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TMI Blog2022 (1) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... as under:- (i) Simplification of group structure by eliminating multiple companies thus enabling focus on core competencies and unlocking of value. (ii) Greater efficiency in cash management of amalgamated entity and unfettered access to cash flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities, to maximize shareholder value. (iii) Cost savings are expected to flow from more focused operational efforts, rationalization, standardization and simplification of business processes, productivity improvements, improved procurement, usage of common resource pool like human resource, administration, finance, accounts, legal, technology and other related functions, leading to elimination of duplication and rationalization of administrative expenses. (iv) Healthier and larger balance sheet of both entities is expected to improve the credit profile, thereby enhancing the competitive positioning. (v) The Scheme will help amalgamated entity in sharpening its competitiveness and developing its core competencies, in the long term, through cost savings and benefit of economies of scale. It would result in greater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sharvil Suthar, Independent Practicing Company Secretary as the Scrutinizer of the aforesaid meetings and gave further directions to comply with various stipulations contained in the Order including filing of the Chairman's Report. 10. It was further directed by order dated 02.12.2020 to publish the notice of meetings in two newspapers "Indian Express" in English and Gujarati translation thereof in Gujarati daily "Sandesh" having circulation in Ahmedabad. The petitioner companies stated that newspaper publications were made in English daily "Indian Express" and Gujarati daily "Sandesh" Ahmedabad editions on 23rd December, 2020 and affidavits of service and publication dated 6th January 2021 were duly filed with this Tribunal by the petitioner companies. 11. This Tribunal further directed issuance of notices to statutory authorities, viz., (i) Central Government through the Regional Director, North-Western Region, (ii) Registrar of Companies, Gujarat, (iii) concerned Income Tax Authorities, (iv) Reserve Bank of India, for both the companies; and (v) Official Liquidator, Gujarat, only for the Transferor Company along with a copy of the Scheme and other requisite documents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the Tribunal on 2nd March 2021. The Office of the Official Liquidator also filed a report dated 17th March 2021. The Reserve Bank of India filed its representation dated 25th January 2021. 16. Following are the observations of Regional Director (RD) in its representation dated 02.03.2021:- i) Paragraph-2(a) with regard to the compliance of notice under Section 239(5) of the Companies Act, 2013, in paragraph-2(b) with regard to nature of the scheme/share exchange ratio and in paragraph-2(d) is with regard to rationale of the proposed Scheme of Amalgamation. ii) Paragraph-2(c) refers to the consolidated authorized share capital of the Transferee Company as envisaged under Clause No. 12 of the Scheme. iii) Paragraph-2(e) with regard to the status of the Transferee Company on MCA portal. iv) Paragraph-2(f) with regard to the compliance of provisions of FEMA and RBI guidelines as there are Foreign National/NRI/Foreign Bodies Corporate are holding shares in the both the Petitioner Companies. v) Paragraph-2(g) refers to the Appointed Date of the Scheme vi) Paragraph-2(h) with regard to the Secured Creditors of the Transferor Company vii) Paragraph-2(h) regarding the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mply with the applicable provisions while implementing the Scheme. The petitioner companies have confirmed the service of notice to the Reserve Bank of India as per the directions of the Hon'ble Tribunal vide order dated 2nd December 2020. The Reserve Bank of India vide its letter dated 25th January 2021 has indicated that the petitioner companies are required to comply with all applicable rules under FEMA Act and the RBI guidelines. The petitioner companies have undertaken to comply with all applicable rules and guidelines in this regard. (v) Vide para 2(g) of the affidavit, the Regional Director has referred to MCA Circular No. 09/2019 dated 21st August 2019 with reference to the Appointed Date envisaged under the present scheme which is 1st April 2019. It is pointed out that as per the said circular, if the Appointed Date is antedated beyond a period of one year from the date of filing of the Application, the justification for the same has to be specifically brought out in the Scheme and it should not be against Public Interest. It has been submitted by the Petitioners that in the present case, the Petitioner Companies had proposed to initiate the proceedings before the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs that a copy of the said Additional Affidavit in response to the representations have been served upon the Regional Director, the Registrar of Companies as well as the Office of the Official Liquidator. 