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TMI Blog2022 (3) TMI 1526X X X X Extracts X X X X X X X X Extracts X X X X ..... ned through video conference. 2. Heard the Learned Counsel for the Petitioner Companies. No objector has come before this Tribunal to oppose the Scheme and nor has any party controverted any averments made in the Petition to the said Scheme, pursuant to public notice issued on February 2, 2022. 3. The sanction of the Tribunal is sought under Sections 230 to 232 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the rules framed thereunder for the Scheme of Arrangement between TML Distribution Company Limited ( Petitioner Company No. 1 / Transferor Company ) and TML Business Services Limited ( Petitioner Company No. 2 / Transferee Company ) and their respective shareholders ( Scheme ). 4. The Board of Directors of Petitioner Company No. 1 and Petitioner Company No. 2 have approved the said Scheme by passing the Board Resolutions dated 30th September 2021 which are annexed to the respective Company Scheme Petition and thereafter, they have approached this Tribunal for sanction of the Scheme. 5. The Learned Advocate appearing on behalf of the Petitioner Companies states that the Petition has been filed in consonance with the Order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h transporters, managing the logistics services providers and regional stockyard operations, billing operations etc. for Tata Motors Limited. (e) The amalgamation of the Petitioner Company No. 1 with Petitioner Company No. 2 would inter alia have the following benefits for the Group: i. given the common core objective of the Petitioner Company No. 1 and the Petitioner Company No. 2 i.e. providing shared or support services, significant operational synergies stand to be gained upon merging the Transferor Company with the Transferee Company, ii. consolidation of the Petitioner Company No. 1 into the Petitioner Company No. 2 pursuant to the Scheme will result in a reduction in the number of corporate entities in the Group thereby leading to simplification of the Group structure, reduce monitoring and corporate compliances and other administration work, provide a common governance structure, thereby enhancing shareholder value, realizing operational synergies, increasing operational efficiency and integrating business functions, iii. the Petitioner Company No. 1 being smaller in terms of operations and manpower, it would commercially be less disruptive to move Petitioner Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttern of the Petitioner Company No. 2 nor would it have any adverse impact on the creditors or employees of the Petitioner Company No. 2. (h) The Scheme also provides for various other matters consequential or otherwise integrally connected herewith. (i) The Scheme will be beneficial to and in the best interest of the concerned stakeholders of the Petitioner Companies. (j) In view of the aforesaid, the Board of Directors of the Petitioner Companies have formulated the Scheme for the proposed amalgamation of the entire business and undertaking of the Petitioner Company No. 1 as a going concern into and with the Petitioner Company No. 2 pursuant to the provisions of Section 230 to Section 232 and other relevant provisions of the Act. 9. The Regional Director has filed his Report dated 14th day of February 2022 ( RD Report ) inter-alia making the following observations in Paragraphs IV (a) to (i) which are reproduced hereunder: Para Observation by the Regional Director Undertaking of the Petitioner Company/ Rejoinder IV(a) In compliance of AS-14 (IND AS103), the Petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the last of the conditions referred to in Clause 23.1 hereof are complied with or waived, as applicable. Effective Date 2 means the date fixed by the Board of the Transferee Company falling within 10 Business Days or such other extended date as may be decided by the Board, in each case, after the date on which the last of the conditions referred to in Clause 23.2 hereof are complied with or waived, as applicable. Reference in this Scheme to the date of coming into effect of Part B/ Part C of this Scheme or effectiveness of this Scheme or effect of this Scheme or upon the Scheme becoming effective shall mean the Effective Date 1 or Effective Date 2, as the case may be. Further, the Petitioner may be asked to comply with the requirements and clarified vide circular no. F. No.7/12/2019/CL-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs. So far as the observation in paragraph IV (d) of the Report is concerned, the Learned Counsel for the Petitioner Companies submits that the Appointed Date is 1st April, 2021 from which it shall be effective and the scheme shall be deemed to be effective from such date. The Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme. (v) All costs and expenses incurred by the Transferee Company in connection with the finalization, operationalization and implementation of this Scheme shall be debited to the profit and loss account of the Transferee Company. (vi) The amount of any intercompany balances, amounts or investments between the Transferor Company and the Transferee Company, appearing in the books of account of the respective Companies, shall stand cancelled in the books of accounts of the respective Companies without any further act or deed, upon Part B of this Scheme becoming effective. (vii) The difference, between the equity share capital issued by the Transferee Company under clause 16.2 (iv) above and the carrying value of all the assets, liabilities and existing reserves of the Transferor Company, in case of any excess, shall be credited to capital reserve and in case of shortfall shall be debited to amalgamation adjustment deficit account. 1.3 Comparative accounting period presented in the financial statements of the Transferee Company shall be restated for the accounting impact of amalgamation of the Transferor Company, as stated above, as if the amal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Tribunal in accordance with clause 15 of the Scheme. IV (h) The Transferor Company has 310 Unsecured Creditor value at Rs. 36,11,77,737,43/-. The Hon ble Tribunal may kindly direct the Transferee Company to protect the Unsecured Creditors. So far as the observation in paragraph IV (h) of the Report is concerned, the Learned Counsel for the Petitioner Companies submits that the Petitioner Companies undertakes that the interest of creditors will be protected. The Counsel for the Petitioner Company further submits that the Transferee Company will take all the assets and liabilities of the Transferor Company and that there rights will not be effected. IV (i)(i) ROC, Mumbai Report dated 06.01.2022 has inter alia mentioned that there are no prosecution, no technical scrutiny, no inquiry, no inspection and no complaints pending against Petitioner Companies. Further mentions that : i. Transferor and Transferee Company having two and four open charges. So far as the observation in paragraph IV i(i) of the Report is concerned, the Learned Counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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