EGM Notice of Roots Multiclean

Document Summary

ROOTS MULTICLEAN LIMITED, a company with CIN: U36999TZ1992PLC003662, has issued a notice for an Extra-Ordinary General Meeting (EGM) to be held on Thursday, March 27, 2025, at 11:00 A.M. at its registered office in Coimbatore. The purpose of the meeting is to transact the following special business:

1. Alteration of Articles of Association (AoA) A special resolution will be considered to alter Article 4 of the AoA. The proposed addition grants the Company the power to increase, consolidate, divide, convert, alter, sub-divide, or reduce its share capital as permissible under the Companies Act, 2013, and as decided by the Board of Directors or members. The Board is also authorized to perform necessary actions to give effect to this resolution. The company is seeking this alteration to its AoA because the application to be made to the National Company Law Tribunal (NCLT) for seeking confirmation of NCLT for reduction of capital being RSC-1, requires mentioning of the relevant clause in the AoA of the Company which enables the Company to reduce its share capital.

2. Reduction of Share Capital A special resolution will be considered for the selective reduction of the company's issued, subscribed, and paid-up equity share capital from INR 2,00,00,000 to INR 1,71,73,600. This will be achieved by cancelling and extinguishing 2,82,640 fully paid-up equity shares of INR 10 each, representing 14.13% of the total issued capital, held by Identified Shareholders. This reduction is subject to the provisions of Section 66 of the Companies Act, 2013, the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016, and confirmation by the Hon'ble National Company Law Tribunal (NCLT), Chennai Bench, along with other necessary approvals. Identified Shareholders as on the Record Date will receive INR 2,000 per equity share, determined as the fair value by a registered valuer. Payment will be made within a timeframe decided by the Board, subject to applicable laws and NCLT directives, via cheque, demand draft, NEFT, or RTGS after deducting applicable taxes.

Mr. Ramaswamy Varun Karthikeyan (Vice Chairman & Managing Director) and/or Mr. K. Ramasamy (Executive Chairman) are authorized to take necessary steps and actions related to the Capital Reduction, including engaging professionals, obtaining approvals, filing documents, and making necessary modifications. The Board is authorized to withdraw the application/petition filed before the Hon'ble NCLT for the Capital reduction at any stage, in case any changes and/or modifications suggested or required to be made in the application/petition or any condition imposed, whether by the NCLT and/or any other regulatory authority are, in their view, not in the interest of the Company and/or if the application/petition cannot be implemented otherwise, and to do all such deeds, acts and things as any of them may deem necessary and desirable in connection therewith and incidental thereto.

Roots Multiclean Limited was incorporated on February 24, 1992. The present authorized, issued, subscribed, and paid-up capital of the company is Rs.2,00,00,000/- divided into 20,00,000/- of Rs. 10/- each. The company, a closely held public limited entity and a joint venture between the Indian Promoters (Roots Group) and M/s.Hako Werke GmbH & Co., West Germany (JV Partner) with over 200 shareholders, intends to reduce the number of shareholders and transition into a private limited company for operational efficiency and to avail privileges under the Companies Act, 2013. As the majority of shareholders in number holding 2,82,640 equity shares aggregate to a mere 14.13% of the total paid-up share capital, it is proposed to reduce the capital in order to provide an exit to such shareholders. The Board of Directors decided on January 10, 2024, to provide an exit to the Identified Shareholders, and the company can comfortably make the payouts from cash reserves and internal accruals.

The Capital Reduction is proposed under Section 66 of the Companies Act, 2013, subject to NCLT sanction and other regulatory approvals. The reduction will decrease the issued, subscribed, and paid-up equity share capital to INR 1,71,73,600. CA M.Pragadeeshkanna was appointed on November 13, 2024, as the registered valuer to determine the fair value of the equity shares, with a valuation report dated January 27, 2025. The fair price was determined to be Rs. 2,000 per share based on the Earning Method (DCF). The total consideration is estimated at Rs.56.53 Crores, while the company's standalone reserves and surplus as of March 31, 2024, stood at Rs.27,944.58 Lakhs. The company will deposit the total consideration payable to the Identified Shareholders in relation to the Capital Reduction after deducting appropriate withholding taxes in a special bank account, which will then be issued via cheque, demand drafts, NEFT, or RTGS to the Identified Shareholders. The Company has not accepted any deposits and is therefore not in arrears in the repayment of any deposits or interest payable thereon. No investigation / proceedings are pending under Section 210 to Section 229 or any other provisions of the Act against the Company. The Board has approved the Capital Reduction on January 27, 2025, recommending the special resolution in Item No.2 for shareholder approval.

The notice also includes details on proxy forms and attendance slips for the EGM, outlining the procedure for member representation and participation. A route map to the venue is provided.