the capital structure of the company. The webinar covers the aspects of statutory provisions pertaining to compromise and arrangement under Companies Act, 2013 in detail along with judicial precedents.
The corporate landscape in Malaysia has been shaken up by the passing of the new Companies Act 2016. The Act came into force on 31 January, 2017, effectively repealing the Companies Act 1965. The series of slides provides you with the essential changes brought about by the new Act.
An easy way to find the new Companies Act, 2013 with its new and important changes..
Tried to made it maximum simple to understand..
The new legislation will create new avenues for Business and Professionals relating to this field..especially corporate law experts..
OBJECTIVE
Compromise and arrangement is a form of Corporate Restructuring where company enters into an agreement with its creditors or members to reorganise the capital structure of the company. The webinar covers the aspects of statutory provisions pertaining to compromise and arrangement under Companies Act, 2013 in detail along with judicial precedents.
The corporate landscape in Malaysia has been shaken up by the passing of the new Companies Act 2016. The Act came into force on 31 January, 2017, effectively repealing the Companies Act 1965. The series of slides provides you with the essential changes brought about by the new Act.
An easy way to find the new Companies Act, 2013 with its new and important changes..
Tried to made it maximum simple to understand..
The new legislation will create new avenues for Business and Professionals relating to this field..especially corporate law experts..
This presentation enumerates the practical aspects of merger, demerger and reduction of capital and the strategies involved therein. It also highlights certain key issues involved in corporate restructuring.
Appointment of directors and kmp under 2013 act https _www.icsi.edu_web_modu...
Similar to Compromises, Arrangements & Amalgamations with special reference to Protection of Minority & Dissenting Shareholders under Companies Act, 2013
An Overview of the Companies Amendment Act, 2017SAS Partners
The much awaited Companies (Amendment) Act, 2017 has seen the light of the day with the receipt of President’s assent on January 03, 2018. The Act is all set to address a wide number of practical difficulties which have been faced by various stakeholders.
Under the Companies Act, 2013 and its rules, numerous forms have to be filed by the company with the Registrar of Companies. We have prepared a note to help understand the requirement. Some of these forms are to be filed annually by the company and some of them are to be filed only once after the incorporation of the company, Some of the forms are filed when the event takes place, Failure to file these forms attracts heavy penalties.
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Disclosures in Board Report by Trupti Ranjan Mohanty.pptxssuser1b54031
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Objective and Agenda:
In order to bring flexibility and to monitor the activities of the charitable organisations in India, non-governmental organisations are given the corporate status by forming companies under Section 8 of the Companies Act, 2013. The scope of the webinar is to cover the objects of forming a Section 8 Company, procedure to obtain license, benefits of forming a Section 8 Company, conversion of Section 8 Company into any other company, effects of non-compliance of objects and the tax benefits available to such companies.
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Similar to Compromises, Arrangements & Amalgamations with special reference to Protection of Minority & Dissenting Shareholders under Companies Act, 2013 (20)
The presentation discusses various aspects of Corporate Governance and involved issues, keeping in view the recent developments and controversies arose in conglomerates such as Tata and Infosys. It aims at portraying the extant position in filed of Corporate Governance vis-a-vis a pragmatic view of what it would be.
A Presentation given by Mr. Pavan Kumar Vijay, Past President, ICSI, Chairman-Secretarial Standards Board
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Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on M&A Valuation and challenges at a Business Valuation Masterclass organised by VC Circle on 31st August, 2016. Corporate Professionals acted as the event supporting partner.
• In case of a merger valuation, the emphasis is on arriving at the relative values of the shares of the merging companies to facilitate determination of the swap ratio, hence, the purpose is not to arrive at absolute values of the shares of the companies. The key issue to be addressed is that of fairness to all shareholders. There are established legal precedence for merger valuation methodologies:
• Valuer’s role is to incorporate case specific factors and use appropriate methodologies so as to determine a fair ratio
• Usually, best to give weight ages to valuation by all methods
• Market price method and Earnings methods dominate.
• It is observed that in case of M&A, the Valuations depart from the concept of “Fair Value” as elements like Distress Sale, Desperate Buy, Comparable Transaction Multiples come into play reflecting Price than Value.
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
To know more about Our Valuation offerings and how we can help you, please visit us at www.corporatevaluations.in or download our Valuation profile @ http://www.corporatevaluations.in/VALUATION_PROFILE.pdf
Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on Relative Valuation - Techniques & Application at a Business Valuation Masterclass organised by VC Circle on 31st August, 2016.
