DRAFT SCHEME OF AMALGAMATION
In this Scheme, unless inconsistent with the subject or context:
(a) “The Transferor Company” means ABCD Limited an Existing Company under section 3 of the Companies Act, 1956, having its Registered Office at __________________, in the State of _______________.
(b) “The Transferee Company” means WXYZ Limited, a Company incorporated under the Companies Act, 1956, having its Registered Office at _____________________, in the State of _______________.
(c) “The Act” means the Companies Act, 1956.
(d) “The Appointed Date” or “The Transfer Date” means April 1, 2005.
(e) “The Effective Date” means the date on which the last of the approvals hereinafter provided will have been obtained. However, for the purposes of Income Tax Act, the Effective Date shall be April 1, 2005, and for the purposes of allotment of shares of Transferee Company, the Board of Directors of the Transferee Company may fix the date.
(f) “The Scheme” means the Scheme of Amalgamation of ABCD Limited With WXYZ Limited as contained herein, or as sanctioned by the ___________ High Court, with modifications, if any.
(g) For the purpose of this Scheme, the Undertaking of the Transferor Company shall include all rights and privileges, powers and authorities, and all properties, movable and immovable, real or corporeal, incorporeal in possession or reversion, present or contingent, of whatsoever nature and wheresoever situated including in particular all licenses permits, quotas, approvals, rights, claims, leases, tenancy rights and liberties, patents, trade marks, and import quotas held by the Transferor Company o to which the Transferor Company is entitled, and all debts, liabilities and duties of the Transferor Company and all other obligations of whatsoever kinds including liabilities in respect of the employees of the Transferor Company agreed to be taken over by the Transferee Company, with regard to the payment of gratuity, pension benefits, provident fund or compensation in the event of voluntary retirement or retrenchment.
Share Capital
A. Transferor Company
On March 31, 2005, the Authorised Share Capital of the Transferor Company is Rs. 1,00,00,000 (Rupees One Crore) divided into 1,000,000 equity shares of Rs. 10 each and Rs. 10,00,000 (Rupess Ten Lakhs) divided into 1,00,000 preference shares of Rs. 10 each. The issued Capital is Rs. ____________ (Rupees _______________) divided into ___________ equity shares of Rs. 10 each and the subscribed and paid-up capital is Rs. _______________ (Rupees __________________) divided into ________ equity shares of Rs. 10 each.
B. Transferee Company
On March 31, 2005, the Authorised Share Capital of the Transferee Company is Rs. 20,00,00,000 (Rupees Twenty Crores) divided into 2,00,00,000 equity shares of Rs. 10 each and ____________ Preference Shares of Rs. _______ each. The issued capital is Rs. __________________ (Rupees _________________) divided into _____________ equity shares of Rs. 10 each and the subscribed and paid-up capital is Rs. ____________ (Rupees _______________) divided into _________________ equity shares of Rs. _____ each.
The Scheme of Amalgamation
1. (a) The Undertaking of the Transferor Company and particularly the immovable property incapable of passing by manual delivery including licences, permits, quotas, incentives, subsidies, approvals, rights, claims, leases, tenancy rights, liberties, patents, trade marks and import quotas shall under the provisions of Sections 391 and 394 of the Act and pursuant to the Orders of _______ High Court without any further act or deed but subject to the charges affecting the same as on the Effective Date, shall be transferred to and vested in the Transferee Company so as to become the Undertaking and property of the Transferee Company from the Appointed Date. Provided, however, that such charge shall not extend over or be deemed to be extended over any of the assets of the Transferee Company already owned and held by the Transferee Company.
(b) With effect from the Appointed Date, all debts, liabilities, duties and obligations of the Transferor Company (hereinafter referred to as “the said liabilities”) shall, pursuant to the Order under Section 394 of the Companies Act, 1956, of ______ High Court and without further act or deed be transferred or deemed to be transferred to and vested in and assumed by the Transferee Company so as to become the debts, liabilities, duties and obligations of the Transferee Company.
(a) Upon this Scheme becoming effective, the items appearing as Reserves and Surplus in the books of the Transferor Company as at the Appointed Date shall become the corresponding reserves and surplus of the Transferee Company.
