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2016 (10) TMI 516 - GUJARAT HIGH COURT

2016 (10) TMI 516 - GUJARAT HIGH COURT - TM - Scheme of arrangement of demerger - Held that:- Considering all the facts and circumstances and taking into account all the contentions raised by the affidavits and reply affidavits, and the submissions during the course of hearing, as satisfied that the observations made by the Regional Director, Ministry of Corporate Affairs, have been redressed satisfactorily. The prayer for amendment made in Company Application as also the amendments sought by th .....

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dment application is hereby sanctioned. - Prayers in terms of paragraph 18(a), (b) and (c) of the Company Petition are hereby granted. The restructure of Capital of Aura in form of the utilization of securities Premium as well as Reduction of Issued, Subscribed and Paid Up Equity Share Capital is specifically sanctioned. The minute under Sec. 103 is hereby approved. Prayers in terms of paragraph 15 (a) of the Company Petition paragraph 16(a) in case of Company Petition No. 277 and 278 of 201 .....

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earned Central Government Counsel appearing for the Regional Director was served with the copy and the Regional Director has also filed his response to the amendment as well. 2. These are the petitions filed by the petitioner companies for sanction of a Composite Scheme of Arrangement involving demerger and transfer of the Demerged Undertakings, Amalgamation of the Residue Undertaking and Restructure of Share Capital between Aura Securities Private Limited, Anagram Knowledge Academy Limited, May .....

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vate Limited company and is, inter alia, Promoter of Arvind Limited. The Company is mainly engaged in business of Trading and Investment activity. Anagram Knowledge Academy Limited, the Petitioner Demerged Company2 is a Limited Company of the promoter group of Arvind Limited, primarily engaged in the business of providing coaching and training for various courses and trading of Clothes and Garments. It has been realized by the Board of Directors of the Petitioner Companies that the business of t .....

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in MayurPrakash, the Resulting Company, by way of demerger. It is envisaged that the said proposal shall be in the larger interest of the shareholders, creditors and employees of all the Petitioner Companies and help to achieve effective future growth of the Resulting Company and the Transferee Company. It is further envisaged to bring specific benefits as follows: • Consolidation of group s business and operations; • Streamlining of current organization structure; • Reduction in .....

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r, vide clause 24 of the scheme, in case of Aura, the Demerged Company1, restructure of its Share Capital is proposed in order to make its Balance Sheet realistic upon the demerger and transfer of the Demerged Undertaking. The company has proposed the restructure in form of utilization of its Securities Premium Account as well as Reduction of Issued, Subscribed and Paid up Share Capital; for adjusting the value of the net assets of the Demerged undertaking in its books of accounts. The said prop .....

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ever, it has been pointed out that considering the issue of new shares by both these companies to the shareholders of the Demerged/ Transferor Companies, there will not be any Net Reduction of Capital. 5. It has been pointed out that vide the orders dated 15th June 2016 passed in Company Application No. 255 of 2016 and Company Application No. 274 of 2016 the meetings of the Equity and Preference Shareholders, Secured and Unsecured Creditors of the Demerged Company1 were dispensed with in view of .....

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Unsecured Creditors of these Companies were dispensed with in view of the consent letters of all concerned parties, being placed on record. There were no Secured Creditors of any of these companies. 6. The substantive petitions were filed by all the Petitioner Companies and the same were admitted vide order dated 28th June 2016. The public notices for the same were duly advertised in the newspapers 'Indian Express English daily and Gujarat Samachar', Gujarati daily, both Ahmedabad editio .....

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It has been contended by the Petitioner Companies that based on the recommendation of the Statutory Auditor of Aura Securities Limited, the Board of Directors of all the Petitioner Companies had resolved to amend the proposed Scheme with regard to Clause 1.3 of the Scheme pertaining to the Appointed Date being amended from 1st April 2016 to 1st July 2016. The second amendment is proposed in Clause 34.1 of the Scheme pertaining to the Accounting Treatment in the books of Avadh, the Transferee Com .....

