9911796707
TMI Blog2017 (5) TMI 1518X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 and other connected matters. A perusal of the petition discloses that initially application seeking the directions for dispensing with the meetings of equity shareholders, secured and unsecured creditors of both the transferor companies and the transferee company was filed before the Hon'ble High Court of Delhi in CA No. 51/2016. The Hon'ble High Court of Delhi vide its order dated 30.05.2016 dispensed with the requirement of convening of the meetings of the equity shareholders, equity shareholders with differential rights and Unsecured Creditors of the transferor company No. 1; equity shareholders of the transferor company No. 2; equity shareholders and Unsecured creditors of the Transferee company. The transferor company No. 2 did not have any Secured Creditor or Unsecured Creditor. Hon'ble High Court further directed for convening of separate meetings of Secured Creditors of the Transferor Company No. 1 and the Transferee Company under its supervision for the purpose of considering and if thought fit, approving, with or without modification(s), the proposed Scheme of Arrangement. 2. In compliance of the order of Hon'ble High Court separate meetings of Secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Edition and in the Hindi Edition of Business Standard again on 29.07.2016 in relation to the date of hearing of the petition on 12.12.2016. Further, the affidavit also discloses that notices have been issued to the Regional Director, Northern Region and Registrar of Companies, Delhi Haryana, in compliance with the order dated 15.07.2016 and in proof of the same acknowledgement made by the respective offices have also been enclosed. 7. Additionally, the petitioners have also filed an affidavit before the Hon'ble High Court of Delhi dated 07.12.2016, that the petitioners herein nor their Legal Counsels had received any objection/representation against the proposed scheme of Arrangement till the date of such affidavit. The representation/affidavit of the Regional Director, NR, MCA dated 21.02.2017 has been placed before us. 8. We have heard the counsels for the petitioners and also considered the representation made by the Regional Director, Northern Region vide representation dated 21.02.2017. 9. Perusal of the above representation of the Regional Director as well as stressed at the time of oral hearing by the representative of the Regional Director, following points/o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed reply has been filed by the petitioners dated 21.03.2017 along with annexures. Petitioners jointly submitted that with regard to the above mentioned returned income as indicated in the respective Income-tax Returns filed by the Petitioner Transferor and transferee Companies for Assessment year 2015-16, it is hereby confirmed that the entire Income tax which was required to be paid with respect to the aforesaid returned income, has already been paid. The Petitioners also confirm that no Income tax is outstanding for payment for the Assessment year 2015-16, as on the date of this affidavit in the Petitioner Transferor and Transferee Companies. Separate Certificates from the Chartered Accountants confirming that the Petitioner Transferor and transferee Companies have made full payment of the Income-Tax for the Assessment Year 2015-16, are placed on record along with the reply as Annexure-1. 11. The petitioners also confirm that there are no disputed tax liability, towards income-tax, sales tax, or any government tax pending in relation to the Petitioner transferor Companies and transferee Company, except the cases which are under appeal/litigation, which it is represented will b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transferor Company No. 1 and the Transferee Company will be adversely affected by the proposed reduction of Share Capital. The transferor Company No. 1 and the transferee Company are merely proposing to re-arrange their share capital by converting part of post de-merger paid up equity share capital into securities premium account. 14. In relation to the above, three significant aspects come to the fore; namely:- i) The Scheme contemplates de-merger of the demerged undertakings and the continuation of the corporate entities; ii) The Scheme in view of the demerger of the demerged undertakings contemplates reduction of capital of the concerned companies; iii) The Scheme also envisages creation of share premium account arising out of demerger. The accounting treatment contemplated under the Scheme is brought out in clause 4 of the Scheme which are reproduced hereunder:- ACOUNTING TREATMENT 4.1 Upon the Scheme becoming effective, De-merger of respective Investments Business (Demerged Business 1 2) of the Transferor Companies No. 1 2 into the Transferee Company, will be accounted in the following manner: 4.1.1 In the books of the Transferor Companies No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credited to the Capital Reserve, as the case may be, by the Transferee Company. 4.2.2 - In the books of the Transferor Company No. 1 c. The Transferor Company No. 1 shall record the assets and liabilities (difference between the assets and liabilities hereinafter referred to as Net Assets ) pertaining to the Demerged Business 3 vested in it pursuant to this Scheme, at the respective book values as appearing in the books of the Transferee Company, as on the Appointed Date. d. The Transferor Company No. 1 shall credit to the Share Capital Account, in the books of accounts, the aggregate face value of the new Equity Shares issued by it to be Shareholders of the Transferee Company, pursuant to clause 3.2.1 of this Scheme. e. Any difference between the Net Assets and the aggregate face value of new Equity Shares issued, shall be credited to the Capital Reserves or debited to Goodwill Account, as the case may be, in the books of the Transferor Company No. 1 15. Despite the elaborate Accounting Treatment contemplated as above and also taking into consideration the complexity of the Scheme, we do not, from the paper books filed before us are in a position to ascertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondition precedent for sanctioning the scheme. Further, in view of such importance being accorded to the certificate, it is needless to say that the respective Company's Auditor is required to issue the certificate with utmost care highlighting that the accounting treatment envisaged in the scheme is in compliance with the Accounting Standards prescribed or Generally Accepted Accounting Principles but also bringing to the attention in the certificate, where the accounting treatment deviates from the prescribed accounting standards and reasons therefore and where there is none or not applicable to, also highlight the same. Thus, the certificate of Company's Auditor is required not to be pedantic or mechanical and as already stated, to be given with utmost care and diligence, understanding the importance of it. 17. In light of the above and keeping in view the directions already given by the Hon'ble Principal Bench in C.P. No. 1139 of 2016 and the Petitioners also being similarly placed, as the Company Petitions herein have also been transferred from Hon'ble High Court of Delhi due to notification of the provisions of Section 230 to 232 of the Companies Act, 2013 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
