FERMENTA BIOTECH LIMITED — M&A Activity 2022

Jan 31, 2022

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January 31, 2022

To, BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 001

Subject: Disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 at the meeting of the Board of Directors held on January 31, 2022

Ref: Scrip Code: 506414

Dear Sir/Madam,

This is in continuation to our letter dated October 11, 2021 intimating the approval of the Board of Directors of the Company to the Composite Scheme of Amalgamation and Arrangement amongst DVK Investments Private Limited (“DVK” or the “Transferor Company 1”) and Aegean Properties Limited (“APL” or the “Transferor Company 2”) and Fermenta Biotech Limited (“FBL” or the “Transferee Company” or “the Company”) and their respective shareholders (hereinafter referred to as " Scheme ").

In view of the recent SEBI Circular No. SEBI/HO/CFD/DIL1/CIR/P/2021/0000000665 dated 23[rd] November 2021 (“ SEBI Circular ”) and BSE’s notice no. 20211101-8 dated November 1, 2021 regarding Standard Operating Procedure (SOP) on application filed under Regulation 37 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘ LODR ’) in connection with the scheme of arrangements, a fresh approval has been taken from the Board of Directors of the Company for the draft Scheme to comply with the requirements of SEBI Circular and the standard operating procedures issued by the stock exchange(s) and the applicable provisions of the Companies Act, 2013 (including relevant rules and regulations) and LODR, as amended from time to time.

In the meeting, the Board, after due consideration and discussion, have approved and taken on record draft Scheme and other related documents.

The Scheme, inter-alia, provides for –

• a) Amalgamation of DVK Investments Private Limited (“ DVK ” or “ Transferor Company 1 ”), a private company holding 51.22% share capital of the Company, engaged in the business of a residuary Non-banking Financial Company, into Fermenta Biotech Limited (“FBL” or “ Transferee Company ”); and

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• b) Amalgamation of Aegean Properties Limited (“ APL ” or “ Transferor Company 2 ”), a wholly owned subsidiary of the Company, engaged in the business of renting of immovable properties, into the Company.

The Scheme is subject to receipt of approvals of shareholders and creditors of companies involved and approval of other regulatory authorities as may be required, including those of the BSE Limited, Securities and Exchange Board of India, Reserve Bank of India, the National Company Law Tribunal, Mumbai Bench (“ NCLT ”) and other regulatory authorities as applicable.

Disclosure in terms of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Circular No. CIR/CFD/CMD/4/2015 dated September 9, 2015 is enclosed herewith as Annexure 1 .

This is for your information and record.

Thanking you,

Yours truly,

For Fermenta Biotech Limited

(Formerly known as DIL Limited)

Srikant N Sharma Company Secretary Membership No. - FCS3617

Encl: as above

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Annexure 1

Disclosures regarding the proposed Composite Scheme of Amalgamation and Arrangement

Sr. No.	Particulars		Details	Details
a)	Name of the entities forming part of the amalgamation/merger, details in brief such as size, turnover, etc		Transferee Company: Fermenta Biotech Limited (“FBL”) Authorised capital (As on September 30, 2021) 4,98,40,000 Equity Shares of INR 5/- each 1,60,000 Unclassified shares of INR 5/- each Paid-up share capital (As on September 30, 2021) 2,94,30,987 Equity Shares of INR 5/- each Turnover (For 6 months ended on September 30, 2021) Rs. 211.32 Crores Net Profits/ Losses (For 6 months ended on September 30, 2021) Rs. 19.35 Crores Transferor Company 1: DVK Investments Private Limited (“DVK”) Authorised capital (As on September 30, 2021) 65,30,000 Equity Shares of INR 10/- each Paid-up share capital (As on September 30, 2021) 65,21,665 Equity Shares of INR 10/- each Turnover (For 6 months ended on September 30, 2021) Rs. 3.76 Crores Net Profits/ Losses (For 6 months ended on September 30, 2021) Rs. 3.71 Crores _Transferor Company 1 holds 51.22% paid up share capital of the Transferee_ Company. Transferor Company 2: Aegean Properties Limited (“APL”)** Authorised capital (As on September 30, 2021) 30,000 Equity Shares of INR 100/- each Paid-up share capital (As on September 30, 2021) 30,000 Equity Shares of INR 100/- each Turnover (For 6 months ended on September 30, 20212020-21) Rs. 0.09 Crores Net Profits/ Losses (For 6 months ended on September 30, 2021) Rs. 0.43 Crores
			Authorised capital (As on September 30, 2021)	30,000 Equity Shares of INR 100/- each
			Paid-up share capital (As on September 30, 2021)	30,000 Equity Shares of INR 100/- each
			Turnover (For 6 months ended on September 30, 20212020-21)	Rs. 0.09 Crores
			Net Profits/ Losses (For 6 months ended on September 30, 2021)	Rs. 0.43 Crores

