Mergers &

Acquisitions
Current Scenario and Way Ahead

Precedents

Takeover of Ashok leyland by Hindujas

Chabbria group took over Falcon tyres
Ceat tyres taken over by Goenkas
Pepsi & Coke taking over Parle and Indian soft drink companies
Take over of Tetley by Tata Tea.
Grasim acquired UltraTech through a Swap
Tata Motors acquisition of Daewoo
Jindal Vijaynagar steel merged Euro Iron & steel, Euro energy and
JSW Power
ITC, Somani group through BIFR.
Recently Vijay Malaya took over Shaw Wallace

Why M & A

Horizontal growth for enlarged markets & optimum utilization

Vertical combination to economize cost and reduce tax burden
Diversification of Business
Combination of management, financial and human resources.
Synergies
Improve dividend yield, earnings, book value of entities and cash
flow of the entities.
Attraction to foreign investors
Financial Restructuring and
Tax Planning

Terminologies

Blending of two or more existing undertakings: Amalgamation

Sale of business
- As a going concern Slump Sale
- Individual assets - Itemised sale
Merger / Amalgamation of existing business Merger
Sell to a subsidiary Subsidiarisation
Demerger
Secondary market / negotiated purchase of shares Share
Purchase
Issue of fresh shares (preferential issue) Fresh Issue .

Current Scenario

Revival in deal activity in the country

More than double the transactions in first five months as
compared to same period last year