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e granted at the time of sanctioning the proposed Scheme. Aura, The petitioner Demerged/ Transferor company which is proposed to be dissolved after the amalgamation of the residue undertaking with Avadh, submitted the Audited Financial statements of the Company as at 30th June 2016 to the Official Liquidator and its Chartered Accountant for the scrutiny of the same alongwith the amendment applications. The copy of the said amendment applications were also served on the Regional Director for thei .....

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ccounts and records of the Transferor Company for a period of 8 years from the date of sanctioning the scheme and not to dispose off the same without prior permission of the Central Govt. The Petitioner companies are accordingly directed to preserve the books and records of the Transferor Company for a period of 8 years from the date of sanctioning the scheme and not to dispose of the same without prior permission of the Central Govt. It is hereby further directed that even after the scheme is s .....

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, Ministry of Corporate Affairs, whereby a few observations were made. 10. The attention of this court is drawn to the Common Additional Affidavit dated 22nd September 2016, as filed by Mr. Jayesh N. Thakkar, the Authorised Signatory for the Petitioner Companies, which provides requisite explanations for the issues raised by the Regional Director. (i) The observations made vide para 2(a), (b) and (c) are factual statements and do not require any response. (ii) The observation made vide para 2(d) .....

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)The observation of the Regional Director made vide para 2(e) pertains to the qualification of the Statutory Auditor for non compliance of AS_1 in case of Anagram Knowledge Academy Limited as the accumulated losses of the company has far exceeded the Capital base. In this regard, it has been submitted that upon the Scheme being effective, the said Petitioner Company will bring in Additional Capital to comply with the condition of Going Concern in future date. For the purpose, the Promoter of the .....

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ditor, the same have already been disclosed to all the stakeholders. (iv) The observation of the Regional Director made vide para 2(f) pertains to the NBFC status of Aura Securities Private Limited and registration with the Reserve Bank of India. It has been observed by the Regional Director that the NOC from the RBI has not been submitted by the said petitioner company. In this regard, it has been submitted that it is not necessary to obtain any prior approval from the Reserve Bank of India. Th .....

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mounts to deviation from the said standard, the Petitioner companies hereby undertake to make the requisite disclosures in the first financial statements after the Scheme is sanctioned by the Hon ble High Court. With regard to the second part of the said observation, it is respectfully submitted that the Securities Premium Account so created shall be utilized in accordance with the applicable provisions of law with regard to the utilization of the Securities Premium Account. Hence, no further di .....

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s on the date of the sanction of the Scheme, for the adjudication of stamp duty payable for the said transfer. In view of the same, it is not necessary to issue any further directions to the Petitioner Companies. (vii)The observation of the Regional Director made vide para 2(i) pertains to the proposed transfer of part of the Authorised Capital of Aura Securities Limited, the Demerged Company to Mayur Prakash Trading and Commercial Private Limited, the Resulting Company as envisaged in Clause 5 .....

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has been submitted that the same shall be carried out subject to the approval about the availability of the name by Registrar of Companies. It has been further clarified that the Petitioner shall pay the requisite payments of fees and/or charges for the proposed alteration. The petitioners further agreed to pay the applicable stamp duty on the transfer of assets pursuant to the order of this Hon ble court, sanctioning the scheme. (ix) The observation of the Regional Director made vide para 2(k) .....

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e Income Tax Act and rules. In view of the same, no further directions are required to be issued to the petitioner companies in this regard. (x) The Regional Director has confirmed that there are no complaints received against the petitioner companies in the office of the Registrar of Companies and there are no other objections to the scheme. 11. Since the aforesaid affidavit of the Regional Director was already filed before the service of the amendment application, the Regional Director has fil .....

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made by the Regional Director, Ministry of Corporate Affairs, have been redressed satisfactorily. The prayer for amendment made in Company Application Nos. 379 to 382 of 2016 as also the amendments sought by the petitioner companies are hereby granted. I have come to the conclusion that the present scheme of arrangement in its Modified Form, is in the interest of the shareholders and creditors of all the companies as well as in the public interest and the same deserves to be sanctioned. The mod .....

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