NBFC for Sale

8/18/2019 NBFC for Sale

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Proposal for transfer of promoter’s stake inPublic Ltd. Company ( NBFC)

Supra Pacific Management Consultancy Limited

PART I: BASIC INFORMATION

Registration & Authorization details

1. Status: A registered Public Limited Company listed with Regional StockExchange up to 31/03/2014

2. Date Of Incorporation: April 1986

3. Authorized Equity Capital: Rs. 600 Lakhs

4. Paid Up Equity Capital: Rs. 479 lakhs

5. Equity calls outstanding: Rs. 71 lakhs

6. Total equity capital: Rs. 550 lakhs

7. Shares held by Promoters / Friend / Associates:

8. Public Issue: Nov 1996

9. Listing on Regional Stock Exchange: Since 1996. The company is delistedor defaulted and is paying the fees to Regional Stock Exchange every year.

10.

Listing will be migrated on BSE main board in April 2014 as NBFCregistered under Reserve Bank of India Department of Non BankingSupervision and it has not accepted public deposit. Year of Registration:1999 ( Under Process)

11.

Main Business of Company:a. Financial Services. Earlier Portfolio Management Services.b. NBFC –Non Banking Financial Services (Currently no business

transaction)

(a) In name of self and through privatelimited company 100% owned byPromoters:

74.99%

(b) The shares lying in name of friendsand Associates which could beacquired and delivered along withPromoters shares:

17.41%

Maximum offer by Promoters 92.41%


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PART II: FINANCIALSThe company currently has no major business and has accumulated losses. But has apositive net worth of Rs.500 lacs as reflected below:

Proposed (Rs. in Lacs)

31st March, 2014 31st March, 2013 31st March, 2012

Equity and Liabilities

Shareholders’ funds

Share capital

Reserves and surplus

Non-Current Liabilities

Long Term Borrowings

Current Liabilities

Trade payables

Other Current Liabilities

550.00

(49.00)

--

--

--

479.06

(70.30)

22.00

1.50

2.04

479.05

(70.85)

22.00

1.42

0.43

TOTAL 501.00 434.34 430.05

Assets

Non-current assets

Fixed assets

Tangible assets

Noncurrent Investments

Long-term loans and advances

Current assets

Cash and cash equivalents

Short-team loans and advances

Other current Assets

1.00

--

429.00

71.00

--

--

82.15

171.26

148.36

0.57

30

1.97

84.14

171.26

143.53

0.10

30

1.02

Total 501.00 434.31 430.05


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PART III: MIGRATION FROM REGIONAL STOCK EXCHANGE TOBOMBAY STOCK EXCHANGE (BSE) IN PROCESS

The company is meeting with the basic criteria defined by SEBI for migrationfrom Regional Stock Exchange to BSE. ( In Process)

1.

Minimum Requirement:

a. Paid up capital should be more than Rs. 500 lakhs.Our capital is Rs. 550 lakhs.

b. Number of shareholders should be more than 500.Our number of shareholders is approximately 1200.

c. There should be profit in 2 years out of last 3 years.

Our company has profit in year 2013-14.

2.

Additional requirement to be complied before applying for migration:

a. The company should have own website(Website is under construction).

b. There should be R & T agent with demat account. At the moment, there is no R & T agent, but it is being appointed.

100% promoter’s stake will be dematted and 50% of public holding will bedematted before 31/03/2014.

c. Outstanding call money from the shareholders.There are few shareholders who have not yet paid call money.

Now, the company will make final call and expects to receive call money and gettheir shares dematted.

3.

Appointment of merchant banker for migration:

Our company has complete discussion with company secretary and merchantbanker. Soon, we will be able to file required documents with SEBI.

We hope to get listed by April 2014.


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4. Valuation/pricing:a.

Sr. No. Particulars Percentage Nos. of shares

1 Promoters stake 74.99% 41.2 Lakhs

2 From Friends and Associates 17.41% 9.6 LakhsTotal 92.40% 50.8 Lakhs

Note: Some of the shares are partly paid, but expected to receive call moneysoon.

b. Valuation for promoter stake – Rs. 550 lac. (Including Office)

This works out to be Rs.10.82 per share for face value of Rs. 10/-.

1.

Actual procedure for transfer of Promoters stake:

I. MOU between old going and new incoming promoters with agreed priceand agreed quantity of shares.

II. New promoters will pay fund as under:a) Advance with MOU – zero date = Rs. 50 lakhs

b)

Pay for fully paid up 8 lakhs shares ofassociates @ Rs. 5/- +7 days = Rs. 40 lakhs

c) Provide name and address of at least 500shareholders to whom partly paid 8 lakhs@ Rs. 2.5/- can be transferred + 14 days = Rs. 20 lakhs

Note: Payment made under item a, b and c is part of the totalprice.

d)

New promoters has to make payment of Rs. 71 lakhs in addition toabove agreed price, but this payment of Rs. 71 lakhs will remain ascash on hand in the balance sheet for new promoters.