20. It is stated that no Representations were received from the Income Tax Authorities or any other regulatory authority for any of the companies. However, it is submitted that on the basis of the records of the Petitioner Companies, as on as on 28th February 2021, there are no disputed and/or undisputed outstanding demand for income tax for the petitioner Transferor company. There are small outstanding demands against the Petitioner Transferee Company, for which the appeals have been heard by the Income Tax Appellate Tribunal and the orders are awaited. It is further confirmed, that the Transferee Company shall be liable for any demand already created or become payable due to any of the proceedings related to Income Tax department in future for outstanding demand prior to the present Scheme of Arrangement. The Petitioner Companies undertake to abide by all the applicable provisions of the Income Tax Act. 21. It was also submitted that none of the companies are Non-Banking Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly the same shall pursuant to Section 232 of the Act, be transferred to and vested in the Transferee Company for all the estate and interest of the Transferor Company therein but subject nevertheless to all charges now affecting the same, if any. [other than (here set out any charges which by virtue of the compromise or arrangement are to cease to have an effect]. 4. All the liabilities and duties of the Transferor Company be transferred without further act or deed to the Transferee Company and accordingly the same shall pursuant to Section 232 of the Act, and become the liabilities and duties of the Transferee Company. 5. All proceedings, if any, now pending or against the Transferor Company be continued by or against the Transferee Company. 6. The Petitioner companies within thirty days of the date of receipt of this order, cause a certified copy of this order to be delivered to the Registrar of Companies for registration and on such certified copy being so delivered, the entire Undertaking of the Transferor Company shall stand transferred to the Transferee Company and the Registrar of Companies shall place all documents relating to the Transferor Company to the file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable, and also read with Section 2(1B) and other relevant provisions of the Income Tax Act 1961 (IT Act), as applicable for the amalgamation of the Transferor Company into and with the Transferee Company, on a going concern basis. 1. DESCRIPTION OF COMPANIES AND BACKGROUND A. Perlcon Premix Private Limited is a Private Limited Company incorporated on 11th July, 2010 under the provisions of the Companies Act, 1956, with the Registrar of Companies, Gujarat, Dadra and Nagar Havelli. The Corporate Identification Number of the Company is U24220GJ2010PTC061519. The Company has its registered office at 302, "Akshay", 53, Shrimali Society, Navrangpura, Ahmedabad-380 009 in the state of Gujarat. The company is engaged in manufacturing and trading of all types of dry mortar mix, plasters, ready mix plasters and concrete etc. B. Amol Minechem Limited is a Public Limited Company incorporated on 2nd July, 1979 under the provisions of the Companies Act 1956, with the Registrar of Companies, Gujarat in the name and style of "Amol Dicalite Limited". Subsequently, the company changed its name from "Amol Dicalite Limited" to "Amol Minchem Limited" as approved by Registrar of Companies, Ahmeda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /or any re-enactment thereof; 3.2 "Transferor Company" means Perlcon Premix Private Limited or 'PPPL' a company incorporated under Companies Act, 1956 having its registered office at 302, "Akshay", 53, Shrimali Society, Navrangpura, Ahmedabad-380 009; 3.3 "Transferee Company" means Amol Minechem Limited or 'AML' a company incorporated under Companies Act, 1956 having its registered office at 401, "Akshay", 53, Shrimali Society, Navrangpura Ahmedabad-380 009; 3.4 "Appointed Date" means 1st April, 2019, or such other date as may be directed by the NCLT and is the date with effect from which the Scheme shall upon sanction by the NCLT, be deemed to be operative; 3.5 "Board of Directors" or "Board" in relation to each of the Companies, as the case may be, means the Board of Directors of such companies and shall, unless repugnant to the context, include a committee of directors or any person authorized by the Board of Directors or such committee of Directors; 3.6 "Effective Date" means the date on which the certified copies of the Order of National Company Law Tribunal, Ahmedabad Bench under Section 230 to 232 and other applicable provisions of the Companies Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, brands, sub-letting tenancy rights, leave and license permissions, goodwill, other intangibles, industrial and other licenses, approvals, permits, authorisations, trademarks, trade names, patents, patent rights, copyrights, and other industrial and intellectual properties and rights of any nature whatsoever including know-how, websites, portals, domain names, or any applications for the above, assignments and (sic) in respect thereof, import quotas and other quota rights, right to use and avail of