2020 (9) TMI 708 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT - From the material on record, the Scheme appears to be fair and reasonable and is not contrary to public policy - From the material on record, the Scheme appears to be fair and reasonable and is not contrary to public policy Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 4232 of 2019 is made absolute in terms of prayer clause of the Company Petition. The Scheme is sanctioned hereby, and the appointed date of the Scheme is fixed as 1st April 2019.

Summary

Issues Involved:
1. Approval and compliance with the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.
2. Benefits of the restructuring for stakeholders.
3. Compliance with statutory requirements and accounting standards.
4. Observations and objections raised by the Regional Director.
5. Approval from equity shareholders and other regulatory authorities.
6. Transfer of assets and liabilities.
7. Issuance of shares by the Transferee Company.
8. Lodging of the Order and Scheme with relevant authorities.

Issue-wise Detailed Analysis:

1. Approval and Compliance with the Scheme of Amalgamation:
The Tribunal heard the Learned Counsel for the Petitioner Companies and noted that no objector came forward to oppose the Scheme. The sanction was sought under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, for the Amalgamation of Vanderlande Industries Software Private Limited (Transferor Company) with Vanderlande Industries Private Limited (Transferee Company) and their respective shareholders.

2. Benefits of the Restructuring for Stakeholders:
The restructuring was believed to benefit the companies and stakeholders by rationalizing the legal entity structure, reducing legal and regulatory compliances, eliminating duplicative communication efforts, optimizing overhead costs, and improving shareholder value through a stronger consolidated revenue.

3. Compliance with Statutory Requirements and Accounting Standards:
The Petitioner Companies complied with all requirements as per the Tribunal's directions and undertook to comply with all statutory requirements under the Companies Act, 2013, and applicable Accounting Standards, including AS-14 (Ind AS 103), AS-5 (Ind AS-8), and others.

4. Observations and Objections Raised by the Regional Director:
The Regional Director's report dated 9th January 2020 highlighted several observations:
- Compliance with applicable Accounting Standards.
- Clarification on the "Effective Date" and "Appointed Date" as per Section 232(6) of the Companies Act, 2013.
- Combination of Authorized Share Capital to comply with Section 232(3)(i) of the Companies Act, 2013.
- Filing an affidavit confirming no discrepancies in the Scheme.
- Serving notices to concerned authorities as per Section 230(5) of the Companies Act, 2013.
- Addressing objections raised by the ROC Pune.

The Petitioner Companies provided satisfactory explanations and undertakings for each observation, which were accepted by the Tribunal.

5. Approval from Equity Shareholders and Other Regulatory Authorities:
Meetings of Equity Shareholders for both Petitioner Companies were held on 4th October 2019, where the Scheme was unanimously approved without modification. The Petitioner Companies also complied with all requirements as per the Tribunal's directions and filed necessary affidavits of compliance.

6. Transfer of Assets and Liabilities:
All assets and liabilities, including taxes and charges of the Transferor Company, shall be transferred to and become the liabilities and duties of the Transferee Company pursuant to Section 232 of the Companies Act, 2013.

7. Issuance of Shares by the Transferee Company:
The Transferee Company shall issue and allot 131,663.77 fully paid-up Equity Shares of ?10 each to the Equity Shareholders of the Transferor Company for every 100 fully paid-up Equity Shares of ?10 each held by them.

8. Lodging of the Order and Scheme with Relevant Authorities:
The Petitioner Companies were directed to lodge a copy of the Order along with the Scheme with the concerned Registrar of Companies electronically and physically, as per the relevant provisions of the Companies Act, 2013. They were also instructed to lodge a copy of the Order and Scheme with the Superintendent of Stamps for adjudication of stamp duty within 60 days.

Conclusion:
The Scheme was sanctioned, and the appointed date was fixed as 1st April 2019. The Tribunal found the Scheme fair, reasonable, and not contrary to public policy, thus making the Company Scheme Petition absolute in terms of the prayer clause. All concerned regulatory authorities were directed to act on the authenticated copy of the Order and Scheme.