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2015 (5) TMI 157 - HC - Companies LawApplication for Scheme of Amalgamation under Sections 391(1) to 394 read with Section 100 of the Companies Act, 1956 - Regional director observation regarding appointment date duly addressed - Held that - Although the Regional Director in his report has not raised any objection to the proposed Scheme, but he has pointed out that while the companies have filed their balance sheets upto 31st March, 2014, the proposed appointed date of the Scheme is 1st April, 2015, i.e. after nearly one year, therefore, there is uncertainty with regard to the status of the assets and liabilities that would ultimately stand transferred under the proposed Scheme. In reply to aforesaid, the petitioner companies have filed an affidavit dated 26th March, 2015 of Mr. Anuj Sharma, Director of the transferee company stating that the transferor companies have been carrying on their business in a prudent manner and after filing of their balance sheets, as on 31st March, 2014, there have been no material change in the financial position of the companies. He has further submitted that the petitioner companies shall file their balance sheet as on 31st March, 2015 and shall also file their Schedule of Properties as on 31st March, 2015, which will become a part of the Formal Order required to be filed with the Registrar of Companies. He also undertakes to inform the Court if there is any material change in the financial or other affairs in the companies. In view of the above, the observation raised by the Regional Director stands satisfied. Considering the approval accorded by the equity 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 of the Companies Act, 1956. The petitioner companies will comply with the statutory requirements in accordance with law. - Application for scheme of amalgamation approved.
Issues Involved:
1. Sanction of the Scheme of Amalgamation under Sections 391(1) to 394 read with Section 100 of the Companies Act, 1956. 2. Compliance with statutory requirements and procedural aspects. 3. Share exchange ratio and financial implications. 4. Objections and approvals from shareholders, creditors, and regulatory authorities. 5. Final order and costs. Detailed Analysis: 1. Sanction of the Scheme of Amalgamation: The petitioner companies sought the court's sanction for the Scheme of Amalgamation involving Vendee Builders Private Limited and 13 other transferor companies with Sungrace Products (India) Private Limited (transferee company). The registered offices of all companies involved are situated in New Delhi, within the jurisdiction of this court. The Scheme aims to reduce overheads, administrative work, and optimize productivity, resulting in better management and financial control. 2. Compliance with Statutory Requirements and Procedural Aspects: The Board of Directors of the transferor and transferee companies unanimously approved the Scheme in their meetings held on 17th November 2014. The petitioner companies had earlier filed CA (M) No. 170/2014, seeking to dispense with the requirement of convening meetings of their equity shareholders and unsecured creditors. This was granted by the court on 17th December 2014. Notice was issued to the Regional Director, Northern Region, and the Official Liquidator, with citations published in 'Business Standard' (English and Hindi) editions. 3. Share Exchange Ratio and Financial Implications: The Scheme detailed the share exchange ratio for each transferor company. For instance, "84 equity shares of Rs. 100/- each of the transferee company credited as fully paid up for every 1000 equity shares of Rs. 10/- each held in the transferor company no. 1." The ratios varied for each transferor company, reflecting their respective financial standings. The Scheme also stated that the amalgamation would be accounted for under the 'pooling of interest' method in accordance with Accounting Standard-14. 4. Objections and Approvals from Shareholders, Creditors, and Regulatory Authorities: The Official Liquidator reported no complaints against the proposed Scheme and stated that the affairs of the transferor companies were not conducted prejudicially. The Regional Director, Northern Region, highlighted the need for updated financial status due to the appointed date being nearly a year after the last balance sheets. The petitioner companies assured that they would file updated balance sheets and schedules of properties as of 31st March 2015 and inform the court of any material changes. No objections were received from any other parties. 5. Final Order and Costs: The court granted sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956, with the transferor companies to be dissolved without winding up from the appointed date of 1st April 2015. The petitioners were directed to comply with statutory requirements and file a certified copy of the order with the Registrar of Companies within 30 days. The order clarified that it did not grant exemption from stamp duty. The petitioners were also ordered to pay costs of Rs. 5.0 lakhs to the Common Pool Fund of the Official Liquidator within four weeks. Conclusion: The petition was allowed, sanctioning the Scheme of Amalgamation, with compliance directives and cost orders as detailed above.
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