Relative Valuation in which value of an asset or liability is done by comparing it to its Peers is pervasive and preferred for ascertaining Fair Value at a point of time as it reflects the market positioning of the Industry and Peers at that time. While Discounted Cash Flow (DCF) method is applied for arriving at Fundamental Valuation, most M&A transaction are based on Relative Valuation multiples (mostly Earnings based). The valuation ratio typically expresses the valuation as a function of a measure of Key Financial Metrics like PE, EV/EBITDA, EV/Sales or Book Value Multiple.
But before using a multiple, one should know the fundamentals determining the multiple and how changes impact it. Sanity check through use of fundamental valuation method like DCF is strongly recommended.
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
To know more about Our Valuation offerings and how we can help you, please visit us at www.corporatevaluations.in or download our Valuation profile @ http://www.corporatevaluations.in/VALUATION_PROFILE.pdf
Mr. Chander Sawhney, Partner & Head – Valuation & Deals, Corporate Professionals shared his thoughts as a guest Speaker on Valuation Principles & Techniques in Ind AS at a seminar organised by Gurgaon Branch of ICAI on 3rd September, 2016.
IndAS113 prescribes Fair Valuation definition, Techniques, Application and its Hierarchy. About 75% of the Balance Sheet Size is expected to change due to Fair Value Accounting (#IndAS109 #Financial Instruments, #IndAS102 #Share based payments, #IndAS16 Property Plant Equipments (PPE), #IndAS103 #Business combination etc. shall be impacted using #FairValue. Time to get ready, Plan Prepare and Align with the new requirements...
About Corporate Professionals Valuation Practice
Corporate Professionals Capital Pvt. Ltd. is a SEBI Registered (Cat-1) Merchant Banker and has a successful track record of providing a broad range of M&A and Transaction Advisory Services. Our Dedicated Team has more than 10 years of rich Valuation experience and we have executed more than 500 Corporate Valuations for clients of International Repute across different Context, Industries and Boundaries.
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The 2015 budget had long list of expectations. On one hand; the Government has addressed major issues surrounding the foreign investors which would certainly boost capital market inflows and revive the private equity industry (by deferring GAAR by 2 years and clarifying Permanent Establishment & Indirect Transfer of Assets). On other hand; it has just rationalized the subsidies. Probably as we see growth coming in and more job creation; subsidy burden can be better dealt with by the Government. Though there are no direct benefits for the middle class. However incentives have been introduced to encourage savings. These savings are expected to fuel the infrastructure and other investment plans laid out by the Government. Certainly Foreign investors have a reason to cheer for this Pro Business; Pro Growth Government budget.
Takeover Panorama, a Monthly Newsletter by Corporate Professionals on Takeove...Corporate Professionals
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-Unhide the hidden but important provision of the SEBI Takeover Regulations which generally get unnoticed on a plain reading of the regulations.
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Compromises, Arrangements & Amalgamations with special reference to Protection of Minority & Dissenting Shareholders under Companies Act, 2013
1. "It's all about where your mind's at"
Compromises, Arrangements & Amalgamations with Special
reference to Protection of Minority & Dissenting Shareholders
under Companies Act, 2013
2. Particulars
Pg. No.
What and Why
3
How under Companies Act, 1956
7
Paradigm Shift
12
Comparison between Companies Act, 1956
and
Companies Act, 2013
16
Issue and Impact analysis
23
Indian Institute of Corporate Affairs (IICA)
4. Tools of Re- structuring
TOOLS OF RESTRUCTURING
Merger /
Amalgamation
Demerger
Financial
Reconstruction
Acquisition of
shares
Consolidation of
businesses / entities
Divest non-core
business
Restructuring within the
Company
Acquiring interest in
new business/ entity
Deals with section 391- 394
Deals with section 395
NOTE –under Section 396 of Companies Act, 1956 Central Government may Amalgamate two
Companies in public interest
Indian Institute of Corporate Affairs (IICA)
5. Key Drivers for Re- structuring
Unlocking of Value and
its Sustainability
Restatement of Balance
Sheet
Business clarity to
Investors and Analysts
Improving Governance
Processes
Positioning the
businesses to be more
competitive
Making Businesswise
Fund raising possible
Business Risk
Management
Stock & Credit Rerating
Investor Relations
6. Regulatory aspects under various statues
Takeover
Regulations
Accounting
Competition
Commission
of India
Standards
(IFRS)
Companies
Act, 2013
SEBI and
Stock
Exchanges
Income Tax
(DTC)
Indirect Tax
(GST)
FEMA
Stamp Duty
Indian Institute of Corporate Affairs (IICA)
8. Procedure under Sec 391-394 of Companies Act, 1956
Procedure to be followed
Considering proposal for Merger and Amalgamation
Preparation of Scheme of Amalgamation , Valuation and Fairness Opinion (if Co.