2. If any suit, appeal, or other proceedings of whatever nature (hereinafter called the “proceedings”) by or against the Transferor Company be pending, the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the Transfer of the undertaking of the Transferor Company or of anything contained in the Scheme, but the proceedings shall be continued, prosecuted and enforced by or against the Transferee Company in the same manner and to the same extent as they would or might have been continued, prosecuted or enforced by or against the Transferor Company if the Scheme had not been made.
3. The transfer of undertaking under Clause 1 hereof and the continuance of the proceedings by or against the Transferee Company under Clause 2 hereof, shall not affect any transactions or proceedings already concluded by the Transferor Company, in the ordinary course of business on or after the Transfer Date to the end and intent that the Transferee company accepts and adopts on behalf of itself all acts, deeds and things done lawfully and executed by the Transferor Company in regard thereto as having been done or executed on behalf of the Transferee Company.
4. As from the Transfer Date, the Transferor Company shall be deemed to have carried on and to be carrying on its business for and on behalf of and on account of and in trust for the Transferee Company until such time that the amalgamation becomes effective in terms of the Scheme.
5. As from the Transfer Date, the Transferor Company shall carry on the business of the Transferor Company until the amalgamation becomes effective, with utmost prudence and shall not without concurrence of the Transferee Company alienate, charge or otherwise deal with the property or assets of the Transferor Company or any part thereof, except in the ordinary course of business.
6. With effect from the Transfer Date and up to and inclusive of the Effective Date, all the profits and incomes accruing or arising to the Transferor Company or expenditure and losses incurred or arising as the case may be by the Transferor Company shall, for all purposes, be treated and be deemed to be and accrue as profits or income or expenditure or losses, as the case may be of the Transferee Company.
7. Subject to the other provisions contained in the Scheme, all lawful contracts, deeds, bonds, agreements and other instruments of whatever nature to which the Transferor Company is a party subsisting or having effect immediately before the amalgamation shall be in full force and effect against or in favour of the Transferee Company and may be enforced as fully and effectively as if instead of the Transferor Company, the Transferee Company had been a party thereto.
8. (a) All employees of the Transferor Company in the employment of the Transferor Company on the Effective Date, shall, as from the said date become the employees of the Transferee Company on the basis that their services have not been interrupted by the vesting of the undertaking of the Transferor Company in the Transferee Company under the Scheme and that the terms and conditions of service applicable to them immediately after the Effective Date will not be in any way less favourable to them, than those applicable to them immediately before the Effective Date.
(a) As far as the Provident Fund, Gratuity Fund, Superannuation Fund or any other Special Fund created or existing for the benefit of the employees of the Transferor Company are concerned, upon the Scheme becoming effective, the Transferee Company shall be substituted for the Transferor Company for all the purposes whatsoever related to the administration or operation of such Schemes or Funds or in relation to the obligation to make contributions to the said Funds in accordance with provisions of such Schemes or Funds according to the terms provided in the respective Trust Deeds or other documents. All the rights, duties, powers, and obligations of the Transferor Company in relation to such Schemes or Funds shall become those of the Transferee Company. The services of the employees of the Transferor Company will be treated as being continuous for the purposes of the aforesaid Schemes or Funds.
9. (a) Upon the Scheme become effective, in consideration of the transfer to and vesting of the undertaking of the Transferor Company in terms of the Scheme, the Transferee Company shall, with any application being made by the shareholders of the Transferor Company, issue and allot to the equity shareholders of the Transferor Company, equity shares in the Transferee Company in the proportion of 1 (one) share of the face value of Rs. 10 each of the Transferee Company, credited as fully paid up for every 25 (twenty five) fully paid up equity shares of the face value of Rs. 10 each, held by the equity shareholders of the Transferor Company on such date as the Board of Directors of the Transferee Company may decide.