No of deals
Value of deals

Jan May 10

Jan May 09

439

179

USD 30 bn

USD 8 bn

Rebound linked to recovery of Indian and global economy

Active sectors Telecom, Pharma, Cement, FMCG

Mergers & Acquisitions

Mergers & Acquisitions

Top 5 M&A Deals - 2009

Top 5 M&A Deals - 2008

Mergers & Acquisitions

Mergers & Acquisitions

Private Equity

10

Private Equity
Top 5 PE Deals - 2009

Top 5 PE Deals - 2008

11

Private Equity

12

Private Equity

13

Positive Trends

Market in favour of consolidation

Higher degree of homogeneity across markets due to globalization

Marginal costs of set up in new markets

Brand identity recognizable across markets

Market dynamics favour fewer players economies of size and

scale

Recent examples Bharti Zain, GTL Tower deal

14

Positive Trends

Flexibility and pragmatism demonstrated by Indian Promoters

Promoters recognise strengths and weaknesses and willing to adapt

No stigma attached to alienation of stake in companies

Ability to gauge time to encash vs carry on

Recent examples Ranbaxy, Piramal, Wockhardt, Tata Docomo

15

Positive Trends

Availability of credible information

Reliable standards of accounting transition to IFRS

Higher levels of transparency and corporate governance

Breadth and depth in the financial sector

Increase in number of players in the financial intermediary market

Emergence of investor classes with different risk appetites

Angel investors, VC, PE, FIIs, Domestic cos, Foreign cos, Retail investors

16

Positive Trends

Certainty in regulatory framework

Clarity in tax provisions relating to slump sale

Incorporation of M&A provisions in direct and indirect taxes

17

Roadblocks

Positive trends yet to achieve full potential

Greater flexibility to be shown by Indian promoters

Need for consolidation not fully recognized

Grey areas in regulatory framework

Lack of clarity on stamp duty liability

80IA provisions not conducive to mergers and acquisitions

18

Roadblocks

Restrictive foreign exchange controls and listing norms

Direct listing of Indian shares on foreign exchanges not allowed

Indian companies not allowed to merge with foreign companies

Foreigners individually not permitted to invest in Indian shares

Restricts usage of Indian shares as currency for deals

Increasing protectionism

Governments keen on retaining national identity of iconic companies

Increasing use of capital controls to regulate flow of foreign capital

19

Roadblocks

Accounting for M&A under IFRS

Appointed date of merger vs actual date of merger

Purchase method of accounting valuation of intangibles and off

balance sheet items and residuary goodwill

Marked departure from Indian GAAP no comparability pre and post IFRS

Capital Reserve vs Credit to P&L A/c MAT impact

Demergers to be treated as non-cash dividend change in

accounting for transferor

IFRS to apply to top 50 companies different norms applicable to

different companies at same time

20

Wishlist

Certain shortcomings in IFRS to be addressed

Few norms contribute to volatility and subjectivity in fin statements

Accounting for FCCBs

Lease Equalization vs Inflation

Fair degree of subjectivity in fair valuation norms

21

Wishlist

Regulations to encourage cross border M&A

Indian companies to be allowed to merge with foreign companies

Capital controls to be lifted on the Indian rupee

Listing on foreign exchanges to be allowed and vice versa

Permit accounting and reporting in functional currency

22

Wishlist

Rationalization of tax provisions

Tax liability only on encashment - not on exchange or conversion

Tax benefits to continue in case of mergers

Clarity on treatment of depreciation post transaction

Introduction of group relief

Introduction of anti-abuse provisions like CFC and thin

capitalization rules

As opposed to current anti-abuse norms prescribed in DTC

23

Wishlist

Better protection of minority rights in corporate law

Strengthen norms on independent directors and corp governance

Suitable amendments in listing agreement

Provisions to eliminate conflicts of interest in cases where

management also holds majority shares

24

Corporate Restructuring -- Necessity

Companies worldwide are refocusing, downsizing and merging
to become globally competitive.
Developing core competence for global / domestic competition,
technological development through collaboration and joint
venture
Divesting non profitable business

Crystal Clear
Items

Reconstruc Amalgamati
tion
on

Meaning Winding
/ Nature up an
existing
co. & its
transfer to
a new co.
in its place
Share
New Cos
holding remain
pattern substantial
ly same

Full/partial
transfer of
one/more
cos to
another
including
merger
Same
shareholders
but different
rights

Merger

Acquisition
& takeover

Dissolving
one/ more
entities to
form or get
absorbed
into
another co
Same
shareholde
rs different
rights

Transferor
sell outright
on a going
concern
basis with
all its worth
Form and
nature can
change
substantially

Restructuring

Restructuring

Mergers/
Amalgamation

Demerger /
Spin off

Subsidiary

Sale as a
going concern- Itemized
Slump
sale
sale

Stock
sale

Amalgamation
Shareholder X

Shareholder Y

Shareholders X & Y

Company X Ltd..

Company Y Ltd..

Company XY Ltd.

Cement Unit

Cement Unit

Cement Unit

Merger of one or more company into another or merger of companies to form

another company provided
75% in value of the shareholders of amalgamating company must become shareholders
of the amalgamated company (Sec 2(1B))

Amalgamation - Direct tax neutralized

No income to amalgamating company/shareholders on the transfer of business
undertaking/receipt of income. (Sec 47(vi))
Depreciation to amalgamated company on the basis of tax w.d.v in the hands of
the amalgamating company (Explanation 7 to Sec 43)
Accumulated losses and unabsorbed depreciation of amalgamating company can
be carried forward by the amalgamated company if specified conditions are
fulfilled. (Sec 72A)

Tax Consequences On Companies

Income/
Capital

Loss transferred w.e.f

Appointed date

Gains:

To Transferor

NIL

To Shareholders

NIL

Depreciation

basis for:

Transferee

Existing w.d.v

Transferor

Remaining w.d.v

Quantum

Prorated

Tax Consequences..Contd
Tax

incentives of undertaking

Subsequent
Holding

B/f

Expenditure

Continue

Allowed

Period benefit

For Asset Transferred Continue

For resulting shares

Continue

- carried forward

Depreciation

Loss

Allowed

Allowed

Cessation

of liability Taxed

Expenses

on process

Deductible

1/4/81 Option

Amalgamation.. .Issues

shareholding criteria to be applied in respect of shares

held as on Appointed date or Effective date?

43B payment by amalgamated Company

Credit in respect of MAT paid by amalgamating Company

Depreciation on cost or WDV 43(1) vs 43(6)

Whether succession to business

Transaction between holding & subsidiary in the intervening

period

Dividend distribution tax paid

Tax implicationsc/f and set off of

losses u/s 72A

Conditions prescribed: For Amalgamating Co.

Has been engaged in business in which accumulated losses

occurred/depreciation remained unabsorbed for 3 or more
years

Has held continuously as on date of Amalgamation 3/4 of

book value of fixed assets held by it 2 years prior to date of
Amalgamation

For Amalgamated Co:

Holds continuously for 5 years 3/4 of book value of fixed

assets of Amalgamating co.

