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TMI Blog2021 (7) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, Arushi Poddar, Advocate i/b Cyril Amarchand Mangaldas and Rupa Sutar, Deputy Regional Director ORDER Chandra Bhan Singh, Member (T) 1. The Bench is convened by videoconference today. 2. Heard Learned Advocate appearing for the Petitioner Company and Officer of the Regional Director, Western Region, Mumbai. No shareholder or creditor of the Petitioner Company has appeared before this Tribunal to oppose the present Company Scheme Petition. 3. Learned Advocate for the Petitioner Company states that the Petitioner Company has filed the present Company Scheme Petition, under Sections 230-232 of the Companies Act, 2013 (hereinafter referred to as the Act ) and other relevant provisions of the Act, seeking sanction from this Tribunal to the Scheme of Amalgamation by way of Merger by Absorption between Taj Madras Flight Kitchen Private Limited (hereinafter referred to as the Transferor Company/Amalgamating Company as the context may admit) and Taj SATS Air Catering Limited(hereinafter referred to as the Petitioner Company/Transferee Company/Amalgamated Company as the context may admit) under Sections 230-232 of the Companies Act, 2013 (hereinafter referred to as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equity shares of the Transferor Company are held by the Petitioner Company and its nominees. 8. The Scheme provides inter alia for amalgamation of the Transferor Company with the Petitioner Company, followed by the dissolution without winding up of the Transferor Company and the consequent cancellation of the equity shares of the Transferor Company, held by the Petitioner Company in the Transferor Company, and various other matters consequential to or otherwise integrally connected with the above, pursuant to Sections 230 to 232 and other relevant provisions of the Act in the manner, provided for in the Scheme. 9. The rationale and objectives of the Scheme are as follows: a. The Scheme is in consonance with the approach of the holding group of the Petitioner Company to reduce the number of operating entities under their control which in turn will lead to lower compliance costs for accounting, auditing, board meetings, secretarial procedures, etc. b. After the Scheme becomes effective, the Petitioner Company will gain entry into a market in which it is not present currently and hence will be in a position to consolidate and increase both its revenue share and profits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. No. Observations in RD Report dated 26.05.2021 (Para IV) Petitioners' Reply dated 26.05.2021 a) In addition to compliance of AS-14(IND AS-103) the Transferee Company shall pass such accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standards such as AS-5(IND AS- 8) etc.; As regards the observation in paragraph IV (a) of the said Report, the Petitioner Company states that in compliance of AS-14 (IND AS-103), the Petitioner Company undertakes to this Hon'ble Tribunal to pass such accounting entries which are necessary in connection with the Scheme, to comply with other applicable Accounting Standards such as AS- 5 (IND AS-8) etc., to the extent applicable. b) As per Part-I-Definitions Clause 1.1(1.1.2) Clause 1.1(1.1.5) of the Scheme, Appointed Date means April 1, 2020; Effective Date means the last of the dates on which all the conditions and matters referred to in Clause 22 of the Scheme occur or have been fulfilled or waived in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the Tribunal. As regards the observation in paragraph IV (c) of the said Report, the Petitioner Company states say that, in accordance with the directions of this Hon'ble Tribunal vide order dated 21st January, 2021 (a) the meeting of the equity shareholders of the Petitioner Company was dispensed with based on the consents by way of affidavits received from all equity shareholders of the Petitioner Company and (b) the convening and holding meetings of the sole secured creditor and unsecured creditors of the Petitioner Company to seek their approval to the Scheme were not required to be convened; and (c.) the Petitioner Company was directed to issue notice of filing of the Company Scheme Application No. CA (CAA) No. 1147/MB/2020 and passing of the said order upon its sole secured creditor and its entire unsecured creditor. Further in accordance with the directions of this Hon'ble Tribunal vide order dated 21st January, 2021, the Petitioner Company has filed Affidavit dated 17th March, 2021 proving issuance of notices to the secured creditor and unsecured creditors of the Petitioner Company, in this Hon'ble Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Companies Act, 2013, where the transferor company is dissolved, the fee, if any, paid by the transferor company on its authorized capital shall be set-off against any fees payable by the transferee company on its authorized capital subsequent to the amalgamation and therefore, petitioners to affirm that they comply the provisions of the section. As regards the observation in paragraph IV (f) of the said Report, the Petitioner Company states that the Petitioner Company undertakes to this Hon'ble Tribunal that it would comply with the provisions set out in Section 232 (3) (i) of the Act and that the fee, if any, paid by the Transferor Company on its authorized share capital shall be set off against any fees payable by the Petitioner Company on its authorized share capital subsequent to the amalgamation, if applicable. g) The Petitioner Company may be directed to submit undertaking that the petitioner company shall ensure compliance of the all provisions of the Income Tax Act, 1961 including provisions of section 2(1B) of the Income Tax Act. As regards the observation in paragraph IV(g) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting Treatment). Upon the Scheme becoming effective, the Transferee Company shall account for the amalgamation in its books of accounts as per the pooling of interest method in accordance with the principles as laid down in the Indian Accounting Standard (Ind AS) 103 - Business Combinations, other applicable accounting standards and the Applicable provisions of the Companies Act, 2013, In this regard, it is submitted that the surplus so credited to Capital Reserve arising out of Amalgamation shall not be available for distribution of dividend and other similar purposes. As regards the observation in paragraph IV(i) of the said Report, the Petitioner Company states that the Petitioner Company undertakes to this Hon'ble Tribunal, that treatment of Capital Reserve arising out of Amalgamation shall be done in accordance with applicable accounting standards and the provisions of the Act and rules made there under, as applicable. j) Since the Transferee Company have foreign/nonresident shareholders, therefore, it is subject to the compliance of section 55 of the Companies Act, 2013 the FEMA Regulations/RBI Guidel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. The observations made by the Regional Director have been explained by the Petitioner Company in paragraph 10 above. The Representative of the RD has submitted that the explanation and clarifications given by the Petitioner Company are found satisfactory and they have no objection to the Scheme. The Affidavit dated 26th May, 2021 filed by the Petitioner Company, the clarifications and undertakings given by the Petitioner Company are verified and accepted by the Tribunal. 12. From the material on record and after perusing the clarifications and submissions of the Petitioner Company to the Report, Supplementary Report of the RD, the Scheme appears to be fair and reasonable and does not violate any provisions of law and is not contrary to public policy. 13. Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition CP (CAA) 59/MB/2021 is made absolute in terms of prayer clauses V(a) and (b) of the Company Scheme Petition. The Scheme is sanctioned with the Appointed Date fixed as 1st April, 2020. This order is subject to the sanction to the Scheme by the National Company Law Tribunal, Chennai Bench. 14. The Petitioner Company is dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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