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2015 (5) TMI 731 - HC - Companies LawApplication for Scheme of Amalgamation under Sections 391(1), 393 & 394 read with Sections 100 to 104 of the Companies Act, 1956 - Regional Director's observations regarding Appointment date and Sectoral cap under FDI policy duly addressed - Held that:- In reply to the first observation regarding appointment date, it was submitted by the petitioner companies in the affidavit dated 23rd March, 2015 of Sh. Ki Ho Park, authorized representative of the petitioner companies that between 31st March, 2014 (i.e. the date of audited accounts) and 1st May, 2014 (i.e. the appointed date of amalgamation), there has been no material financial changes in the accounts of the transferor and transferee companies apart from the investment by Hitachi Metals Singapore Pte. Limited and Namyang Metals Company Limited and, consequently, the deferred tax has been written off to the extent of carried forward losses. It is further submitted that the joint valuation report submitted along with CA(M) 115/2014 takes into account the investment by Hitachi Metals Singapore Pte. Limited of ₹ 11,71,37,280/- in the transferor company; of ₹ 12,53,66,464/- in the transferee company; and the investment of Namyang Metals Company Limited of ₹ 17,57,05,920/- in the transferor company; and of ₹ 18,80,49,696/- in the transferee company for the purpose of conducting the valuation as on 30th April, 2014 and the consequent adjustments made in the deferred tax carried in the books. Therefore, the said investment does not have any adverse effect on the proposed Scheme of Amalgamation. In reply to second observation regarding Sectoral Cap of FDI policy, it was submitted by the petitioner companies that at present the foreign shareholders are holding 51% of paid-up share capital of the transferee company and remaining 49% is held by the resident shareholders, and the current shareholding held by the foreign shareholders are within the permitted sectoral cap under the provisions of Foreign Direct Investment Policy (FDI) issued by RBI i.e. upto 100% FDI under the automatic route. The transferee company undertakes that subsequent to sanction of the Scheme, the allotment of shares to the shareholders of the transferor company including allotment of shares to the foreign shareholders will continue to be within the permitted sectoral cap under the FDI. The Assistant Registrar of Companies has stated that after considering the reply of the petitioner, the Regional Director had no further objections. In view of the aforesaid, the observations raised by the Regional Director stand satisfied. Considering the approval accorded by the shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Regional Director, Northern Region, and the Official Liquidator not raising any objection to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under Sections 391 and 394 read with Section 100 of the Companies Act, 1956. - Application for scheme of amalgamation approved.
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