Continues business of Amalgamating co. for 5 years

Fulfill conditions prescribed under Rule 9C

Tax implicationsconditions under

Rule 9C in case of Amalgamation
Conditions prescribed under Rule 9C

Amalgamated Co. to achieve production level of 50% of

installed capacity of undertaking of Amalgamating Co. before
end of 4 yrs & continue to achieve it till the end of 5 yrs

Amalgamated Co. to furnish a CA report to AO in Form No. 62

along with ROI for AY in which above condition is satisfied
and for subsequent AY falling within 5 yr period

Demerger...
Promoter - 40%

Public - 60%

Company(DC)

Cement Unit

Steel Unit

Promoter - 40%

Public - 60%

Company (DC)

Company(RC)

Cement Unit

Steel Unit

Transfer of business undertaking as a going concern by one company (DC) to

another company (RC) pursuant to a court Scheme subject to fulfillment of following
conditions (Section 2(19AA))

All properties and liabilities of the business undertaking are transferred at

book values;

Shares of the RC are issued to the shareholders of the DC on a proportionate

basis;

Shareholders holding not less than 75% in value of the shares of the DC
become shareholders of the RC;

Demerger ...
Demerger - Direct tax neutral for company/shareholder.

No income to DC on transfer of undertaking (Section 47(vib))

No income to shareholder on receipt of shares in RC (Section 47(vid))

Proportionate depreciation in the year of demerger. Depreciation to RC

on the basis of tax W.D.V. in the hands of DC.[explanation to Section
43(1)]

Accumulated business losses and unabsorbed depreciation (Section

72A):-

directly relatable to the demerged undertaking - allowed to be carried

forward by RC

not directly relatable to the demerged undertaking - to be apportioned in

the ratio of assets transferred to RC and assets retained by DC

Demerged business undertaking eligible for most tax exemption benefits available even as part of RC (deduction u/s 80IA, 80IB
available for unexpired period to resulting Co.)

Demerger.. .Issues

shareholding criteria to be applied in respect of shares

held as on Appointed date or Effective date?

Transactions between holding & subsidiary Company during

Appointed date & Effective date?

Dividend declared - DDT

43B payment by resulting Company

Whether succession to business

What happens if conditions for demerger are not satisfied

Demerger.. .Tax consequences if conditions

of demerger not satisfied

Capital gain to transferor / shareholder

Deemed dividend to shareholder dividend distribution tax

Section 72A not applicable

Depreciation to transferee on consideration paid

Cost of shares issued to shareholders of demerging

company

Subsidiary
Promoter - 40%

Public - 60%

Public - 60%

Company X Ltd.
Cement Unit

Company X Ltd..

Cement Unit

Promoter - 40%

Steel Unit

New Company Y Ltd..

Steel Unit

Transfer of undertaking to WOS for a consideration

Direct Tax - Transaction is tax neutral subject to a lock-in period.
(Section 47A )
No capital gains to the holding company (Section 47(iv))
Depreciation to subsidiary on the basis of the written down value
for the holding company (Explanation 6 to section 43)
Two layers of Dividend distribution tax

Slump Sale
Promoter - 40%

Public - 60%

Company X Ltd..

Cement Unit

Promoter - 40%

Public - 60%

Y Ltd..

Company X Ltd..

Steel Unit

Cement Unit

Steel Unit

Transfer of business undertaking as a going concern for lump sum consideration without
values being assigned to individual assets and liabilities.(Section 2(42C)
Transferor Company

Transferor Company liable to short/long term capital gains (holding period 36

months)(Section 50B)
Capital gains computed by deducting net worth from the sale consideration

Step up of Depreciation - possible as transferee entitled to depreciation on the cost of

assets.(Section 32 & 72) Valuation of assets required

Slump sale.. .Issues

Contingent consideration tax implications to

purchaser/seller

Negative net worth capital gain?

Depreciation to purchaser on cost impact of 5th proviso

to section 32

Tax liabilities of predecessor Sec 170

Approval u/s 281 practical difficulty

Stock Sale

Liable to long term capital gains depending on the period of

holding (holding period 12 months)

In case of shares listed on a recognised stock exchange in

India
Subject to securities transaction tax instead of Capital gains tax
Deduction under section 88E of STT available if income under
PGBP' includes any income from taxable securities transactions

Stock Sale.. .Issues

Interest deduction of acquisition cost

Tax liabilities of predecessor Sec 170

Approval u/s 281 practical difficulty

Itemized Sale

Sale on the basis of value being assigned to a separate item.

