9911796707
TMI Blog2021 (8) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading Company Private Limited ( Transferor Company 1 ), Snam Investments Private Limited ( Transferor Company 2 ), with Subhash Arora Investments (India) Private Limited ( Transferee Company ) jointly under section 230-232 read with section 66 of Companies Act, 2013, and read with Rule 15 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 in relation to the Scheme of Arrangement by way of Amalgamation (hereinafter referred to as the SCHEME ) proposed between the applicants. The said Scheme is also annexed as Annexure-A1 to the application, however, the revised scheme was filed by the applicant companies through filing of additional documents. 2. From the information enumerated in the application, it is evident that Transferor Company 1 is a private limited company incorporated under the provisions of Companies Act, 1956 on 12th April 1983, with Registrar of Companies, New Delhi under the name and style of Molly Trading Company Private Limited , CIN is U65993DL1983PTC160689. The main object of the Transferor Company 1 is making, holding and nurturing investments in various companies 3. From the information enumerated in the application, it is evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner Company 1 and 2 to merge with Petitioner Company 3 so that combined resources are utilized for the general expansion of the business of Petitioner Company 3 resulting in the benefits to the shareholders of all the concerned companies. 6. The proposed scheme provides that, all properties, being movable or immovable, tangible or intangible, intellectual property rights belonging to the Transferor Companies and rights, titles and interest therein, if any, shall pursuant to provisions of Section 232(4) of the Act be transferred to and stand vested in the transferee Company. 7. Clause 7 of the Part B and Clause 7 of Part C of the Scheme provides about treatment of taxes, upon the scheme becoming effective and with effect from the appointed Date, all taxes and duties payable by the Transferor Companies (including under IT Act, Customs Act, 1962, Central Excise Act, 1944, State Sales Tax Laws), Central Sales Tax, 1956, VAT/Service tax, Goods and Services Tax Laws and all other applicable laws), accruing and relating to the Transferor Companies from the appointed date onwards, including but not limited to advance tax payments, tax deducted at source, minimum alternate ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal; B. The Applicant Companies have not furnished valuation Report, hence share exchange ratio can't be commented. C. As per Auditor Report as on 31.03.2019, the Transferor Company No. 2 has accumulated losses of ₹ 29,01,48,777/- which exceeds 50% of its net worth. Hence, it appears that the only purpose of the scheme is to adjust the losses of Transferor Company No. 2 with the Transferee Company. 10. The Applicant Companies have filed the affidavit and responded to the observations made by the Regional Director which are as follows: A. The entire preference shareholdings of the Transferor Company No. 2 are cross-holdings of Transferor Company No. 1 and the Transferee Company. B. The Petitioner Companies through their Boards have approved a modification in clause 11.2(i) of the Scheme to give effect to this observation of the Ld. Regional Director. C. The Applicant Companies are closely held companies and the shareholders of the Applicant Companies are family, being father and sons, who have accorded their consent on share exchange ratio of 1:1, in their commercial wisdom by way of the scheme through an affidavit. Furthermore, a valuation repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with applicable law. 13. The Reserve Bank of India has approved the scheme vide its letter bearing No. DNBS.ND. No. 210/CMS VIII/05.19.317/2019-20 dated 30th July, 2019 subject to certain post-merger compliances. 14. Clause 11 of Part B and Clause 11 of the Part C of the Scheme provides with regard to accounting treatment, which states that all assets and liabilities of the Transferor Companies, transferred to the transferee Company under the scheme shall be recorded in the books of accounts of the transferee Company at the book value as recorded in the books of Accounts of the Transferor Company With effect from the appointed date and subject to the provisions hereof and such other corrections and adjustments as may in the opinion of the Board of Directors of the Transferee Company be required and except to the extent required otherwise by law: (i) The difference between the amount recorded as new equity shares issued by the Transferee Company on amalgamation and the amount of the share capital of the Transferor Companies shall after adjustment of miscellaneous expenditure (to the extent not written off), and debit balance in the profit and loss account, if ..... 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