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TMI Blog2015 (5) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions to comply. He, therefore, prays that petitioner/demerged company may be directed to submit an undertaking to comply with those conditions. In para 6 of his report, he submitted that a perusal of the shareholding pattern of the transferor company shows that its 69.50% shares are held by the Non Resident Indian. He, therefore, prays that the transferor company may be directed to give an undertaking for all compliances from Reserve Bank of India as required under FEMA for above transactions involving foreign banks/entities. In reply to the first observation, the petitioner companies in their reply have submitted that the compliance of Section 2(19AA) of the Income Tax Act, 1961 is necessary to enable the petitioners to avail the benefit of Income Tax Act. So far as the second observation of the Regional Director is concerned, the petitioners have submitted that as per RBI’s circular for allotting shares to the NRI shareholders, in case of amalgamation, RBI’s permission is not required. However, the petitioners have undertaken to comply with the requirements of Section 2(19AA) of the Income Tax Act, 1961 and also to comply with the provisions of FEMA in allotting shares to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued, subscribed and paid-up share capital of the company is ₹ 2,04,60,000/- divided into 20,46,000 equity shares of ₹ 10/- each fully paid-up. 7. The present authorized share capital of the transferee company is ₹ 60,00,000/- divided into 6,00,000 equity shares of ₹ 10/- each. The issued, subscribed and paid-up share capital of the company is ₹ 59,80,680/- divided into 5,98,068 equity shares of ₹ 10/- each fully paid-up. 8. The present authorized share capital of the resulting company is ₹ 1,00,000/- divided into 10,000 equity shares of ₹ 10/- each. The issued, subscribed and paid-up share capital of the company is ₹ 1,00,000/- divided into 10,000 equity shares of ₹ 10/- each fully paid-up. 9. Copies of the Memorandum and Articles of Association of the transferor, transferee and resulting companies have been filed on record with the joint application, being CA(M) 88/2014, earlier filed by the petitioners. The audited balance sheets, as on 31st March, 2014, of the transferor and transferee companies, along with the report of the auditors, had also been filed. It is submitted by the petitioners that since the resul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme provides that, upon coming into effect of this Scheme, the transferee company shall issue and allot equity shares to the shareholders of the transferor company in the following ratio: 01 equity share of ₹ 10/- each of the transferee company, credited as fully paid up, for every 17.41 equity shares of ₹ 10/- each held by the shareholders in the transferor company. It is further provided that upon demerger of the demerged business of the transferee company into the resulting company, the resulting company shall issue and allot equity shares to the shareholders of the transferee/demerged company equivalent to the amount of ₹ 1,14,415.69/- which shall be rounded off to ₹ 1,14,420/- being difference in the value of assets and liabilities of demerged business which are proposed to be transferred at book value. The shares shall be allotted on pro-rata basis to the shareholders of the transferee company. 13. It has been submitted by the petitioners that no proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against the petitioner companies. 14. The Board of Directors of the transferor company, the transferee company and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Corporate Affairs has filed his report dated 2nd September, 2014. Relying on Clause 6.2.1 of Part-6 of the Scheme, he has stated that, upon sanction of the Scheme of Arrangement, all the employees of the demerged company engaged in demerged undertaking shall become the employees of the resulting company and all the employees of the transferor company shall become the employees of the transferee company without any break or interruption in their services. 19. The Regional Director in Para 5 of his report has, however, submitted that para 3.2 of Part-3 of the Scheme provides that demerger shall be in accordance with Section 2(19AA) of the Income Tax Act, 1961, which stipulates several conditions to comply. He, therefore, prays that petitioner/demerged company may be directed to submit an undertaking to comply with those conditions. In para 6 of his report, he submitted that a perusal of the shareholding pattern of the transferor company shows that its 69.50% shares are held by the Non Resident Indian. He, therefore, prays that the transferor company may be directed to give an undertaking for all compliances from Reserve Bank of India as required under FEMA for above transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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