Transferor liable to short/long term capital gains depending on

the nature of asset & period of holding

Depreciable asset-Short term capital gain

Non depreciable assets

For stock-Long term if held for a period > 12 months
For others-Long term if held > 36 months

Depreciation to transferee on cost opportunity to claim step up

depreciation

Itemized sale.. .Issues

47A No step up when holding Co. pays tax

Tax liabilities of predecessor Sec 170

Approval u/s 281 practical difficulty

Considerations

Legal Aspects:

Finance Aspect:

Companies Act, 1956

MRTP Act
Industrial Development & regulation Act
Sick Industrial (special provisions) Act
SEBI Regulations
Synergy
Valuation of firm DCF / APV

Taxation Aspect: I.T.Act, 1961

Accounting Aspect: AS 14
Procedural Aspects Scheme of Amalgamation

Legal Aspects I

Companies Act, 1956: Sections 391 to 396

An application to be made to the court along with
scheme of amalgamation, companys final accounts.
Court has powers to supervise and modify the
structuring of the scheme. Court can order a meeting of
shareholders, members as it deems fit.
If a majority of such a meeting consents and the
scheme is sanctioned by court, file it with registrar.
Court can order for merger of 2 cos. In public interest
In case of court merger, the transferor co. will be
dissolved without winding up whereas in acquisition, the

transferor co. continues to exist.

MRTP Now Competition Act:

Power retained with the government to order discontinue or restructuring of such

combination agreement as would obtain dominant position.

legal Aspects II

Industrial (Development And Regulation Act):

Sick Industrial (Special Provisions) Act:

High court can order to appoint anyone to takeover the management of the
entity for running or restarting.
License of the amalgamating co. shall automatically be transferred to
amalgamated co.
Not applicable to non-industrial co.and small scale or ancillary undertaking.
Section 18 empowers BIFR to sanction the merger of a sick co. with
another co. & vice versa considering the employees views.

SEBI:

Regulation 3 of SEBI regulations provides for the non applicability of

takeover provisions to Amalgamations effected u/s 391 to 394 of
companies act and Sick Industrial units u/s 18

Finance Aspect

Returns>cost

Synergy is the economic value of benefits arising out of Amalgamation.

Synergy = VAB (VA + VB) Hence, it signify the difference between combined
value and individual values of entities.

Synergy can be a vital but a sole determinant of Amalgamation. Post merger

integration, managerial talent can result in abnormal returns.

Valuation of the transferor entity can be done by DCF Methodology i.e.

discounting the estimated future cash flows of entity (less) value of debt and
other obligations as estimated.

An alternative approach to value target co. can be APV:

Value the company as if it were financed entirely with equity.
Estimate the value of financing side effects like tax shields etc
Add the two to arrive at APV.

Taxation Matters

Transferor Company can claim Capital gains exemption u/s 47(vi)

WDV of depreciable assets of transferor co. as on the appointed day to be added to the
respective block of transferor co. Other Assets can be taken at actual cost Expl (2) to
Section 43(6)( C).

Depreciation claim to be split up between both cos. as per number of days

Only accumulated business loss & unabsorbed depreciation can be transferred. Capital
loss to lapse. Transferee co. should be an Industrial undertaking, Shipping Company,
Hotel or a Bank to claim benefits.

Tax benefits u/s 10A,10B,80IA,80IB shall be available continuously.

Amalgamation expenses can be claimed as deduction equally over 5 years period.

No transfer for shareholders of transferor Co. hence no tax liability. Period for which
shares are held in transferor co. to be considered for indexation .

Tax issues Mapped

For Transferor

Carry forward of loss / depreciation

Capital gains tax.
Transfer pricing.
Tax avoidance device
Business closure
Diversion of income at source.
Depreciation.
Tax impact of alternate funding.
Staggered consideration.
Capital receipt.
Chapter XXC - Allocation of common assets / liabilities.

Tax issues Mapped

For Transferee
Carry forward of loss
Production / asset holding criteria.
Depreciation on tangible / intangibles.
Tax credit under MAT.
Deduction for 43B liabilities.
Deduction for liabilities of predecessor / remission of liabilities.
Cost of acquisition / fair market value.
Continuity of tax exemptions / deductions.
Restatement of value.
Succession of business.

