DSP MERRILL LYNCH LIMITED
Merrill Lynch
A subsidiary of
Bank of America Corporaion
Registered Office: 8th Floor, Mafatlal Centre, Nariman Point, Mumbai 400 021
Tel +91 22 66328000, Fax +91 22 66328580, website: www.dspml.com, e-mail: dg.secretarial@baml.com
CIN: U74140MH1975PLC018618
NOTICE PURSUANT TO SECTION 110 OF THE COMPANIES ACT, 2013
Dear Member(s),
NOTICE is hereby given pursuant to the provisions of Sections 110 and Section 180 of the Companies Act, 2013 read with the Companies
(Management and Administration) Rules, 2014, seeking the consent of the members for the resolution appended below to be passed through
Postal Ballot.
SPECIAL RESOLUTION
To consider and, if thought fit, to pass with or without modification the following resolution as a Special Resolution:
“RESOLVED THAT pursuant to and in accordance with the provisions of Section 180(1)(a) and other applicable provisions, if any, of the
Companies Act, 2013, including any statutory modifications thereof for the time being in force, read with Rule 22 of the Companies
(Management and Administration) Rules, 2014 and the provisions of the Memorandum and Articles of Association of DSP Merrill Lynch
Limited (“the Company”), and subject to such other applicable statutes and regulations and subject to receipt of such approvals, consents,
permissions and sanctions as may be required and such conditions or modifications as may be prescribed or imposed while granting such
approvals, consents, permissions and sanctions which may be agreed to by the Board of Directors of the Company and consent of the members be
and is hereby accorded for the sale and transfer by the Company of its wealth management division (hereinafter referred to as the “WM
Business” or “WM Division”) comprising of advisory services and distribution services as undertaken by the Company; lending business
relating to WM Division as undertaken by a wholly owned subsidiary of the Company, namely, DSP Merrill Lynch Capital Limited
(“DSPMLC”) and trust services also relating to the WM Division as undertaken by DSP Merrill Lynch Trust Services Limited (“DSPMLTS”), a
wholly owned subsidiary of the Company together with the client relationships (including depository participant accounts, if any, relating to such
relationships), employees and relevant assets relating to the WM Division to the Julius Baer Group (“JBG”) (the “Proposed Transaction”) in
the following manner:
1.
2.
3.
Subject to the receipt of the necessary regulatory approvals, the entire share capital of Merrill Lynch Wealth Advisors Private Limited
(“MLWA”), a wholly owned subsidiary of the Company, shall be transferred by the Company to the following JBG entities, namely,
Julius Baer Group Ltd (“JB Company”) and Julius Baer Investment Ltd., as a nominee of JB Company (together, the “Purchasers”),
by way of a share sale, in accordance with, and on terms and conditions mutually agreed between the Company and Purchaser, for an
aggregate consideration of INR 500.0 million, being the fair value as determined by an independent valuer on arm's length basis in
accordance with the applicable Foreign Exchange Management Act (“FEMA”).
Subsequent to the share sale of MLWA to the Purchasers, the entire business of the WM Division as undertaken by the Company shall
be transferred as a going concern, by way of a sale, to MLWA (JBG owned) together with the entire share capital of DSPMLTS, on the
terms and conditions mutually agreed between the Company and MLWA (JBG owned), for a lump sum consideration not less than INR
1830.1 million, being the fair value for the same, as determined by an independent valuer on arm's length basis;
The entire lending business relating to the WM Division as undertaken by DSPMLC, shall be transferred as a going concern, by way of
a sale, to an affiliate entity, namely, Banc of America Securities (India) Private Limited (“BASIL”) subject to the receipt of necessary
corporate approvals, in accordance with the terms and conditions mutually agreed between DSPMLC and BASIL at a premium of 7.3
% (as determined by an independent valuer on arm's length basis) to the book value of the lending business on the date of such transfer.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board of Directors of the Company (hereinafter referred
to as the “Board” which term shall be deemed to include any Committee thereof constituted or to be constituted by the Board), be and is hereby
authorized to negotiate and finalise the terms and conditions and manner and method for undertaking the Proposed Transaction, provide the
requisite approvals and consents and take such steps as may be considered necessary for effecting the Proposed Transaction, including for the
transfer of the lending business relating to the WM Division of DSPMLC to BASIL and the sale of the entire share capital of DSPMLTS to
MLWA (JBG owned), and execute all necessary agreements (including such representations, warranties, indemnities and covenants as may be
customary in such transactions), deeds and documents and subsequent modifications thereto in connection with the Proposed Transaction, file
necessary applications with regulators, as required, and liaise with and make representations before regulators, file necessary forms with the
Registrar of Companies and other authorities and do all such acts, deeds and things as may be deemed necessary and/or expedient for the
purposes of undertaking the Proposed Transaction including, without limitation, to settle any questions, difficulties, doubts that may arise in this
regard and to appoint consultants, valuers, legal advisors and all such agencies as may be required, as it may in its absolute discretion deem fit,
without being required to seek further clarification, consent or approval of the members and that the members shall be deemed to have given their
approval thereto expressly by the authority of this resolution.
