SCHEME OF
AMALGAMATIONBETWEENXYZ LIMITED AND ITS
MEMBERSANDA & B LIMITED AND
ITS MEMBERS[For Amalgamation of
XYZ Limited with A & B Limited under Section 391 read with Section 394 of
the Companies Act, 1956]1. Definitions: In this
Scheme, unless inconsistent with the subject or context, the following
expressions shall have the following meanings:1.1 "the Act"
means the Companies Act, 1956 or any statutory modification or re-enactment
thereof for the time being in force.1.2 "the Appointed
Date" means the...... date of.... or such other date as may be fixed or
approved by the High Court at.....1.3 "the Effective
Date" means the last of the dates on which the sanctions, approvals or
orders specified in Clause 15 of this Scheme ate obtained.1.4 "the
Scheme" means this Scheme of Amalgamation in its present form or with any
modification(s) approved or imposed or directed by the High Court at.....1.5 "the Transferor
Company" means XYZ Limited, a Company incorporated under the Companies
Act, 1956 and having its Registered Office at1.6 "the Transferee
Company" means A & B Limited, a company incorporated under the
Companies Act, VII of 1956 and having its registered Office at1.7 "Undertaking"
means:a. All the assets and
properties of the Transferor Company as on the Appointed Date (hereinafter
referred to as "the said assets");b. All the debts,
liabilities, duties and obligations of the Transferor Company including
contingent liabilities as on the Appointed Date (hereinafter referred to as
"the said liabilities");c. Without prejudice to
the generality of sub-clause (a) above, the Undertaking of the Transferor
Company shall include all the Transferor Company's reserves and the authorised
share capital, movable and immovable properties including investments, claims,
powers, authorities, allotments, approvals, consents, registrations, contracts,
engagements, arrangements, rights, credits, titles, interests, benefits, club
memberships, advantages, leasehold rights, brands, tenancy rights, other
intangibles, industrial and other licences, permits, authorisations, quota
rights, trade marks, patents and other industrial and intellectual properties
including, know-how, domain names, import quotas, telephones, telex, facsimile
and other communication facilities and equipment, rights and benefits of all
agreements and all other interests, rights and powers of every kind, nature and
description whatsoever, privileges, liberties, easements, advantages, benefits
and approvals of whatsoever nature and where soever situate, belonging to or in
the ownership, power or possession or control of the Transferor Company as on
the Appointed Date and thereafter.2. Share Capital:2.1 The authorised and
the issued, subscribed and paid up share capital of the Transferor Company is
as follows:The authorised share
capital is Rs........ (Rupees.....) divided into...... equity shares of Rs....
each. The issued, subscribed and paid-up share capital is Rs.......
(Rupees.......) divided into........ equity shares of Rs...... each.The Authorised Share
Capital of the Transferee Company is Rs........ (Rupees.................)
consisting of......... equity shares of Rs...... each aggregating to Rs......
and........ unclassified shares of Rs.....each aggregating to Rs...............
