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TMI Blog2007 (11) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... namely, (1) Times of India (English) and (2) Nav Bharat Times (Hindi) both dated 13.8.2007 each containing the advertisement of the said notice convening the said meetings directed to be held by the said order dated 17.7.2007, the affidavit of Shri Gunwant Dara and Ms. Purnima Bat Kak, chairpersons, filed on 17.9.2007 and 31.8.2007 showing the publication and despatch of the notices convening the said meetings, the reports of the chairperson of the said meetings as to the result of the said meetings and upon hearing Shri Satwinder Singh, Advocate, for the Petitioners, Ms. Manisha Tyagi, Advocate, for the official liquidator, and Mr. R.D. Kashyap, Dy. Registrar of Companies, in person, and it appearing from the reports that the proposed scheme of arrangement has been approved unanimously without any modification by the said equity shareholders, secured and unsecured creditors of the transferor company present and voting either in person or by proxy and upon reading the affidavit dated 31.10.2007 of Shri Rakesh Chandra, Regional Director, Northern Region, Ministry of Company Affairs, Noida, on behalf of Central Government stating that the individual assets and liabilities and values ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f value of the unsecured creditors present voted in favour of the scheme. The court ordered that, in this view of the matter, the objection raised by the Regional Director stands satisfied; and considering the affidavit of Shri A.K. Chaturvedi, official liquidator, filed on 31.10.2007 stating therein that the affairs of the transferor company have not been conducted in a manner prejudicial to the interest of its shareholders or creditors or to public interest; and there being no investigation proceedings pending in relation to the Petitioner companies under Section 235 to 251 of the Companies Act, 1956. 2. This Court doth hereby sanction the scheme of arrangement set forth in Schedule-I annexed hereto and doth hereby declare the same to be binding on all the shareholders and creditors of the transferor and transferee companies and all concerned and doth approve the said scheme of arrangement with effect from the appointed date, i.e., the date on which a certified copy of the order of the court, sanctioning the scheme, is filed with the Registrar of Companies, Delhi and Haryana. 3. And this Court doth further order: (1) That all the property, rights and powers of the telecom inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osited in the common pool fund of the official liquidator. ANNEXURE SCHEME OF ARRANGEMENT BETWEEN Bharti Airtel Limited Transferor Company and Bharti Infratel Limited Transferee Company and THEIR RESPECTIVE SHAREHOLDERS The Scheme is divided into the following parts: (A) PART I deals with the Definitions, Share Capital, Preamble and Rationale for the Scheme; (B) PART II deals with the Demerger of Telecom Infrastructure of the Transferor Company and merger thereof with the Transferee Company; (C) PART III deals with the Issue of Shares and Accounting Treatment in Books of the Transferor Company and Transferee Company; (D) PART IV deals with the General Clauses, Terms and Conditions; and (E) PART V deals with Other Terms and Conditions. PART I DEFINITIONS, SHARE CAPITAL, PREAMBLE AND RATIONALE FOR THE SCHEME 1.1 Definitions In this Scheme of Arrangement (as defined hereunder), unless inconsistent with the subject or context, the following expressions shall have the following meaning: 1.2.1 'Act' or 'The Act' means the Companies Act, 1956, or any statutory modification or re-enactment thereof for the time being in force; 1.1.2 'Appointed Date&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eptable to the transferor company and the transferee company. Explanation: In case of any doubt regarding whether any particular asset or liability forms a part of the Telecom Infrastructure undertaking or otherwise, the same shall be resolved mutually by the board of directors of the transferor company and the transferee company; 2.2.7 'Transferee Company' or 'Infratel' means Bharti Infratel Limited, a company incorporated under the Companies Act 1956 and having its registered office at H-5/12, Mehrauli Road, New Delhi -110030; 1.1.8 'Transferor Company' or 'Airtel' means Bharti Airtel Limited, a company incorporated under the Companies Act 1956 and having its registered office at H-5/12, Mehrauli Road, New Delhi -110030; 2.2.9 'Scheme' or 'the Scheme' or 'this Scheme' means this scheme of arrangement as set out herein and approved by the board of directors of the transferor company and the transferee company, subject to such modifications as the court may impose or the transferor company and the transferee company may prefer and the court may approve; All terms and words not defined in this scheme shall, unless repugnan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or