RESOLVED FURTHER THAT the Board is hereby authorized to delegate all or any of its powers conferred by the above resolution to any
director or directors or any other officer or officers of the Company to give effect to the aforesaid resolution.”
BY ORDER OF THE BOARD
Mumbai, 27th January, 2015
Asit Bhatia
Director
(DIN: 05112750)
T +91 22 66328000, F +91 22 66328580, dg.secretarial@baml.com CIN: U74140MH1975PLC018618
DSP Merrill Lynch Limited
Mafatlal Centre, 8th Floor, Nariman Point, Mumbai 400 021 India
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NOTES
1.
A copy of this Notice has been placed on the website of the Company at www.dspml.com and shall remain on the website
until the last date for receipt of the Postal Ballot Forms ('the Form/s') from the members, i.e. 2nd March, 2015.
2.
As required by the Companies (Management and Administration) Rules, 2014, details of dispatch of the Notice and the
Form to the members will be published in at least One English and One Vernacular newspaper in the principal Vernacular
language, having a wide circulation in the Mumbai district.
3.
The Explanatory Statement and reasons for the proposed resolution, pursuant to Section 102(1) of the Companies Act,
2013 and Rule 22 of the Companies (Management and Administration) Rules, 2014, setting out all material facts in
respect of the business specified in this Notice are appended herein below.
4.
The Notice is being sent to all the members of the Company, whose names appear on the register of members/ record of
depositories as on 23rd January, 2015.
5.
The Form for voting by members is enclosed.
6.
Pursuant to the provisions of Sections 180 and 110 of the Companies Act, 2013 read with the Companies (Management
and Administration) Rules, 2014, the assent or dissent of the members in respect of the resolutions contained in this
Notice dated 27th January, 2015 is being determined through Postal Ballot.
7.
The Board of Directors of the Company have, at their meeting held on 27th January, 2015, appointed Mr. Surendra
Kanstiya, a practicing Company Secretary as Scrutinizer for conducting the Postal Ballot process in a fair and transparent
manner. The self addressed and stamped envelope attached to this Notice bears the address to which duly completed
Postal Ballot form is to be sent.
8.
Members are requested to carefully read the instructions printed in the Form and indicate their assent or dissent for the
items detailed in the Notice against the relevant items and return the duly completed Form in the attached self-addressed
envelope, so as to reach the Scrutinizer c/o DSP Merrill Lynch Limited, Mafatlal Centre, 8th Floor, Nariman Point,
Mumbai - 400 021, not later than the close of working hours (6.00 pm) on 2nd March, 2015.
9.
Postal ballot cannot be exercised by a proxy. Where the Form has been signed by an authorized representative of a body
corporate, a certified copy of the relevant authorization to vote on the Postal Ballot should accompany the Form. A
shareholder need not use all his votes nor does he need to cast all his votes in the same way.
10.
Members are requested not to send any other paper along with the Form in the enclosed self addressed envelope since all
such envelopes will be sent to the Scrutinizer and any extraneous paper found in such envelope would be destroyed by the
Scrutinizer.
11.
Votes will be considered invalid on the following grounds:
a.
b.
c.
d.