The issued Capital of the Transferor Company is Rs........ and the subscribed
and paid up capital is Rs.........3. Vesting of
Undertaking:3.1 With effect from the
Appointed Date, the Undertaking shall, pursuant to the provisions contained in
Section 394 and other applicable provisions of the Act, stand transferred to
and vest in or be deemed to be transferred to and vested in the Transferee Company
as a going concern without any further act, deed, matter or thing (save as
provided in Clause 3.2 below) so as to become on the Appointed Date, the assets
(subject to encumbrances and charges, if any, existing thereon) or liabilities
of the Transferee Company. Provided always that the Scheme shall not operate to
enlarge the scope of security for any loan, deposit or facility availed of by
the Transferor Company and the Transferee Company shall not be obliged to
create or provide any further or additional security therefor after the
Effective Date or otherwise.3.2 It is expressly
provided that in respect of such of the said assets as arc movable in nature,
including cash in hand, or otherwise capable of being transferred by manual
delivery or by endorsement and delivery, the same shall be so transferred by
the Transferor Company. In respect of movable assets, other than those
specified in clause 3.1 above, including sundry debtors, outstanding loans and
advances, if any, recoverable in cash or in kind or value to be received, bank
balances and deposits, if any. the following modus operandi shall be followed:The Transferor
Company shall give notice in such form as they may deem fit and proper to each
party, debtor or depositee as the case may be, that pursuant to the Orders of
the High Court at..... sanctioning the Scheme, the said debts, loans, advances,
etc. be paid or made good or held on account of Transferee Company as the
person entitled thereto to the intent and purposes that the right of the Transferor
Company to recover or realise the same stands extinguished. The Transferee
Company may, if required, give notice in such form as it may deem fit and
proper to each person, debtor or depositee that pursuant to the Orders of the
High Court.... of sanctioning the Scheme, the said person, debtor or deposited
should pay the debt, loan or advance or make good the same or hold the same to
its account and that the right of the Transferee Company to recover or realise
the same is in substitution of the right of the Transferor Company.3.3 With effect from the
Appointed Date all the debts, liabilities, contingent liabilities duties and
obligations of the Transferor Company shall, pursuant to the Orders of the High
Court of....... under Section 394 and other applicable provisions of the Act
and without any further act or deed, be also transferred or deemed to be
transferred to and vest in and be assumed by the Transferee Company, so as to
become as from the Appointed Date the debts, liabilities, duties and
obligations of the Transferee Company on the same terms and conditions as were
applicable to the Transferor Company.4. Accounting Treatment:4.1 On the Scheme
becoming effective, the Transferee Company shall account for the merger in its
books as specified hereunder:i.
all
the assets and liabilities recorded in the books of the Transferor Company
shall stand transferred to and vested in the Transferee Company pursuant to the
Scheme and shall be recorded by the Transferee Company at their book values as
appearing in the books of the Transferor Company;ii.
On
and from the Appointed Date and subject to any corrections and adjustments as
may, in the opinion of the Board of Directors of the Transferee Company, be
required, the reserves and the balance in the Profit and Loss Account of the
Transferor Company will be merged with those of the Transferee Company in the
same form as they appear in the financial statements of the Transferor Company;iii.
The
difference, if any, between the amount recorded as fresh share capital issued
by the Transferee Company on amalgamation and the amount of share capital of
the Transferor Company shall be reflected as General Reserves.iv.
In
case of any difference in accounting policy between the Transferor Company and
the Transferee Company, the impact of the same till the amalgamation will be
quantified and adjusted in the reserves of the Transferee Company to ensure
that the financial statements of the Transferee Company reflect the financial
position on the basis of consistent accounting policy.5. Contracts, Deeds,
Bonds and Other Instruments:Subject to the other
provisions of the Scheme, all contracts, deeds, bonds, agreements including the
contracts for tenancies and licence arrangements and other instruments of
whatsoever nature to which the Transferor Company is a party subsisting or
having effect immediately before or after the Effective Date shall remain in
full force and effect against or in favour of the Transferee Company and shall
be binding on and be enforceable against the Transferee Company or be
enforceable by the transferee Company as fully and effectually as if it had at
all material times been a party thereto.6. Date When the scheme
comes into operation: The Scheme, though operative from the Appointed Date,
shall be effective from the Effective Date.7. Conduct Of Business
By The Transferor Company Until The Effective Date: With effect from the
Appointed Date and upto and including the Effective Date, the Transferor
Company shall:i.
carry
on and be deemed to carry on all its business and activities and stand
possessed of its properties and assets for and on account of and in trust for
the Transferee Company and all the profits accruing to the Transferor Company
or losses arising or incurred by them shall for all purposes be treated as the
profits or losses of the Transferee Company, as the case may be;ii.
carry
on its business with reasonable diligence and shall not without the prior
written consent of the Transferee Company alienate, charge or otherwise deal
with or dispose of the Undertaking or any part thereof except in the ordinary
course of its business;iii.