(b) As a result of the issue and allotment of the share capital of the Transferor Company in the manner specified in sub-clause (a) to this Clause hereinabove, if any equity shareholder of the Transferor Company becomes entitled to any fraction of equity shares of the Transferee Company, no such fractional coupon shall be issued in respect of or representing such equity shares of the Transferee Company, but such fractional coupon shall be consolidated into whole equity shares and the Board of Directors of the Transferee Company, or a Committee thereof may allot any one or more of such consolidated shares to any nominee(s) as the Board of Directors or the Committee may their absolute discretion deem fit for the purpose of holding and selling of such consolidated equity shares. Every such sale of the consolidated equity shares shall be at such price or prices as may be approved by the Board of Directors or the Committee and upon receipt of the purchase price in respect of such sale (provided the Board of Directors or the Committee approved the purchaser), the Board of Directors or the Committee shall allot the equity shares to the approved purchaser/s. the total net sale proceeds of such consolidated equity shares (after defraying therefrom all costs, charges, and expenses of sale) shall be distributed and divided among those equity shareholders of the Transferor Company as would otherwise have been entitled to such fractions of the equity shares of the Transferee Company in proportion to their respective interest in such fractions.
(b) Equity shares so allotted by the Transferee Company to the shareholders of the Transferor Company will in all respects rank pari-passu with the existing equity shares of the Transferee Company for dividend, voting and other rights.
(c) Every shareholder of the Transferor Company shall surrender to the Transferee Company for cancellation, the relevant share certificate(s) held in the Transferor Company and thereupon the Transferee Company shall issue the certificate(s) for the shares in the Transferee Company he or she may be entitled to.
10. The ____________ equity shares of Rs. _____ each, paid up, in the Transferor Company are held by the Transferee Company. The said _________ equity shares shall be transferred by the Transferee Company before the date of allotment of shares by it pursuant to Clause 9 hereof, to such party/parties as the Board of Directors of the Transferee Company may think fit.
11. Upon the Scheme becoming effective, the Main Objects of the Memorandum of Association of the Transferor Company shall form part of the Main Objects of the Memorandum of Association of the Transferee Company.
12. On the Scheme being agreed to by the requisite majorities of the members of the Transferor Company and of the members of the Transferee Company, the Transferor Company and the Transferee Company shall with reasonable despatch, apply to the High Court of Judicature at Mumbai for obtaining sanction to this Scheme of Amalgamation under Section 391 of the Act and for an Order or Orders under Section 394 of the Act for carrying this Scheme into effect and for dissolution of the Transferor Company without winding up as also any Order or Orders as may be necessary and appropriate under the Act.
13. The Scheme is conditional upon and subject to: -
(a) The Scheme being agreed to by the respective requisite majorities of the members of both the Companies as are referred to in clause 12 hereof and the requisite Order or Orders referred to in Clause 12 being obtained;
(b) Such other sanction and approvals as may be required by law in respect of the Scheme being obtained.
14. This Scheme, although to come into operation from the Appointed Date, shall not become effective until the date on which the certified copies of the Orders under Sections 391 and 394 of the Act shall be duly filed with the Registrar of Companies, Maharashtra State
15. In the event of any of the approvals or conditions required to be obtained or fulfilled are not obtained or complied with on or before December 31, 2005, or within such further period or periods as may be agreed upon by and between the Transferor Company and the Transferee Company (through their respective Board of Directors) the Scheme shall become null and void and in that event no rights or liabilities whatsoever shall accrue to or be incurred inter se between the Transferor Company and the Transferee Company.
16. All costs, charges and expenses of the Transferor Company and the Transferee Company respectively in relation to or in connection with the negotiation leading up to this Scheme or carrying out and completing the terms and provisions of this Scheme shall be borne and paid by the Transferee Company.
17. For the purpose of giving effect to the Scheme, the Board of Directors of the Transferee Company or any Committee thereof, is authorized to give such directors as may be necessary or desirable and to settle as they may deem fit, any question, doubt or difficulty that may arise in connection with or in the working of the Scheme including with regard to issue and allotment of Equity Shares under Clause 9 hereof, to the members of the Transferor Company and to do all acts, deeds and things necessary for carrying into effect the Scheme.
18. A copy of the order of the _________________ High Court sanctioning the Scheme of Amalgamation shall be filed by the Transferor Company and the Transferee Company with Registrar of Companies, ____________, within one month from the date the Order is received by the Transferor Company and the Transferee Company.
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