Tax issues Mapped

For Shareholders
Deemed dividend
Capital gain / loss
Consideration in kind / staggered consideration.
Short term / long term capital assets
Cost of acquisition
Transfer pricing
Treaty protection
Foreign tax credit
Underlying tax credit
Tax sparing on exempt income
Tax avoidance

Long term tax Objectives

Reduce Dividend distribution tax
Opportunities to utilize losses.
Step up of tax depreciation base.
Reduced administrative cost.
Transfer pricing asymmetry.
Flexibility of allocating common expenses.
Impact on quantification of tax incentives.
Possibility of depreciation on intangibles
Mitigation of minimum alternate tax.
Impact on tax incentive of change in holding / migration of business.
Tax optimization by alternate funding methods.

AS 14 : Accounting Interpretations

Applicable for Amalgamation as defined in Companies Act, 1956. Not applicable for other
ways of reconstruction, takeover.

AS 14 to be followed only for accounting in books of transferee co. For transferor Co.
has to be as per common principles.

Consideration includes shares, securities, cash and other assets by means of which
obligation is discharged.

Amalgamation in nature of merger: Pooling of Interest

All Assets and liabilities of transferor taken over by transferee Co.

Consideration paid in equity shares except for fractional shares
Business of transferor co. to be carried on by transferee Co.
Shareholders of at least 90% or more in the transferor Co. to become shareholders in transferee co.
The Assets and Liabilities to be taken over at book values without making any adjustments by way of
revaluation or otherwise.

Amalgamation in nature of purchase: Purchase method

If any of the conditions regarding amalgamation in nature of merger is not satisfied.

Accounting Methods
Purchase Method
Pooling of interest

In the Financial statements post

Amalgamation, line by line addition of
all assets and liabilities of all entities
except share capital.
Any Excess realised / loss suffered to
be adjusted by reserves.

For statutory reserves open

Amalgamation adjustment a/c.

Amortize goodwill arising out of such
events over 5 years.

Assets and liabilities to be recorded in

the books at the value at which they
are taken over by the transferee co.
Any surplus over net assets to be
debited to goodwill and loss suffered to
be credited to capital reserve.
Reserves and surplus shall not be
transferred to the purchasing co.
Treatment of statutory reserves and
goodwill shall remain same as in
pooling of interest method.

Scheme of Amalgamation or Merger

No prescribed format for a scheme and is designed to suit terms

and conditions relevant to proposal
Provision for vesting the assets and liabilities of transferor co.
should be clearly defined. If transferee co. does not want to
takeover any item, should mention it specifically.
Define the effective date from which the scheme is intended to
come into operation.
Valuation of the shares to decide the exchange ratio. The method
has to be appropriate and acceptable to majority.
Position of employees has to be clearly set out with a specific
mention of transfer of employees at same terms and conditions.
The application for merger can be made by the company,
members, creditors or liquidator.

Acquisitions and Takeovers

It is the purchase of one of the business as a going concern / acquisition of

controlling interest in it in a friendly or a hostile way.
Takeover by reverse bid wherein a smaller co. gains control of a larger co.
Buy out is the acquisition by incumbent management of the business where
they are employed. Full buy out is still a concept popular in OECD countries.
Direct negotiations / acquisitions of shares are the most common ways of
takeover in India
No one shall acquire shares/voting rights of entitlements of over 15% without
Public Announcement as prescribed by SEBI.
Guidelines for takeovers are embodied in clause 40B of the Listing Agreement
of SEBI
Tax shield for unabsorbed losses and depreciation u/s 72A can be
exploited through Acquisitions

58

Accounting Implications
Valuations
Share Exchange Ratio

10/03/16

Accounting Implications

Accounting Standard 14- Pooling of interest method

- Purchase method

59

Accounting implications

60

Amalgamation Accounting
-

conflict of accounting policies

uniform set of accounting policies

Change in accounting policies reported in accordance with

AS-5

Accounting implications

Treatment of Reserves
- merger accounting identity of Reserves
- purchase accounting net assets value consideration
= reserve
(Statutory reserve to be
preserved)
- Treatment of goodwill
- implication of AS-26 Intangible asset
- Balance in Profit & Loss A/c

61

Accounting Implications

Disclosure
(a) particulars of amalgamating companies
(b) effective date of amalgamation for accounting purpose
(c) method of accounting (pooling vs purchase)
(d) particulars of the Scheme
(e) description and number of shares issued
(f) exchange
(g) treatment of difference

62

Valuation and determination of Share

Exchange
ratio
Valuations
- CA Valuations
- Merchants Bankers Review
- No two valuations are likely to be identical
- fairness
- a matter of opinion

63

Valuations

Book value method net assets method

Market value method

Profit earning capacity method OR yield method

future maintainable profits
DCF method

Appropriate weightage

Average of the three methods

64

Valuations
Who can object to Valuation

65

Members

Creditors

ROC

Employees

Share Ratio

66

Share Exchange Ratio

- in the case of amalgamation
Share entitlement Ratio
- in the case of demerger/arrangement
Reduction of share face value in transferor Co. and issue of shares
for the reduced value in transferee co.

