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TMI Blog2017 (7) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... oner Company IV/ Resulting Company. A perusal of the petition discloses that initially the application seeking the dispensation of the meetings of equity shareholders, secured and unsecured creditors were filed before the Hon'ble High Court of Delhi in CA No.89/2016. The Hon'ble High Court of Delhi vide its order dated 27.7.2016 was pleased to dispense with the requirement of convening the meetings of the equity shareholders and secured creditors of each of the Petitioner companies and for dispensation of the meeting of the Unsecured Creditors of Petitioner Company-I in view of their consents having been obtained and produced before it and in relation to the Unsecured Creditors of Petitioner Companies-II, III and IV were concerned, directions for convening the meetings were given. While in the process of convening the meeting of Unsecured Creditors as directed, it is represented that Appointed Date 01.01.2016 originally fixed at the time of filing the 1st Motion was changed to 01.04.2016 and that the same was approved by the Unsecured Creditors who had mooted the change in the first place as submitted by the Petitioner Companies. The meetings as evidenced by the Chairman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discloses that notices have been issued to the Regional Director, Northern Region as well as to the Official Liquidator attached to the High Court, Delhi in compliance with the order dated 30.09.2016 and in proof of the same acknowledgement made by the respective offices have also been enclosed. The Counsel for the Petitioners had filed the Affidavit of Compliance dated 23.02.2017 stating that they have not received any objections from the third party and public at large for the purpose of sanction to the present Scheme of Amalgamation. The above statement is taken on record. 6. Further, it is also seen that pursuant to the directions from Regional Director, Northern Region, a copy of the Company Petition has also been served on the jurisdictional Income Tax Officer of the companies involved in the scheme and the Regional Director had also sent communication dated 25.11.2016 to the Pr. Commissioner of Income Tax Delhi, Delhi and that no specific comments have been received from the Office of Income Tax in relation to the scheme. Pursuant to the notices issued, the Official Liquidator sought information from the petitioner company and based on the information received, the Officia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and Remuneration of Managerial Personnel) Rules, 2014 the provisions of Section 203 will be applicable only to listed companies and every other public company having a paid up-capital of ten crore rupees or more. Since the Demerged Company is a private limited company though having paid-up capital in excess of the prescribed limits, it is contended that Section 203 is not attracted to it. There is credence in relation to the submission of the petitioners and in the circumstances the observations of the RD in this regard does not merit further consideration. In relation to the second of the observations regarding non-compliance with the statutory formalities of filing annual returns and balance sheets for the Transferor Company I, Transferee Company and Demerged Company for the financial year 2015-16, the petitioners represent that the relevant compliances have been made as stated in their reply affidavits dated 28.02.2017 as reproduced here under 'That the Transferor Company-I and Transferee Company have their statutory documents, i.e., annual return (e-from MGT-7) and balance sheet (e- form AOC-4) for the financial year 2015-16 on the following dates: Particulars Statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the investments of the Demerged Company in BBM Heavy Machinery Private Limited are not forming part of the Demerged Undertaking and the said investments will continue to remain with the Demerged Company pursuant to the sanction of the Scheme by this Hon'ble Bench of the Tribunal. The management of the Company was confident of realizing the full receivable in due course of time and hence they have neither considered diminution in the value of investments of Demerged Company of the joint venture, i.e. BBM Heavy Machinery Private Limited nor recorded adjustment against the same. The fact of the same is also recorded in Note 43 of the Notes to the financial statements of the Demerged Company for the financial year ended 31.03.2016. A copy of the financial statements of the Demerged Company for the financial year ending 31.03.2016 is annexed hereto and marked as Annexure-3 Without prejudice to the above, the Demerged Company hereby undertakes that in any case it will comply with the applicable provisions of the Companies Act, 1956/2013 and relevant accounting standards issued by ICAI.' In connection with above explanation given by the Petitioners, we are not convinc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is needless to say that the respective Company's Auditor is required to issue the certificate with utmost care highlighting that the accounting treatment envisaged in the scheme is in compliance with the Accounting Standards prescribed or Generally Accepted Accounting Principles or if not so bringing to the attention in the certificate itself, where the accounting treatment deviates from the prescribed accounting standards and reasons therefor and where there is none or not applicable, to also highlight the same. Thus, the certificate of Company's Auditor has a vital bearing in the scheme of things and is required therefore not to be pedantic or mechanical and as already stated, to be given with utmost care and diligence, understanding the importance of it. Thus in the present instance the production of certificate becomes imperative from the auditor of the Demerged Company who had in the first place qualified at the time of certifying the financial statements for the year ended 31.03.2016 in his/its report that the accounting treatment of Investments was not in consonance with the prescribed Accounting Standard for the year 2015-16, as the certificate would have brought ..... X X X X Extracts X X X X X X X X Extracts X X X X
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