2020 (9) TMI 703 - Tri - Companies Law

Sanction of the Composite Scheme of Amalgamation and Arrangement - section 230 to 232 of Companies Act 2013 - HELD THAT - From the material on record and after perusing the clarifications and submissions of the Petitioner Companies to the Report and the Supplementary Report filed by the Regional Director, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy - Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition CP (CAA) 4051/MB/2019 filed by the Petitioner Companies is made absolute in terms of prayer clauses (a), (c) and (d) of the Company Scheme Petition. The Petitioner Companies to lodge certified copy of this order along with a copy of the sanctioned Scheme attached thereto, with the concerned Collector of Stamps, for the purpose of adjudication of stamp duty payable, if any, within 60 days from the date of receipt of the certified copy of this order - The respective Petitioner Companies are directed to file certified copy of this order along with a copy of the sanctioned Scheme attached thereto, with the concerned Registrar of Companies, electronically, along with e-form INC 28 within 30 days of receipt of certified copy of this order. All concerned authorities to act on certified copy of this order along with the sanctioned Scheme, duly certified by Deputy/ Assistant Registrar of the National Company Law Tribunal, Mumbai Bench.

Issues Involved:
1. Compliance with statutory requirements and accounting standards.
2. Approval and rationale of the Composite Scheme of Amalgamation and Arrangement.
3. Observations and objections by the Regional Director and other authorities.
4. Compliance with Income Tax Department requirements.
5. Final approval and implementation of the Scheme.

Issue-wise Detailed Analysis:

1. Compliance with statutory requirements and accounting standards:
The Petitioner Companies have complied with all statutory requirements as directed by the Tribunal, including filing necessary affidavits of compliance. They have undertaken to comply with all statutory requirements under the Companies Act, 2013, and the rules made thereunder. The companies also confirmed adherence to accounting standards, specifically AS-14 (IND AS-103) and AS-5 (IND AS-8).

2. Approval and rationale of the Composite Scheme of Amalgamation and Arrangement:
The Scheme involves the demerger of certain undertakings and the amalgamation of companies to create a standalone listed entity focused on healthcare. The Scheme provides for:
- Demerger of Demerged Undertaking 1 from Petitioner Company 1 to Petitioner Company 4.
- Demerger of Demerged Undertaking 2 from Petitioner Company 3 to Petitioner Company 2.
- Amalgamation of Petitioner Company 1 (post-demerger) with Petitioner Company 2.
The rationale includes consolidation of healthcare businesses, unlocking value for shareholders, and achieving cost efficiencies and operational synergies.

3. Observations and objections by the Regional Director and other authorities:
The Regional Director's report highlighted several observations, including compliance with accounting standards, appointed dates, amendments to the Articles of Association, and the necessity of obtaining NOCs from stock exchanges. The Petitioner Companies responded to these observations satisfactorily, confirming compliance with all relevant provisions and addressing specific concerns, such as ensuring the Scheme documents were consistent and serving notices to regulatory authorities.

4. Compliance with Income Tax Department requirements:
The Income Tax Department raised specific queries to Petitioner Company 1 regarding the Scheme. The Petitioner Company undertook to comply with the directions and requirements of the Income Tax Authority. The Tribunal noted that the stipulated response time had expired and accepted the company's undertaking to comply with all obligations under the Income-tax Act, 1961.

5. Final approval and implementation of the Scheme:
The Tribunal found the Scheme to be fair, reasonable, and not violative of any law or public policy. Consequently, the Company Scheme Petition was made absolute in terms of the prayer clauses. The Petitioner Companies were directed to lodge certified copies of the order and the sanctioned Scheme with the concerned authorities for stamp duty adjudication and to file the documents electronically with the Registrar of Companies. All concerned authorities were instructed to act on the certified copies of the order and Scheme.

Conclusion:
The Tribunal approved the Composite Scheme of Amalgamation and Arrangement, subject to compliance with statutory requirements and addressing observations from the Regional Director and Income Tax Department. The Scheme aims to consolidate healthcare businesses, enhance shareholder value, and achieve operational efficiencies.

← Previous Next →