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TMI BlogAssessment Order under sub-section (3) of section 396 of the Companies Act, 1956 read with rule 12-A of the Companies(Central Government's) General Rules and Forms,1956 in the matter of proposed amalgamation of National Spot Exchange Limited(dissolved company) with its holding company, Financial Technologies (India) Limited (transfree company)X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor (Accounts), that is, the competent authority to assess the compensation for the purpose of sub-section (3) of section 396 of the said Act, payable to a member or creditor, including debenture holder, of the company amalgamating under that section, hereby makes the following order, in respect of the following, namely:- In the matter of: Proposed Amalgamation of National Spot Exchange Limited (dissolved company) with its holding company, Financial Technologies (India) Limited (transferee company), under section 396 of the Companies Act, 1956 (1 of 1956) And In the matter of: Assessment of compensation to members and creditors of National Spot Exchange Limited (dissolved company) in terms of sub-section (3) of section 396 of the Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion shall have, as nearly as may be, the same interest in or rights against the company resulting from the amalgamation as he had in the company of which he was originally a member or creditor; and to the extent to which the interest or rights of such member or creditor in or against the company resulting from the amalgamation are less than his interest in or rights against the original company, he shall be entitled to compensation which shall be assessed by such authority as may be provided by rules. 4. And whereas, in accordance with the rule 12-A of the Companies (Central Government's) General Rules and Forms, 1956, the Joint Director (Accounts) (''Competent authority") in the Department of Company Affairs shall be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a face value of ₹ 2 each as on 30th September, 2014 . 9. And whereas NSEL is an unlisted company and has filed its Annual Accounts as at 31st March, 2013 only and the financial data is available only up to this date. However, the management and the auditors have withdrawn reliance on the financials for financial year 2012-13. However, it is noted that as per the filings made by the company with regard to the capital that as on 31st March, 2014 the National Spot Exchange Limited (a subsidiary company of FTIL) is having a paid up share capital of ₹ 45,00,00,000 consisting of 4,50,00,000 equity shares of ₹ 10 each. The details of shareholding is as under: Name of Shareholders No. of shares held (equity shares of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the following two scenarios, namely:- (a) fair value has been arrived at ₹ 77.40 per share on net asset value method on the basis of audited financial statement for the financial year 2011-2012 assuming sellers' (investors) claims would be settled with full recovery from buyers (borrowers); (b) fair value has been arrived at ₹ 0 (zero) on net asset value method on the basis of the audited financial statement for the financial year 2011-2012 assuming sellers (investor) claim would not be settled and no further recovery can be made from the buyers (borrowers) considering the recovery trend except to the extent of ₹ 371.64 crore which has been recovered till valuation date. 13. And whereas on the basis of the valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment. (a) the above swap exchange ratio at para (i) above is arrived at considering the fair value of NSEL as ₹ 77 per share as per scenario 1 arrived at by the independent valuers and enumerated at clause (a) para 12 above keeping in view that the latest audited financial statements of NSEL available are as on 31st March, 2012. The Financial Statements for the financial year 2012-13 have since been withdrawn by the auditors and the management of NSEL. The alternative fair value of NSEL at ₹ 0 (zero) arrived at by the valuers in the other scenario as enumerated at clause (b) of para 12 above has not been considered because of the fact that the issue of liabilities pertaining to investors is presently subject matter of dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f legal proceedings. Clause 8 of the said draft order also provides for protection of Taxation, while Clause 9 of the said draft order protects the officers and employees of dissolved company and Clause 11 of the said draft order provides for membership of provident fund and other employee benefit schemes. Thus, these clauses are meeting the requirements of sub-section (3) of section 396 of the said Act which inter-alia, provides that every creditor of each of the companies before amalgamation shall have, as nearly as may be, the same interest in or rights against the company resulting from amalgamation as he had in the company of which he was originally a creditor. Therefore, the interest in or rights of the creditors of dissolved company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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