If the Member's signature does not tally;
If the Member has marked both in favour and against;
If the ballot paper received is torn or defaced or mutilated to an extent that it is difficult for the Scrutinizer to
identify either the Member or the number of votes or as to whether the votes are in favour or against or if the
signature could not be checked or one or more of the above grounds;
On such grounds which in the opinion of the Scrutinizer makes the vote invalid.
12.
The Scrutinizer will submit his final report as soon as possible after the last date of receipt for Postal Ballot but not later
than 4th March, 2015, by 2.00 p.m.
13.
The Chairman of the Company or such other persons as authorised shall announce the result of Postal Ballot on 5th March,
2015 at 9.30 a.m. at Express Towers, 19th floor, Nariman Point, Mumbai – 400 021. The Members, who wish to be present
at the time of declaration of the results, may do so at the said venue. The date of declaration of Postal Ballot result will be
taken to be the date of passing the resolutions detailed in the Notice. The result of the Postal Ballot shall also be placed on
the website of the Company at www.dspml.com.
14.
The documents referred to in this Notice and Explanatory Statement are open for inspection at the registered office of the
Company on all working days of the Company (Monday to Friday) between 10:00 a.m. and 5:00 p.m. up to 2nd March,
2015.
15.
The resolutions, if assented to by requisite majority, shall be taken as passed on 5th March, 2015, i.e. date when the results
of the Postal Ballot will be announced.
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Explanatory Statement pursuant to the provisions of Section 102 of the Companies Act, 2013 (the 'Act')
I.
Proposed transaction
The wealth management division of the Company (hereinafter referred to as the “ WM Business or WM Division”), comprising
of advisory services and distribution services as undertaken by the Company; lending business relating to WM Division as
undertaken by a wholly owned subsidiary of the Company, namely, DSP Merrill Lynch Capital Limited (“DSPMLC”) and trust
services also relating to the WM Division as undertaken by DSP Merrill Lynch Trust Services Limited (“DSPMLTS”), a wholly
owned subsidiary of the Company together with the client relationships (including depository participant accounts, if any, relating
to such relationships), employees and relevant assets relating to the WM Division, is proposed to be transferred to the Julius Baer
Group (“JBG”) ( the “Proposed Transaction”).
The Julius Baer Group is the leading Swiss private banking group, with focus on servicing and advising private clients.
Headquartered in Zurich, the Julius Baer Group has offices in Dubai, Frankfurt, Geneva, Hong Kong, London, Lugano, Madrid,
Monaco, Montevideo, Moscow, Shanghai and Singapore.
The Proposed Transaction is proposed to be undertaken in the following manner:
1.
To facilitate the Proposed Transaction, the Company has incorporated a step-down subsidiary – Merrill Lynch Wealth
Advisors Private Limited (“MLWA”) that acquired the requisite licenses from the Securities and Exchange Board of
India (“SEBI”) to function as a Stock Broker, Investment Advisor, and registered with the Association of Mutual Funds
in India (“AMFI”) as a distributor of Mutual Funds in India and has also applied for a license to operate as a Depository
Participant to SEBI, with the Company having extended necessary cooperation and support to MLWA for each of the
aforesaid;
2.
Subject to the receipt of the necessary regulatory approvals, the entire share capital of MLWA shall be transferred by the
Company to two overseas entities forming part of JBG, namely, Julius Baer Group Ltd. (“JB Company”) and Julius Baer
Investment Ltd as a nominee of JB Company (together, the “Purchasers”), by way of a share sale, in accordance with,
and on terms and conditions mutually agreed between the Company and the Purchasers, for an aggregate consideration
of INR 500.0 million being the fair value for the same as determined by an independent valuer on arm's length basis. A
valuation report dated 26th January, 2015 prepared by merchant bankers, Ernst & Young Merchant Banking Services
Private Limited, in accordance with the prevailing valuation norms under the Foreign Exchange Management Act, 1999
(“FEMA”) shall be available for inspection at the registered office of the Company on all working days of the Company
(Monday to Friday) between 10:00 a.m. and 5:00 p.m. up to 2nd March, 2015;
3.
