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TMI Blog2016 (6) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... blished in the newspapers, namely, “Financial Express” (English), “Jansatta” (Hindi) both Delhi/NCR Edition and in the Official Gazette of Government of Haryana. - CP No.31 of 2016 (O&M) - - - Dated:- 9-5-2016 - MR.JUSTICE RAKESH KUMAR JAIN, J. For The Petitoner : Ms.Munisha Gandhi, Sr. Advocate, with Mr.Deepak Suri, Advocate, For The Respondent : Mr.Deepak Aggarwal, Advocate, with Mr.D.K. Singh, Official Liquidator. RAKESH KUMAR JAIN, J. This petition is filed under Sections 391 394 read with Section 100 to 104 of the Companies Act, 1956 [for short the Act ], duly supported by affidavits of the petitioner-Companies, seeking sanction of the Scheme of Arrangement [for short the Scheme] vide which KPO Business of Quatrro Global Services Private Limited (Petitioner Company No.1) shall demerge into Scope e-Knowledge Solutions Private Limited (Petitioner Company No.II). The main objects of the Quatrro Global Services Private Limited (Petitioner Company No.1) and Scope e-Knowledge Solutions Private Limited (Petitioner Company No.II) are detailed in their respective Memorandum and Articles of Association, which are annexed with the petition as Annexures P-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies that pursuant to scheme becoming effective, foreign non-resident shareholders to hold 14, 004,124 shares representing 77.009% stake of the paid up share capital of Scope Solution India. The aforesaid investment is under automatic route as per Foreign Direct Investment Policy of Reserve Bank of India. 8.2 That the Deponent states that the Petitioner Companies vide para No.21 of their reply have stated that the Petitioner Companies and their respective directors represent and confirm that no prosecution proceedings against the company and its directors have either been instituted or pending before any Court on account of any violation of laws such as the Companies Act, 1956, FEMA, IPC, SEBI Act, RBI Act, etc. 8.3 That the Deponent states that the Petitioner Companies vide para no.22 of the reply have furnished the details of Income Tax dues that have not been deposited on account of dispute with the Tax authorities. 8.4 That the Deponent states that the Petitioner Companies have vide para No.34 of the reply states that AS-14 is not applicable on demerger of QGS KPO Business from Quatrro Global Services Private Limited into Scope e-Knowledge Solutions Private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limited to advance income tax and tax deducted at source), excise (including Modvat/Cenvat). Customs, sales tax etc. relating to the QGS KPO Business to which QGS India is entitled to shall be available to and be vested in QGS India. In the scheme the extent of such statutory liabilities relating to the QGS KPO Business is not specified. Comments regarding the same may be called for from the respective Regulatory Authorities, viz, Income Tax, Service Tax, customs Authorities, etc. In response to the observations made by the Regional Director, an affidavit dated 23.4.2016 of Amitabh Johri, authorised signatory of both the Petitioner-Companies, as mentioned in their respective Board Resolutions, has been filed in which following explanations/averments have been made: 1. That it is submitted that Para 1 to Para 8.3, Para 9, Para 11.1 to Para 12 are only observations as given in the Affidavit submitted by the Regional Director and therefore, does not require any comment. 2. That as far as the observations raised in Para 8.4 of the Affidavit of the Regional Director is concerned, it is submitted that: The Petitioner Company has obtained certificate from the Statutory Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by QGS India. The shareholders of QGS India hold business of Scope Solution India via Scope e-Knowledge Center Private Limited (a wholly owned subsidiary of QGS India). The restructuring is within the subsidiary (Scope Solution India) and the holding company (QGS India). d) Pursuant to demerger of undertaking as mentioned in Clause 9 of the Scheme from QGS India to Scope Solutions India, the shares shall be issued to the shareholders of the QGS India such that the shareholders of QGS India become the shareholders of Scope Solutions India in the same proportion in which they were holding shares in QGS India. e) The object of the Scheme is to allow the shareholders of QGS India to own the shares of Scope Solutions India directly rather than indirectly through QGS India. Thus, the purchase consideration is being issued directly to the shareholders of QGS India pursuant to the Scheme which has been approved by the Board of Directors vide the Board Resolution dated December 1, 2015. Further, the creditors and members of both the Petitioner Companies involved in the Scheme have given their consent to the scheme. The clause 9, 10 and 11 of the RoC report also acknowledges