telephones, telex, facsimile, email, internet, leased lines and other communication facilities, connections, installations and equipment, electricity and electronic and all other services of every kind, nature and description whatsoever, provisions, funds, and benefits (including all work-in progress), of all agreements, arrangements, deposits, advances, recoverable and receivables, whether from government, semi-government, local authorities or any other Person including customers, contractors or other counter parties, etc., all earnest monies and/or deposits, privileges, liberties, easements, advantages, benefits, exemptions, licenses, privileges and approvals of whatsoever nature an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them under the Act, as applicable, the Income Tax Act and other applicable laws, rules, regulations, bye-laws, as the case may be or any statutory modification or re-enactment thereof for the time being in force. 4. SHARE CAPITAL 4.1 The capital structure of the Transferor Company as on 31st March 2020 is as under: There has been no change in the issued, subscribed and paid up share capital of PPPL till date. 4.2 The capital structure of the Transferee Company as on 31st March, 2020 is as under: There has been no change in the issued, subscribed and paid up share capital of AML till date. 5. TRANSFER AND VESTING OF THE UNDERTAKING 5.1 Upon the coming into effect of the Scheme with effect from the Appointed Date, the Undertaking of the Transferor Company shall, pursuant to the sanction of the Scheme by the NCLT and pursuant to the provisions of Section 230 - 232 of the Companies Act, 2013, and all other provisions of applicable law, if any as applicable, will be and shall stand transferred to and vested in and/or be deemed to have been transferred to and vested in the Transferee Company, as a going concern, in accordance with Section 2(1B) of the Income Tax Act, 1961 without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its, loans and advances, if any, whether recoverable in cash or in kind or for value to be received, bank balances, deposits with any Government, quasi government, local or other authority or body or with any company or other person, shall without any further act, instrument or deed, cost or charge, be and shall stand transferred to and vested in the Transferee Company and/or deemed to have been transferred to and vested in the Transferee Company, by way of delivery of possession of the respective documents, as applicable, as a part of the transfer of the Undertaking as a going concern, so as to become from the Appointed Date, the assets and properties of the Transferee Company. d) The Transferee Company may, if it so deems appropriate, give notice in such form as it deems fit and proper, to each such debtor or obligor, that pursuant to the sanction of this Scheme by the NCLT, such debt, loan, advance, claim, bank balance, deposit or other asset be paid or made good or held on account of the Transferee Company as the person entitled thereto, to the end and intent that the right of the Transferor Company to recover or realize all such debts (including the debts payable by such deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter or thing being made, done or executed. The Transferee Company shall continue to pay rent or lease or license fee as provided for in such agreements, and the Transferee Company and the relevant landlords, owners and lessors shall continue to comply with the terms, conditions and covenants there-under. Without limiting the generality of the foregoing, the Transferee Company shall also be entitled to refund of security deposits paid under such agreements by the Transferor Company. g) All permissions, approvals, consents, subsidies, incentives, privileges, income tax benefits and exemptions, indirect tax benefits and exemptions, all other rights, benefits and liabilities related thereto, licenses, powers and facilities of every kind, nature and description whatsoever, provisions and benefits of all agreements, contracts and arrangements and all other interests in connection with or relating to the Transferor Company enjoyed or conferred upon or held or availed of by the Transferor Company and all rights and benefits that have accrued or which may accrue to the Transferor Company, whether on, before or after the Appointed Date, if any, shall stand transferred to and vested in and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and arrangements pertaining to the business of the Transferor Company or to the benefit of which the Transferor Company may be eligible and which are subsisting or having effect immediately before the Effective Date, including all rights and benefits (including benefits of any membership, deposit, advances, receivables or claims) arising or accruing there from, shall, with effect from Appointed Date and upon this Scheme becoming effective, by operation of law pursuant to the vesting orders of the NCLT, be deemed to be contracts, deeds, bonds, agreements, schemes, arrangements and other instruments, permits its, rights, entitlements, licenses, memberships of the Transferee Company. Such property and rights shall stand vested in the Transferee