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		*Transferee Company holds 100% paid up share capital of the Transferor Company 2.
b)	Whether the transaction would fall within the related party transactions? If Yes, whether the same is done at “Arm’s Length”	In terms of General Circular No. 30/2014 dated July 17, 2014, issued by the Ministry of Corporate Affairs, the proposed amalgamation would not be considered as related party transaction (‘RPT’). However, the present transaction may be deemed to be a related party transaction under the applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other related rules and regulations (as amended from time to time). For Amalgamation of DVK into FBL, the consideration will be discharged on an “arm’s length basis”. The share exchange ratio for the shares to be allotted to the shareholders of Transferor Company 1 is based on an independent share exchange ratio report provided by Mr. Niranjan Kumar, Registered Valuer–Securities or Financial Assets. Further, Galactico Corporate Services Limited, a SEBI registered Category - I Merchant Banker, has also issued a fairness opinion on the share exchange ratio. The aforementioned Share Exchange Ratio Report and Fairness Opinion have duly been considered by the Audit Committee, Committee of Independent Director and the Board of Directors of FBL. For Amalgamation of APL into FBL, compliance with Regulation 23(2), 23(3) and 23(4) is not required in view of Regulation 23(5) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The companies involved in the Scheme have following relationship with each other– • DVK holds 51.22% of the paid-up share capital in FBL; and • FBL holds 100% paid up equity share capital in APL.
c)	Area of Business of the entity(ies)	Fermenta Biotech Limited is engaged in the business of manufacturing and marketing of chemicals, active pharmaceutical ingredients, enzymes, pharmaceutical formulations and environmental solution products and is also engaged in the business of renting of properties. DVK Investments Private Limited is engaged in the business of a Non- Banking Financial Company without accepting public deposits (Non- Systemically Important). Aegean Properties Limited is engaged in the business of rentingofproperties.

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d)	Rationale for the Amalgamation/ Merger	The Amalgamation of the Transferor Company 1 and the Transferor Company 2 with the Transferee Company is sought to be undertaken to achieve the following benefits. i. Simplification of the group structure and consolidation of legal entities; ii. Reducing the number of legal entities, resulting into lesser administrative and regulatory compliances; iii. Simplification of the shareholding structure and reduction of shareholding tiers thereby providing greater transparency in relation to the Promoters’ direct engagement with the Transferee Company; iv. Improved allocation of capital and optimization of cash flows contributing to the overall growth prospectus of the combined entity; v. Creation of a larger asset base by consolidation of the assets and facilitation of access to better financial resources; and vi. The Transferee Company would benefit from freeing up of management time, and related cost savings, as the simplification of the group structure would reduce intra-group transaction reporting requirements that apply to the Transferee Company vii. Enable greater / enhanced focus of the management on the business; and viii. Creating enhanced value for Transferee Company’s shareholders and allow a focused strategy in operations, which would be in the best interest of all its shareholders, creditors and all other stakeholders.
e)	In case of cash consideration - amount or otherwise share exchange ratio;	There is no cash consideration involved in the scheme. a) Amalgamation of Transferor Company 1 with the Transferee Company: Based upon the Share Exchange Ratio Report, the Fairness Opinion and the recommendations received from Audit Committee, the Board has approved the Scheme for the transfer and vesting of DVK into the Transferee Company, in consideration for which the Transferee Company will issue and allot to the shareholders of DVK, equal number of its equity shares as held by DVK in the Transferee Company – 1,50,75,318 (One Crore Fifty Lakhs Seventy Five Thousand Three Hundred and Eighteen Only) equity shares of the face value of INR 5 (Rupees five only) each, credited as fully paid up in the share capital of the Company, in the proportion of the number of equity shares held by the shareholders in DVK, without any further act or deed, due to operation of law and upon this Scheme becoming effective.

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		b) Amalgamation of Transferor Company 2 with the Transferee Company: The entire issued, paid-up, subscribed share capital of APL is directly held by FBL. Therefore, no shares shall be issued by the FBL pursuant to the Scheme becoming effective.
f)	Brief details of change in shareholding pattern (if any) of listed entity	1. Amalgamation of Transferor Company 1 with Transferee Company Prior to the Scheme being effective, DVK is holding the following number of shares in the Transferee Company: Name of the shareholder No. of shares held Face value (INR) Shareholding (%) DVK Investments Private Limited 1,50,75,318 5 51.22% Post effectiveness of the Scheme, the shares held by DVK in the Transferee Company shall get cancelled. The Transferee Company shall issue equal number of equity shares as held by DVK in the Company, to the respective shareholders of DVK. The revised shareholding of the Transferee Company post Scheme with respect to shares issued to shareholders of DVK shall appear as follows: Name of the shareholder No. of shares held Face value (INR) Shareholding (%) Krishna Datla 75,49,151 5 25.65% Satish Varma 34,30,165 5 11.65% Preeti Thakkar 20,48,529 5 6.96% Anupama Datla Desai 20,47,473 5 6.96% TOTAL 1,50,75,318 - 51.22% 2. Amalgamation of Transferor Company 2 with Transferee Company There will not be any change in the shareholding of the Transferee Company.

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