6. Fund required for transfer of loan and advances from old promoters to thenew Promoters borrowers or (new Promoters Private Limited Companies,will become borrower in place of old promoters Private Limited Companies)

Note: There will be no real out go of funds, but at least Rs. 50 lakhs will berequired from new promoters to old promoters for this purpose.


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This amount is part of the price and not any additional out go for newpromoters.7. Expected Profit & Loss account and Balance sheet as on 31/03/14:

a.

Profit and loss position:We expect profit for the year of about Rs. 20 lakhs. The old promoters willpay necessary taxes on profit.

b.

Sale of investment and office, etc:

As of 31/03/2013, in the balance sheet, there was book value of office isRs. 85 lakhs and there was investment Rs. 150 lakhs, etc. The existingpromoters are disposing off assets from both heads and shall paynecessary taxes, (if any).( if required not required to proposed buyer).

c. The existing promoters will be responsible to file necessary IT return as of

31/03/2014. Also, any tax refund is received in due course, the new

promoter will pay equivalent amount as additional price to outgoingpromoter. However, if there is any income tax demand on company dueto previous assessment the out going promoters will pay equal and to newpromoters as compensation/reduction in the price.

8. What are the benefits to new promoter with acquisition of this company?

1. A functional NBFC which can be fully operationally leveraged in no time.2. It is NBFC category SI NI immediately. It does not require any prior

approval, etc.3. The company can borrow 20 times. Its paid up capital i.e. Rs. 110 Crores

4.

The company can offer various loan to public such as Home loans , Autoloans , Personal loans , Business loans, Commercial loans and Industrialloans .

5. The fact that it is a publicly listed entity lot of information can be gatherfrom public domain for proper due diligence, unlike an unlisted wherethe reliability will have to be on the seller and may not be verifiedindependently.

6. Since the NBFC is listed in case of the transaction happening, it can berouted on stock exchange platform, which in later years in case of exit willgive tax free gains (Zero Long Term Gains)

7.

Being listed itself, shares can act as currency for any more takeovers infuture for business expansion.8. Compared to Fresh listing of shares, buying a listed entity will require

lesser extend of disclosures.9. Capital raising in future will be easy, it can easily make rights issue and

increase part up capital.10. A listed entity also attracts talent in case of expansion.11. Being listed, due diligence will have to carried out by certified Merchant

Banker and hence we are sure of buying a quality asset.


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12. Being listed also brings a visibility and faith and builds confidence with allstakeholders.

13. The valuation, visibility and credibility of the entity would become almostdouble once it Is listed on BSE.

DUE DILIGENCE PROCESS FOR TAKEOVER

9. SECRETARIAL & REGULATORY DUE DILIGENCE:

a. Shareholders register:The company is maintaining computerized and hard copy of shareholderregister is presented format.

b. The company is maintaining minutes of meeting from inception to till dateand is readily available for inspection.

c. Compliances & Filings under Companies Act.d. Compliances & Filings under SEBI TAKEOVER CODE.e. Compliances & Filings under RBI ACT (45IA AS IT’S A NBFC CO). f.

Compliances & Filings under PMLA, Prohibition Of Insider Trading andsuch other laws

10. LEGAL DUE DILIGENCE:

Check all Permits & Licenses & other consents/approvals (e.g. Tax deductionAccount (TAN) Number, Service Tax Registration, Professional TaxRegistration, Employees Provident Fund Registration, Employee StateInsurance Corporation Registration, Shops and Establishment Registration,other statutory and/or regulatory consents, licenses, approvals, filings,registrations, applications made to authorities for obtaining or renewal any ofthe aforementioned consents, permits, licenses, approvals, filings, registrations,or orders).

11. LITIGATION & PROCEEDINGS:

Litigation, claim involving the Company/Promoters/Directors of theCompany

Current, pending or threatened dispute, litigation, arbitration,investigation or regulatoryagency action involving the Company/Promoters/Directors of theCompany

Check if there are any notice(s) from Government or any other local bodyor authority viz.the Income-tax Authority, RBI, ROC, etc. or under any legislative

enactment, Governmentordinance, order or notification has been received by or served upon theCompany.

12. FINANCIAL DUE DILIGENCE:

Returns filed by the Company under the Income-tax as also under andother tax laws for the past three years

Analysis of Related Party Transaction for last five years Other company specific diligence.


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