Company and shall be deemed to have become the property of the Transferee Company by operation of law, whether the same is implemented by endorsement or delivery and possession or recordal in any other manner. j) All the intellectual property rights of any nature whatsoever, including but not limited to intangible assets appertaining to the Transferor Company, whether or not provided in books of accounts of the Transferor Company, shall st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illed if they are issued or received by Transferee Company and if any Form relatable to the period prior to the said Effective Date is received in the name of the Transferor Company, it would be deemed to have been received by the Transferee Company in fulfillment of its obligations. n) Benefits of any and all corporate approvals as may have already been taken by the Transferor Company, whether being in the nature of compliances or otherwise, shall stand transferred to and vested in the Transferee Company as a part of the transfer of the Undertaking as a going concern, and the said corporate approvals and compliances shall be deemed to have originally been taken and complied with by the Transferee Company. o) The resolutions, if any, of the Transferor Company, which are valid and subsisting on the Effective Date, shall stand continue to be valid and subsisting and be considered as resolutions of the Transferee Company and if any such resolutions have any (sic) limits approved under the provisions of the Act as applicable, or any other applicable statutory provisions, then the said limits shall be added to the limits, if any, under like resolutions passed by the Transferee Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaken by the Transferor Company on or after the Appointed Date but prior to the Effective Date shall be deemed to have been raised, used, incurred or undertaken for and on behalf of the Transferee Company and shall stand transferred to and vested in and be deemed to have been transferred to and vested in the Transferee Company as a part of the transfer of the Undertaking as a going concern and the same shall be assumed by the Transferee Company and to the extent they are outstanding on the Effective Date, the Transferee Company shall meet, discharge and satisfy the same. e) Loans, advances and other obligations (including any arrangement which may give rise to a contingent liability in whatever form), if any, due or which may at any time in future become due between the Transferor Company and the Transferee Company shall stand discharged and come to an end and there shall be no liability in that behalf on any party and the appropriate effect shall be given in the books of accounts and records of the Transferee Company. 6. EMPLOYEES 6.1 Upon the coming into effect of this Scheme, all employees, who are on the payrolls of the Transferor Company, employees/personnel engaged on c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any will transfer/handover to the Transferee Company, copies of employment information, including but not limited to, personnel files (including hiring documents, existing employment contracts, and documents reflecting changes in an employee's position, compensation, or benefits), payroll records, medical documents (including documents relating to past or ongoing leaves of absence, on the job injuries or illness, or fitness for work examinations), disciplinary records, supervisory files relating to its and all forms, notifications, orders and contribution/identity cards issued by the concerned authorities relating to benefits transferred pursuant to this sub-clause. 6.4 The Transferee Company shall continue to abide by any agreement(s)/settlement(s) entered into by the Transferor Company with any of its employees prior to Appointed Date and from Appointed Date till the Effective Date. 7. LEGAL PROCEEDINGS 7.1 All proceedings of whatsoever nature (legal and others, including any suits, appeals, arbitrations, execution proceedings, revisions, writ petitions, if any) by or against the Transferor Company shall not abate, be discontinued or be in any way prejudicially affected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , minimum alternate tax, wealth tax, taxes withheld/paid in a foreign country, sales tax, valued added tax, goods and services tax, excise duty, customs duty, service tax, VAT, tax refunds) payable by or refundable to the Transferor Company, including all or any tax refunds or tax liabilities or tax claims arising from pending tax proceedings, under any law, on or before the Effective Date, shall be treated as or deemed to be treated as the tax liability or tax refunds/tax claims (whether or not recorded in the books of the Transferor Company) as the case may be, of the Transferee Company, and any unabsorbed tax losses and depreciation, etc., as would have been available to the Transferor Company on or before the Effective Date, shall be available to the Transferee Company upon the Scheme coming into effect; and 8.2 Subject to the terms of the Scheme, the transfer and vesting of the Undertaking as per the provisions of the Scheme shall not affect any transactions or proceedings already concluded by the Transferor Company on or with effect from the Appointed Date till the Effective Date. The Transferee Company accepts and adopts all acts, deeds and things made, done and executed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of the Transferor Company shall be recorded by the Transferee Company in its books of accounts at their respective carrying amounts as appearing in the books the Transferor Company. No adjustment shall be made to reflect fair values, or recognize any new assets of liabilities. 