Share Ratio

67

Court not to interfere with share exchange ratio

Public interest
Movement in market price during the intervening period not material
Share exchange in the case of holding and subsidiary co
amalgamation
Extinguishment of intercompany shareholding
Trust holding
Method of valuation and resultant share ratio to be mentioned in
explanatory statement

Share Ratio

No necessity that equity to be exchanged for equity

Equity can be exchanged for preference shares as option to

shareholders

Shares to be live during the intervening period from appointed date

to record date (after effective date)

68

Demerger

No specific accounting standard

AS 14 by and large applies

Valuation on the basis of identifiable business

Share entitlement ratio

Shares of demerging Co. not to be extinguished

69

Amalgamation Accounting
an Illustration

Hind lever Chemicals Ltd. (HLC) with Tata Chemicals Ltd (TCL)

HLC bulk chemicals & fertilizers

TCL - Chemicals & fertilizers

Scheme operative from 01-April-02

Bombay High Court sanctioned TCL scheme on 14-Oct-03
Punjab & Haryana High Court sanctioned HLC scheme on 19-May04

Effect given in 2003-04 accounts of TCL

70

Illustration - Merger of HLC with TCL

Notes to the Balance Sheet & P&L account of TCL 31.03.04

6) Scheme of Amalgamation
(a) understanding of HLC has been transferred to and
vested into TCL retrospectively from 1st April 2002 (the
appointed date). The Scheme has been given effect to in these
accounts. The effective date of amalgamation is 01-06-04
(b) the operations of HCL include manufacturing and
trading in fertilizers and Bulk Chemicals
(c) pooling of interests method as prescribed by AS 14

71

Illustration - Merger of HLC with TCL

Rs Cr Rs Cr
Fixed Assets
Investments

166.33

3.43

Net Current Assets

217.84

Total Assets 387.60

Less Loans 62.46
Deferred tax liability
303.78

72

21.36

(83.82)

Illustration - Merger of HLC with TCL

303.78

Issue of shares 34464000 Equity Shares

in the ratio of TCL for every two HLC

34.46

Transfer of Share premium HLC to Share premium 162.73

Transfer of CRR of HLC to CRR
0.10
Transfer of Capital Reserve of HLC to Capital Reserve
Transfer of P&L A/C of HLC to P&L A/C
45.30
209.13
Balance transferred to General Reserve
60.19

73

Illustration - Merger of HLC with TCL

Shares to be issued to HLC shareholders by TCL eligible for

dividend declared by TCL

P%L Appropriation A/C of TCL to include dividend on shares

pending allotment to HLC shareholders

Income and expenses during the period 01-04-02 to 31-03-03

incorporated in the Accounts 2003-04 as HLC carried on the existing
business in trust on behalf of TCL

All vouchers documents for the period are in the name of HLC

74

Illustration - Merger of HLC with TCL

75

P&L A/C 31.03.2004 Rs Cr

31.03.04
31.03.03
Profit after tax 220.53 196.58
Balance brought forward
365.03 300.53
Amount transferred on amalgamation
of HLC:
Balance in P&L A/C 01.04.02
45.30
Profit after tax for 2002-03
30.03
75.33
Dividend
(18.96)
Tax on dividend
(2.43)
Transfer to General Reserve
(5.00) 48.94
Amount available for appropriation
634.50 497.11

Illustration - Merger of HLC with TCL

Valuation
valuation carried out and recommended by N.M. Raiji & Co. CA s
and Delloitte Haskins & Sells CA s
Board of Directors on the basis of their independent valuation and
judgment accepts the recommendation

Share Exchange Ratio

Shareholders of HLC (transferor Co.) eligible to get 5 (five) fully paid
up equity shares of Rs 10 each of TCL (transferee Co.) in respect of
every 2 (two) equity shares of the face value of 10 each held in HLC
Share exchange to take place on a suitable record date

76

Presented By

CA Swatantra Singh, B.Com , FCA, MBA

Email ID: singh.swatantra@gmail.com
New Delhi , 9811322785,
www.caindelhiindia.com,
77