State the salient features of Reconstruction that differs with Demerger.

Reconstruction denotes a wider term to revamp the company by change in capital structure, financial restructuring including alienating any undertaking or substantial undertaking to another company in the form of demerger, reverse merger or amalgamating with any other company. In the process of reconstruction, a new company may also be formed to takeover the properties, liabilities, assignments and obligation of the existing company and the existing company is dissolved after the process of liquidation. The transferee new company pays towards consideration of takeover issues shares and other securities instead of cash to the shareholders of existing transferor company. On the other hand 'demerger' denotes de-linking of an undertaking or substantial part of undertaking of transferor company in favour of transferee company through process of compromise or arrangement in terms of sections 230 to 240 of the Companies Act, 2013 approved by NCLT. All the properties and liabilities attributable to the relevant undertaking are transferred to the resulting transferee company. As such valuation report by a registered valuer is invariably necessary whereas in the case of reconstruction, requirement of valuation report depends on the circumstances. Thus reconstruction includes demerger but demerger is not otherwise.