vesting of the Telecom Infrastructure undertaking of the transferor company in the transferee company, pursuant to the relevant provisions of the Companies Act, 1956 and other applicable laws. The transferee company is a wholly owned subsidiary of the transferor company. This scheme also provides for various other matters consequential or otherwise integrally connected therewith. (C) Rationale for the scheme 1. Telecommunications and other information and communication technologies play an increasingly important role in the growth of an economy. Considering this, various countries have put in place mechanisms to lower barriers of entry, so that the customers can choose among competing telecommunications service providers. 2. In order to do so, the telecommunications service providers should be in a position to access certain key infrastructure facilities at reasonable terms, so that they can roll out their networks quickly and efficiently. Furthermore, duplication of these facilities is uneconomic or undesirable. There has been increasing resistance regarding the duplication of support structures. It is not in the public interest to have multiple sets of poles or towers on st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separately the actual economic value add arising out of Telecom Infrastructure business and telecommunication services businesses. 7. The management of the transferor company and the transferee company believe that the scheme of arrangement would benefit the respective companies and other stake holders of respective companies on account of the following reasons: (a) Reduced set-up and operating costs resulting in cost efficiency coupled with a greater financial flexibility; (b) Segregation of the business of providing telecommunication services and the business of providing the Telecom Infrastructure facilities, thereby enabling the companies to concentrate on its core business activities; (c) Improved quality of services to its customers by establishing highest service standards through operational agreements; and (d) 'To increase speed of roll-out and to increase efficiency and to improve sharing of infrastructure. PART II DEMERGER OF TELECOM INFRASTRUCTURE UNDERTAKING OF THE TRANSFEROR COMPANY AND MERGER THEREOF WITH THE TRANSFEREE COMPANY 2. Transfer and vesting of telecom infrastructure undertaking of the transferor company into the transferee company 2.1 With ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being effective, such agreements shall be assigned in favor of the transferee company without any further act or deed. Any statutory licenses, authorizations, statutory rights, permissions, approvals, sales tax, service tax, excise, provident fund, ESI, DGFT, Reserve Bank of India, Importer-Exporter Code etc. or other registrations, no-objection certificates or consents to carry on the operations pertaining to the Telecom Infrastructure shall stand transferred and vested in the transferee company without any further act or deed, and shall be appropriately mutated by the statutory authorities' concerned therewith in favour of the transferee company upon the vesting and transfer of Telecom Infrastructure pursuant to this scheme so as to empower and facilitate the continuation of operations pertaining to the Telecom Infrastructure undertaking of Transferor Company in the Transferee Company without any hindrance from the Appointed Date. 2.5 Upon the coming into effect of this Scheme, the debts, advances, liabilities and obligations pertaining to the Telecom Infrastructure of Transferor Company shall, without any further act or deed be stand transferred to the Transferee Company a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company shall record the Telecom Infrastructure at their respective fair values as on the for appointed date. 3.2.2 The transferee company will credit an amount equal to the fair values of Telecom Infrastructure as general reserve, which shall constitute Free Reserves available for all purposes as the transferee company at its own discretion considers proper including in particular for off-setting any additional depreciation that may be charged by the transferee company. Explanation: Additional depreciation means depreciation provided, charged or suffered by the transferee company on the assets transferred by the transferor company under the scheme in excess of what would be chargeable on the original book value of these assets as if there had been no revaluation on transfer of these assets and basing the cost of these assets on the historical cost as appears in the books of the transferor company. The reserve as above shall be treated as arising from this scheme and shall not be treated as a reserve created by the transferee company. 