is listed)
Approval of the Scheme by Board of Directors of the Companies
Filing of Scheme with the designated Stock Exchanges for SEBI approval, if Co. is
listed
Filing of Application in High Court
Convening of Shareholders and Creditors Meetings – decision reported to Court
Indian Institute of Corporate Affairs (IICA)
9. Procedure under Sec 391-394 of Companies Act, 1956
Procedure to be followed
Notice to Regional Director and Official Liquidator and submission of their NOC
with High Court
Final Hearing by High Court
Obtaining High Court Order and filing with Registrar of Companies
Annexing the copy of High Court order with Articles of Association
Post Merger compliances
Indian Institute of Corporate Affairs (IICA)
10. Regulatory Moves in case of restructuring
involves listed Company
SEBI
SEBI has also increase Transparency and more disclosure to protect the interest of
investors after 4th February and 21st May 2013 Circular
Valuation by independent chartered account mandatory other than those specifically exempted.
''Valuation Report from an Independent Chartered Accountant'' is not required in cases where
there is no change in the shareholding pattern of the listed company / resultant company.
As per SEBI circular, vote by public shareholder through postal ballot and E-voting is required in such
a case when additional shares have been allotted to promoters / promoter group, related party of
promoter, associates of promoters.
Indian Institute of Corporate Affairs (IICA)
11. Acquisition of shares (Section – 395 of Companies Act, 1956)
Section 395 is the only provision in the Companies Act that deals with the
compulsory acquisition of shares of minority shareholders.
When 9/10th Value of shareholder accept the offer of Acquirer Company
Acquirer company will give notice to Minority Dissenting Shareholders
The Dissenting Shareholder have the right either negotiate the term condition or
they have right to file their objection to Company Law Board
Wide powers of discretion have been conferred on the Company Law Board to
allow or reject an offer to squeeze out a minority group under section 395
Indian Institute of Corporate Affairs (IICA)
14. Modifications for Merger and Amalgamation
under Companies Act, 2013
Companies Act 2013
If Reduction of Capital is the part of Scheme then it has to be
disclosed to NCLT through affidavit
Notice of any meeting relating to any Compromise and Arrangement shall also
be given to CG, Income Tax Authorities, RBI, SEBI, Stock Exchanges, OL, CCI
for their representation
Representation has
to give within a
period of 30 Days
from the date of
receipt of letter
Notice of any meeting relating to any Compromise and Notice of the meeting will also
specify the impact of scheme on Creditors, KMP, Promoter, Non-promoters Members
Wider shareholder participation through voting by postal ballot possible
Only those shareholder’s can raise objection to the scheme who holds not less than 10% of the
shareholding
Indian Institute of Corporate Affairs (IICA)
15. Modifications for Merger and Amalgamation
under Companies Act, 2013
Companies Act 2013
Only those creditors can raise objection to the scheme who holds 5 %
of the total outstanding debt
The tribunal may provide the order for Exit option to dissenting shareholders
based upon the valuation by Registered Valuer
In case of buyout of a company when the majority holding ≥ 75 negotiate secretly for a
higher price then such gain shall be shared with the minority shareholders on pro-rata basis
Creditors meeting not required if > = 90% in value agree and confirm by affidavit
Titled of Single window clearance has been taken off in case of Buy Back of shares (including
cooling period of one year)
Takeover through scheme of arrangement allowed in accordance with regulations to be framed by
SEBI
Certificate from Statutory Auditor that accounting treatment complies with prescribed accounting
standards (Currently applicable to listed Companies)
17. Cross Border Mergers
Companies Act 1956
Permits
only
inbound
Companies Act 2013
foreign
Permits
outbound
mergers
i.e.
amalgamation of Indian companies
with Foreign companies
company mergers
Requirements relating to inter alia
notified
foreign
jurisdiction
and
compliance with prescribed rules
applicable to inbound as well as
outbound merger
Scope of inbound mergers may get
restricted to notified jurisdictions
Indian Institute of Corporate Affairs (IICA)
18. Demergers
Companies Act 1956
No
Companies Act 2013
Demerger defined to mean a demerger
specific
demerger
definition
under
the
of
a
current
Companies Act
Also, no prescribed accounting
treatment
for
as per Income-tax Act, 1961
Accounting treatment for demerger also
now prescribed
Such
recording
accounting
treatment
applicable till the date of notification
demergers
of the relevant AS
Consistency
with
Income
tax
definition?
