CS Professional CRVI key terms

A court- or tribunal-sanctioned compromise or arrangement between a company and its members or creditors, used to reorganise capital, merge entities or demerge businesses under the Companies Act, 2013.

The date specified in a scheme from which the transfer of undertaking, assets and liabilities, and the resulting accounting, is treated as effective, even though the scheme is approved later.

The date on which a sanctioned scheme actually takes legal effect, generally the date the certified copy of the tribunal order is filed with the Registrar of Companies.

A form of restructuring in which an undertaking or division of a company is transferred to another company, with the resulting shares issued to shareholders of the transferor in a stated ratio.

Transfer of one or more undertakings as a going concern for a lump-sum consideration without assigning individual values to the assets and liabilities transferred, taxed as capital gains under the Income-tax Act.

The adjudicating body constituted under the Companies Act, 2013 that sanctions schemes of arrangement, amalgamation and demerger, and exercises company-law jurisdiction previously held by courts.

The appellate forum that hears appeals against orders of the National Company Law Tribunal and the Insolvency and Bankruptcy Board, including approvals and rejections of resolution plans.

SEBI's Substantial Acquisition of Shares and Takeovers Regulations, which mandate public announcements and an open offer when an acquirer crosses specified voting-rights thresholds in a listed company.

A mandatory or voluntary public offer by an acquirer to buy a specified minimum percentage of shares from the public shareholders of a listed target, at a price determined under the takeover regulations.

The right to appoint a majority of directors or to direct the management or policy decisions of a company, whether exercised directly or indirectly, including through agreements or shareholding.

The permitted annual acquisition of a limited additional percentage of voting rights by a holder already above the threshold, without triggering a mandatory open offer obligation.

A statutory mechanism allowing a holder of a very high percentage of shares to compulsorily acquire the remaining minority shares after a takeover offer, subject to prescribed thresholds.

A structured investigation of a target's legal, financial, tax and operational position before an acquisition, used to price the deal and to frame representations, warranties and indemnities.

The contract governing a share acquisition, setting out the price, conditions precedent, representations, warranties, indemnities, covenants and closing mechanics between buyer and seller.

Consideration for an acquisition paid in the acquirer's own shares rather than cash, typically structured through a scheme or a share subscription with a valuation report.

The number of shares of the transferee company issued for each share of the transferor company in an amalgamation or share exchange, derived from relative valuation.

The total value of a business to all capital providers, computed as equity value plus debt and debt-like items less cash, and used as the basis for multiples-based comparison.

The value attributable to shareholders alone, equal to enterprise value less net debt, and the figure against which per-share offer prices are usually compared.

A valuation method that projects future free cash flows and discounts them to present value at a rate reflecting the risk and time value of money, often using a terminal value.

The blended required return of a company's debt and equity providers, weighted by their proportions in the capital structure and used as the discount rate in cash-flow valuation.

The estimated value of a business beyond the explicit forecast period in a discounted cash-flow model, commonly computed using a perpetuity growth or exit multiple assumption.

A market-based valuation ratio comparing enterprise value to earnings before interest, tax, depreciation and amortisation, drawn from prices paid for comparable listed or acquired companies.

A relative valuation technique that applies trading multiples of similar listed companies to the target's financial metrics to derive an indicative value range.

The additional amount a buyer pays over the prevailing market price of shares to obtain control, reflecting expected synergies and the value of decision-making rights.

The accounting exercise of distributing the consideration paid in an acquisition across identifiable tangible and intangible assets acquired and liabilities assumed, with any residue to goodwill.

The process of estimating the fair value of non-physical assets such as brands, customer relationships, technology and contracts, using income, market or cost approaches.

The excess of consideration transferred over the fair value of identifiable net assets acquired in a business combination, tested periodically for impairment rather than amortised.

The time-bound, creditor-driven procedure under the Insolvency and Bankruptcy Code in which a resolution professional manages the debtor, invites plans and seeks approval of a viable resolution.

A person to whom a financial debt is owed, including lenders and bondholders, whose debt carries consideration for the time value of money and who may initiate insolvency proceedings.

A person owed a claim arising from goods or services supplied, including employees and statutory authorities, whose remedies and committee voting rights differ from those of financial creditors.

The decision-making body of financial creditors that approves the resolution professional's appointment, major decisions and the resolution plan by the prescribed voting share.

An insolvency professional appointed to manage the corporate debtor's operations during resolution, verify claims, run the process and present a resolution plan to the committee.

A proposal submitted by a prospective resolution applicant setting out how the debtor's business will be revived and creditors paid, requiring committee approval and tribunal sanction.

A statutory freeze on suits, enforcement of security, asset transfers and utility disconnection during the resolution period, giving the process breathing space to find a resolution.

The estimated realisable amount from the debtor's assets if sold on a going-concern or piecemeal basis, forming the floor below which a resolution plan cannot ordinarily be approved.

The winding up of a corporate debtor's affairs by a liquidator, realising assets and distributing proceeds to stakeholders in the statutory order of priority.

The statutory order in which liquidation proceeds are distributed, beginning with insolvency costs, then secured creditors and workmen dues, and ending with equity holders.

A debtor-in-possession process for small enterprises in which a resolution plan is negotiated with creditors and filed with the initial application, shortening the formal resolution timeline.

Insolvency proceedings involving a debtor with assets, creditors or operations in more than one country, requiring recognition and cooperation between courts and insolvency representatives.

The jurisdiction where a debtor conducts the administration of its interests on a regular basis and which is ascertainable by creditors, generally presumed to be the registered office.

A collective insolvency proceeding commenced in the state where the debtor has its centre of main interests, attracting automatic relief such as a stay on actions against the debtor.

The principle that courts and insolvency representatives in different states coordinate and communicate directly, respecting each other's proceedings to maximise value across borders.

The Competition Act regime under which mergers and acquisitions crossing asset or turnover thresholds require prior notification to the Competition Commission of India before completion.

The statutory regulator that reviews combinations, investigates anti-competitive agreements and abuse of dominance, and can approve, modify or block transactions within its jurisdiction.

The substantive test applied to a combination, assessing whether it would harm competition in the relevant market through unilateral effects, coordinated effects or foreclosure.

Consent required from a sector regulator, such as the insurance, banking, telecom or electricity authority, before a change of control or shareholding in a regulated entity can take effect.

A transaction between a company and a related party, requiring audit committee and, where material, shareholder approval, with abstention by interested parties under governance rules.

A non-executive director free of material pecuniary or other relationships with the company, its promoters or management, expected to bring objective judgement to board decisions.

A situation where a professional's or director's personal, financial or other interest could improperly influence the discharge of duties owed to the company or client.

Dealing in securities while in possession of unpublished price-sensitive information, or communicating such information, prohibited by SEBI regulations to protect market integrity.

The legal obligation of directors and professionals to act honestly, in good faith and in the best interests of the company, avoiding personal gain from their position.

A member of the institute holding a certificate of practice who issues statutory certifications and reports, and is bound by the code of conduct and disciplinary mechanism.

A breach of the code of conduct by a practising member, such as issuing a false certificate, sharing fees improperly or advertising, attracting disciplinary action by the institute.