Gujarat National Law University

CORPORATE LAW II ASSIGNMENT

Fill the answers in the space provided and submit a print out and soft copy.
If any question is not relevant to your company, mention NA

1. Analyze the Section of the Insolvency and Bankruptcy Code, 2016 allotted to you.

Clause 4 of the Schedule 11 of the Insolvency and Bankruptcy Code, 2016

Section 77 (3) of Companies Act, 2013:

Notwithstanding anything contained in any other law for the time being in force, no charge
created by a company shall be taken into account by the liquidator or any other creditor unless it
is duly registered under sub-section (1) and a certificate of registration of such charge is given by
the Registrar under sub-section (2)

New Section 77(3) of the Companies Act, 2013 amended by clause 4 of the schedule 11 of
insolvency and Bankruptcy Code, 2016:
Notwithstanding anything contained in any other law for the time being in force, no charge
created by a company shall be taken into account by the liquidator appointed under this Act or
the Insolvency and Bankruptcy Code, 2016, as the case may be, or any other creditor unless it
is duly registered under sub-section (1) and a certificate of registration of such charge is given by
the Registrar under sub-section (2)
By the clause 4 of schedule 11 of insolvency and bankruptcy code, 2016 new words
“appointed under this Act or the Insolvency and Bankruptcy Code, 2016, as the case
may be” added in Section 77(3) of the companies act, 2013. The purpose of the adding these
words is to remove ambiguity is in section 77, and give liquidator only meaning which is
assigned in companies act, 2013 and in insolvency and bankruptcy code, 2016. The liquidator
appointed under other statutes than these two, then this section is not applicable, and
liquidator may be or may not be taken into account the charge created by the company. But
for the purpose of the companies act, 2013 and insolvency and bankruptcy code, 2016 and
liquidator appointed under these statutes or creditor mandatorily shall not take into account
charge created by the company but if it is duly registered under section 77(1) of the
companies act, 2013 and certificate is given for the charge by the registrar under section
77(2) of the companies act, 2013 then the same charge could be considered by the liquidator

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 appointed under companies act, 2013 or insolvency and bankruptcy code, 2016 or by
creditor. The purpose of the clause 4 of the schedule 11 of the insolvency and bankruptcy
code 2016 is to remove the exiting doubt with regard to the liquidator word used in the
Section 77(3) of companies act, 2013.

2. Scheme of the Deal of scheme of arrangement

 
(i) The name of the Transferor/s and  Transferee Company

Transferor Company- Bio Agency Limited

Transferee Company- Tech Mahindra Limited

(ii) The nature of the Companies/ What is the name of the new merged company? (If
applicable)

Tech Mahindra Limited is an Indian multinational provider of information technology (IT),

networking technology solutions and Business Process Outsourcing (BPO) to the
telecommunications industry. Tech Mahindra Limited is a Public Company. Tech Mahindra
is founded in 1986. It is a subsidiary company of Mahindra Group.

Bio Agency Limited is UK based entity which is an Advertising agencies. It is a Private

limited Company.
Name of the new company is not applicable because it is an acquisition.

(iii) Year of the approval of the scheme

Year of approval is July 2016.

(iv) Brief procedural background of the merger (BOD Resolution, Shareholder’s

approval, CEO's involvement if any)

London / Hyderabad, June 22, 2016 - Tech Mahindra Limited, a leading provider of IT,
Networks & Engineering solutions and BPO services announced the acquisition of The BIO
Agency (BIO), headquartered in the UK. 

Regulation 30 of the SEBI (listing Obligation & Disclosure Requirements) Regulations,

2015, the investment Committee of Board of Directors of Tech Mahindra Company approved
the proposal to acquire BIO Agency Limited, a UK based entity.

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 (v) Brief idea about the scheme (Analysis of the scheme in maximum 150-200 words)

The consideration has been in cash. A part of the cash consideration is in deferred
payments from 2017 to 2019 based on the company performance during the period FY17
to FY19. The Management of the Bio has also been awarded consideration based on
revenue they bring to Tech Mahindra over next 3 years. The consideration is the
Enterprise Value of GBP 40 million plus surplus cash not exceeding GBP 5 million as at
the Completion Date. The payment of GBP 22 million and the surplus cash has been
made upfront and the balance as deferred payments based on company performance. It is
not a related-party transaction and the promoter/promoter group has no interest in the
entity being acquired. Tech Mahindra acquired 100 percent of shares in BIO Agency.

(vi) What is the nature of the deal? Horizontal or/Vertical

or/Conglomerate/Acquisition/Demerger/ etc?

The nature of the deal is an Acquisition.

(vii) Write the name of the Company Court/High Court, where the scheme was
proposed?

The scheme was proposed at The Andhra Pradesh High Court.

(viii) Whether the scheme was approved or rejected?

The scheme was approved.

(ix) Write briefly about the post deal status. (3-4 sentences)

The acquisition have opened up more clients for BIO globally (especially in Europe and
the US), scaling their offerings and enabling new services and deeper digital change. This
has significantly helped enhanced BIO's offerings in people, turnover and market impact.
BIO has continued to further invest into its people and its propriety thinking, The BIO
Agency and Tech Mahindra have created one of the world's leading innovation practices.
A combination of BIO's visionary thinking and delivery with Tech Mahindra's IT to
Digital Transformation strategy have enabled and created digital services.