The lending business (relating to the WM Division) as undertaken by DSPMLC, a wholly-owned subsidiary of the
Company, shall be transferred as a going concern by way of a sale to an affiliate entity, namely, Banc of America
Securities (India) Private Limited (“BASIL”) subject to the receipt of necessary corporate approvals and in accordance
with the terms and conditions as mutually agreed between DSPMLC and BASIL at a premium of 7.3 % (as determined by
an independent valuer on arm's length basis) to the book value of the lending business on the date of such transfer. A
valuation report dated 26th January, 2015 prepared by merchant bankers, Ernst & Young Merchant Banking Services
Private Limited in this regard shall be available for inspection at the registered office of the Company on all working days
of the Company (Monday to Friday) between 10:00 a.m. and 5:00 p.m. up to 2nd March, 2015;
4.
Subsequent to the completion of the transfer of shares of MLWA to the Purchasers, the entire business of the WM
Division as undertaken by the Company, shall be transferred to MLWA (JBG owned) as a business transfer of an
undertaking on a going concern basis, together with the entire share capital of DSPMLTS, in accordance with the terms
and conditions mutually agreed between the Company and MLWA (JBG owned) for a lump sum consideration of not less
than INR 1,830.1 million. The actual consideration payable for the transfer of the business of the WM Division as
undertaken by the Company and the entire share capital of its wholly-owned subsidiary, DSPMLTS shall be a lump sum
amount having regard inter alia to the following factors:
(i)
(ii)
The volume of client consents for transfer of relationships to MLWA and the related assets under
management as on the date of transfer to MLWA besides the infrastructure and systems, employees,
assets and liabilities of the WM Division as undertaken by the Company; and
Applicable regulatory requirements, including provisions of FEMA, if and as applicable, to the
Proposed Transaction.
In this regard, the Company has obtained a valuation report dated 26th January, 2015 prepared by a merchant banker, Ernst
& Young Merchant Banking Services Private Limited, for the Proposed Transaction, in terms of which the business of the
WM Division as undertaken by the Company, including DSPMLTS is currently valued at INR 1,830.1 million. This
valuation report shall be available for inspection at the registered office of the Company on all working days of the
Company between 10:00 a.m. and 5:00 p.m. up to 2nd March, 2015.
5.
It is relevant to note that until the completion of the transfer of the business of the WM Division undertaken by the
Company to MLWA (JB-owned), MLWA shall not conduct any business. Further, for such period the Company shall
continue to conduct the business of the WM Division in the normal course.
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6.
Separately, the entire share capital of BASIL shall also be transferred by the shareholders of BASIL to MLWA (JBG
owned), in accordance with the terms and conditions mutually agreed between the shareholders of BASIL and MLWA
(JBG owned). The shareholders of BASIL are BankAmerica International Financial Corporation and Bank of America
Overseas Corporation.
Recommendation of the Board of Directors of the Company
In August 2012, Merrill Lynch & Co., Inc (which merged with Bank of America Corporation (“BAC”) w.e.f 1st October, 2013)
agreed to procure the sale of the international Wealth Management businesses based outside of the United States to JBG, across
several jurisdictions worldwide, including India. Internationally, Bank of America will focus its management and financial
resources on continuing to build its leading Global Banking and Markets business. Pursuant to the above, the sale of the wealth
management business in different countries has been implemented in accordance with relevant local laws and local agreements.
The transfer of the wealth management business in India is now being contemplated.
The Board of Directors of the Company, in its meeting held on 27th January, 2014, has approved the Proposed Transaction as above,
subject to the consent of the members of the Company. The Board of Directors recommends that this item be approved by the
members.
None of the Directors, Key Managerial Personnel and their relatives are concerned or interested whether financially or otherwise,
except to the extent of their shareholdings, if any.
Reasons for which the Proposed Transaction requires the approval of the Company's members
As per the provisions of Section 180(1)(a) of the Companies Act, 2013, the sale, lease or otherwise disposal of the whole or
substantially the whole of the undertaking of the Company or where the Company owns more than one undertaking, of the whole
or substantially the whole of any such undertaking requires the approval of the members by way of a Special Resolution. The
approval of the members of the Company is accordingly being sought for the Proposed Transaction.
Mumbai, 27th January, 2015
BY ORDER OF THE BOARD
Asit Bhatia
Director
(DIN: 05112750)
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