Revaluation reserve beyond two
years allowed under the draft rules
Indian Institute of Corporate Affairs (IICA)
19. Treasury Shares
Companies Act 2013
Companies Act 1956
Prohibits
On merger of wholly or partially
owned subsidiary with its parent,
new shares in lieu of shares held
by parent itself may be allotted to a
trust which will hold such shares
for parent’s benefit
companies
from
holding
shares in the name of trusts either on
its
behalf
or
on
behalf
of
any
subsidiaries or associate companies
on corporate restructuring
Negates the advantage available
earlier to the company to indirectly
hold such shares to provide access
to liquidity
Would existing trust structures be
grandfathered?
Indian Institute of Corporate Affairs (IICA)
20. Merger of listed company with unlisted company
Companies Act 2013
Companies Act 1956
On
merger
of
listed
unlisted
company,
company
shall
company
until
company
the
remain
it
with
transferee
an
unlisted
becomes
a
exit
listed
route
company
No specific provisions governing
merger of listed company with
unlisted company
Provision
for
an
for
shareholders of the transferor company
Payment of value of shares and other
benefits
in
determined
accordance
price
formula
with
pre-
or as
per
prescribed valuation
Indirect way of minority squeeze-out /
delisting?
Impact
on
amalgamation
tax
if
neutrality
more
than
shareholders opt for exit route?
Indian Institute of Corporate Affairs (IICA)
of
25%
21. Exemption from court process
Companies Act 2013
Companies Act 1956
Option to following companies to undertake
corporate
reorganizations
like
amalgamation, demerger, etc. without Court
process
Between two or more small companies as
No provisions for exemption from
court
process
for
defined in the Cos Act 2013. Small co. is
corporate
reorganisations
private co. having capital <50 lacs or
like
turnover <2cr.
amalgamation, demerger, etc
Between holding company and WOS
Other prescribed class of companies
Procedure involves
Notice of the meeting to be sent to
Registrar and Official Liquidators inviting
suggestion / objections to scheme
Approval from >=90% shareholders and
>=90% of creditors (value)
Representation of approval not required
Indian Institute of Corporate Affairs (IICA) (RBI, Income Tax etc)
22. Rehabilitation of Sick Companies
All the Companies, whether Industrial Company or not, are covered
now
Criteria for erosion of 50% Net Worth erosion knocked off
Power has been entrusted with Secured Creditors, representing 50%
or More of the Debt of the Company.
Net Worth (old law )Vs Repayment of debt(New law ), Provisions of
new Act are on lines with Chapter XI of US Bankruptcy Law
Introduction of “Rehabilitation and Insolvency Fund”
Indian Institute of Corporate Affairs (IICA)
23. Issue and Impact Analysis
Indian Institute of Corporate Affairs (IICA)
24. Issues
Due to Involving of so many authorities the speed of Compromise Arrangement
may effect,
In case of fast track merger approval required form Members holding 90%
Shares and Creditors holding 90% in value, this may be difficult,
Other statutory regulations need alignment;
Income Tax
RBI
SEBI
FEMA
Accounting Standards
Delisting regulations
Indian Institute of Corporate Affairs (IICA)
25. Impact
Internal Restructuring will increase due to separate provision for Small
Companies (Only Private Companies) and Holding and Wholly Owned
Subsidiary Company under Fast Track Merger,
Only relevant issue on Compromise and arrangement will be raised due to
prescribed limit for objecting the Scheme,
Dissenting shareholder will easily exit the Compromise and Arrangement,
There will be more Cross – Border Transaction in form of Merger and
Amalgamation
Role of other authority like Income Tax, RBI etc becomes important,
Indian Institute of Corporate Affairs (IICA)
26. That is what learning is, you suddenly
understand something you have understood
all your life, but in a new way
…………………………….. Doris Lessing
Indian Institute of Corporate Affairs (IICA)
27. Chander Sawhney,
Vice President
Corporate Professionals Capital Pvt. Ltd.
SEBI registered merchant banker
Email : chander@indiacp.com
Mobile: 9810557353; Direct: 40622252
www.corporateprofessionals.com;
D-28, South Extension, Part-I, New Delhi-110049