3.3 In the books of the transferor company 3.3.1 Upon the scheme becoming effective (a) the transferor company shall revalue all or such of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All legal proceedings of whatsoever nature by or against the Transferor Company pending and/or arising before the Effective Date and relating to Telecom Infrastructure undertaking, shall not abate or be discontinued or be in any way prejudicially affected by reason of the Scheme or by anything contained in this scheme but shall be continued and enforced by or against the transferee company, as the case may be in the same manner and to the same extent as would or might have been continued and enforced by or against the transferor company. 4.2.2 After the effective date, if any proceedings are taken against the transferor company in respect of the matters referred to in Sub-clause 4.2.1 above, the transferor company shall defend the same at the cost of the transferee company, and the transferee company shall reimburse and indemnify the transferor company against all liabilities and obligations incurred by the transferor company in respect thereof. 4.2.3 The transferee company undertakes to have all legal or other proceedings initiated by or against the transferor company referred to in clauses 4.2,1 or 4.2.2 above transferred into its name and to have the same continued, prosecuted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trusts, retirement fund or benefits and any other funds or benefits created by the transferor company for the employees related to the Telecom Infrastructure (collectively referred to as the 'funds'), the funds and such of the investments made by the funds which are referable to the employees related to the Telecom Infrastructure being transferred to the transferee company in terms of Clause 4.4.1 above shall be transferred to the Transferee Company and shall be held for their benefit pursuant to this scheme in the manner provided hereinafter. The funds shall, subject to the necessary approvals and permissions and at the discretion of the transferee company, either be continued as separate funds of the transferee company for the benefit of the employees related to Telecom Infrastructure or be transferred to and merged with other similar funds of the transferee company. In the event that the transferee company does not have its own funds in respect of any of the above, the transferee company may, subject to necessary approvals and permissions, continue to contribute to the relevant funds of the transferor company, until such time that the transferee company creates its own f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hereby authorized to take all such steps as may be necessary, desirable or proper to resolve any doubts, difficulties or a questions whether by reason of any directive or orders of any other g" authorities or otherwise howsoever arising out of or under or by virtue of the scheme and/or any matter concerned or connected therewith. 5.3 Conditionality of the scheme This scheme is and shall be conditional upon and subject to: 5.3.1 The scheme being approved by the requisite majorities in number and value of such cases of persons including the members and / or creditors of the transferor company and the members and/or creditors of the transferee company as may be directed by the court or any other competent authority, as may be applicable. 5.3.2 The scheme being sanctioned by the court or any other authority under Sections 391 to 394 of the Act. 5.3.3 Certified copies of the orders of the court sanctioning the scheme being filed with the Registrar of Companies, Delhi & Haryana by the transferor company and the transferee company. 5.4 Effect of non-receipt of approvals 5.4.3 In the event of any of the said sanctions and approvals referred to in the preceding clause not bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect of the scheme, all permissions, licenses, approvals, incentives, remissions, tax-incentives, consents, sanctions, and other authorizations, pertaining to the Telecom Infrastructure undertaking, to which the transferor company is entitled to shall stand vested and permitted or continued by the order of sanction of this hon'ble court in the transferee company, therefore the transferee company shall file the scheme, for the record of the statutory authorities who shall take it on file, (pursuant to the sanction orders of the court. The transferee company is authorised to take all such steps on behalf of the transferor company as may be necessary to give effect to the provisions contained above. 5.8 Upon the scheme being sanctioned the Telecom Infrastructure undertaking of the transferor company shall vest with transferee company with effect from the appointed date, [remainder of the page is intentionally left blank] SCHEDULE OF PROPERTIES OF BHARTI AIRTEL LIMITED PART I (Illustrative (and not exhaustive) short description of the Freehold Property comprised in the Transferred Undertaking of Bharti Airtel Limited) 1. Rooftop of building on which telecom tower is situated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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