the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to demerger is of no relevance since there will be no loss of economic interest in the hands of shareholders of QGS India. Accordingly, for the purpose of recommending a swap ratio, we are not attempting to arrive at the absolute values of shares of each company. Our exercise is to work out relative values of shares. Thus, in determining the share swap ratio, we have chosen the methodology, which would fairly state the relative values of the shares rather than the absolute values . This does not in any way change the economic interest at the shareholders level. In the light of the above and on a consideration of all the relevant factors and circumstances as discussed and outlined hereinabove earlier in this report, in our opinion, we believe that the following share exchange ratio as decided by the Board of Directors for the proposed demerger is fair and reasonable. j) Further, from the various judgments, the position in law is well settled that once the exchange ratio of the shares to be allotted to the shareholders has been worked out by a recognised firm of Chartered Accountants who are experts in the field of valuation and the same has been accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intangible, including all current assets, deposits including accrued interest, loans and advances together with all present and future liabilities (including contingent liabilities) appertaining or relatable thereto; b) all the liabilities, including contingent liabilities, present or future, which arise out of the activities or operations relating to the QGS KPO Business; c) the specific loans and borrowings raised, incurred and utilized solely for the activities or operations of or pertaining to the QGS KPO Business; d) liabilities, other than those referred to in sub- clauses (b) and (c) above, being the amounts of general or multipurpose borrowings of QGS India, allocated to the QGS KPO Business in the same proportion in which the value of the assets (ignoring the revalued amount) transferred in the demerger under this Scheme bear to the total value of the assets of QGS India immediately before giving effect to this Scheme; (the liabilities in (b), (c) and (d) above are collectively referred to as the Assumed Liabilities ) e) any and all intellectual property rights, know-how and confidential information pertaining to or used in connection with the QGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme. The explanation to clause 1.5 of the Scheme enables the Board of Directors of the demerged company (QGS India) and resulting company (Scope Solutions India) to decide on whether a particular asset or liability needs to be transferred or retained. For eg: There could be intra group transactions between the demerged undertaking and resulting company which are required to be cancelled pursuant to demerger. The indicative list of assets and liabilities related to QGS KPO Business Undertaking being transferred to Scope Solutions India are already provided in Annexure A to the Scheme. d) Further, we humbly request the Honorable High Court that as the Scheme is between the entities of the same group and it does not result into any value loss to any of the petitioner companies and/or its shareholders, the explanation to clause 1.5 to the Scheme should be retained. 3.3 The observation of Regional Director is as under: Paragraph 4.12 of the Scheme states that statutory benefits including in respect of income-tax (including and not limited to advance income tax and tax deducted at source), excise (including Modvat/ Cenvat). Customs, VAT, sales tax etc. relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns India) undertakes to transfer all such statutory benefits / payments / liabilities related to the QGS KPO Business undertaking subject to the provisions of the respective statutes and also undertakes to discharge all the statutory liabilities as and when they become due in the normal course of business viz, Income Tax, Service Tax, Custom Authorities, etc. Further, the petitioner companies wish to submit that there are no overdue payments to any of the authorities as of date. The above-stated explanations submitted by Amitabh Johri, authorised signatory of both the petitioner-companies, meet the queries/observations raised by the Regional Director. It is further submitted by counsel for the Petitioner-Companies that no investigation proceedings are pending against the Petitioner-Companies under Sections 235 to 251 of the Act. For the reasons mentioned hereinabove, on the consideration of all the relevant facts, the procedural requirements contemplated under Sections 391 394 of the Act, the relevant Rules and on due consideration of the report of the Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi, the Scheme of Arrangement is hereby san ..... X X X X Extracts X X X X X X X X Extracts X X X X
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