10.2 The identity of the reserves of the Transferor Companies shall be preserved and they shall appear in the financial statements of the Transferee Company in the same form and manner in which they appear in the financial statements of the Transferor Company, prior to this Scheme being made effective. 10.3 In case of any differences in accounting policy between Transferor Company and Transferee Company the accounting policies followed by Transferee will prevail and difference till the Appointed Date shall be adjusted in Capital Reserves of Transferee Company, to ensure that the financial statements of Transferee Company reflect the financial position on the basis of consistent accounting policy. 10.4 The carrying amount of investments in the equity shares of the Transferor Company to the extent held by the Transferee Company (if any), shall stand cancelled. 10.5 Inter-company transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Transferee Company. 12.2 Clause V of the Memorandum of Association of the Transferee Company shall, without any further act, instrument or deed, stand altered, modified and amended pursuant to Sections 13, 61 and 62 of the Act and other applicable provisions of the Act, as the case may be and be replaced accordingly. 12.3 It is further clarified that under the accepted principle of single window clearance, the approval of the members of the Transferee Company to the Scheme shall be deemed to be their consent/approval for the proposed amendment of the Capital clause of the Memorandum of Association of the Transferee Company, under the provisions of Section 13, 61 and 62 of the Act and other applicable provisions of the Act. The Transferee Company shall not be required to pass separate resolutions or undertake any further procedure as required under the Act, nor any additional fees or stamp duty, shall be payable by the Transferee Company. 12.4 Consequent to the clubbing of the Authorised Share Capital of the Transferor Company with the Transferee Company, the Authorized Share Capital of the Transferee Company shall be increased to Rs. 13,00,00,000/- 12.5 The following claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies. 15. APPLICATION 15.1 The Companies shall undertake requisite procedure for filing necessary application and petition before the Ahmedabad Bench of NCLT under Section 230 to 232 of the Act, seeking orders for dispensing with or convening, holding and/or conducting of the meeting(s) of the classes of their respective shareholders and creditors and for sanctioning this Scheme with such modifications, as may be approved by the NCLT. 15.2 The Transferee Company shall be entitled, pending the sanction of the Scheme, to apply to any Governmental Authority, if required, under any law for such consents and approvals which the Transferee Company may require to carry on the business of the Transferor Company. 16. MODIFICATIONS TO THE SCHEME The Companies (by their respective Board of Directors) may, in their full and absolute discretion: (a) assent to any alteration(s) or modification(s) to this Scheme which NCLT and/or any other Governmental Authority may deem fit to approve or impose, and/or effect any other modification or amendment jointly and mutually agreed in writing, and to do all acts, deeds and things as may be necessary, desirable or expedient for the purposes of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary to give effect to this Scheme, even if the prescribed time limits for filing or revising such returns have lapsed without incurring any liability on account of interest, penalty or any other sum. The Transferee Company shall have the right to claim refunds, tax credits, set-offs and/or adjustments relating to its income or transactions entered into by it with effect from Appointed Date. The taxes or duties paid by, for, or on behalf of, the Transferor Company relating to the period on or after Appointed Date shall be deemed to be the taxes or duties paid by the Transferee Company and the Transferee Company shall be entitled to claim credit or refund for such taxes or duties. 17.4 Any advance tax, self-assessment tax, minimum alternate tax and/or TDS credit available or vested with the Transferor Company, including any taxes paid and taxes deducted at source and deposited by the Transferor Company on inter se transactions during the period between Appointed Date and the Effective Date shall be treated as tax paid by the Transferee Company and shall be available to the Transferee Company for set-off against its liability under the Income Tax Act and any excess tax so paid s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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