not
vary the terms and conditions of service of its permanent employees except in
the ordinary course of its business;iv.
not,
without the prior written consent of the Transferee Company, undertake any new
business or a substantial expansion of its existing business.8. Legal Proceedings:
All suits, claims, actions and proceedings, by or against the Transferor
Company pending and/ or arising on or before the Effective Date shall be
continued and be enforced by or against the Transferee Company, as effectually
as if the same had been pending and/ or arising against the Transferee Company.9. Issue and Allotment
Of Shares By The Transferee Company:9.1. Upon the Scheme becoming finally
effective, in consideration of the transfer and vesting of the Undertaking in
the Transferee Company in terms of the Scheme, the Transferee Company shall,
without any further application, act or deed, issue and allot a( par.......
equity shares of Rs......... each credited as fully Paid up in the capital of
the Transferee Company to every equity shareholder of the Transferor Company
whose name appears in the Register Members on a date ("Record Date ")
to be fixed by the Board of Directors of the Transferee Company for every......
equity shares of Rs.... each held by the said shareholder in the Transferor
Company, in the electronic form and by issue of share certificates for those
share holders who hold the shares in physical form. The equity shares when
issued and allotted by the Transferee Company in terms of the Scheme shall rank
for diligence, voting rights and in all other respects pari passu with the
existing equity shares of the Transferee Company.9.2. No fractional Certificates/Coupons
shall be issued by the Transferee Company in respect of the fractional entitlements,
if any, to which the shareholders of the Transferor Company may be entitled on
issue and allotment of the equity shares of the Transferee Company as
aforesaid. The Board of Directors of the Transferee Company shall instead
consolidate all such fractional entitlements to which the shareholders of the
Transferor Company may be entitled on issue and allotment of the equity shares
of the Transferee Company as aforesaid and thereupon issue and allot equity
shares in lieu thereof to a Director or any Officer respectively of the
Transferee Company with the express understanding that such Director or Officer
to whom such equity shares are issued and allotted shall hold the same in trust
for those entitled to the fractions and sell the same in the market at the best
available price and pay to the Transferee Company, the net sale proceeds
thereof whereupon the Transferee Company shall, subject to the approval of the
Reserve Bank of India, wherever required, and subject to withholding tax, if
any, distribute such net sale proceeds to the shareholders of the Transferor
Company in proportion to their fractional entitlements. Holders of less than
... equity shares in the Transferor Company shall be entitled to receive
proportionate number of shares in the Transferee Company, and for the remaining
fractional entitlements, if any, they shall receive sale proceeds as mentioned
above.9.3.
effective and upon the new shares in the Transferee Company being issued and
allotted by it to the shareholders of the Transferor Company whose names appear
on the Register of Members of the Transferor Company on the Record Date fixed
as aforesaid, the shares in the Transferor Company, both in electronic form and
in the physical form, shall be deemed to have been automatically cancelled and
be of no effect on and from the Record Date. Wherever applicable, the
Transferee Company shall instead of requiring the surrender of the share
certificates of the Transferor Company, directly issue and dispatch the new
share certificates of the Transferee Company in lieu thereof.9.6. For the purpose aforesaid, the
Transferee Company shall, if and to the extent required, apply for and obtain
the consent of the Reserve Bank of India and other concerned authorities, to
the issue and allotment of equity shares to the non-resident shareholders of
the Transferor Company in the aforesaid manner.9.7. The issue and allotment of equity
shares in the Transferee Company by the Transferee Company to the shareholders
of the Transferor Company as provided in this Scheme as an integral part
thereof, shall be deemed to have been carried out as if the procedure laid down
under Section 81(1A) and any other applicable provisions of the Act were duly
complied with.9.8. Upon issue and allotment of Equity
Shares in the Transferee Company to the members of the Transferor Company as
provided in the Scheme, the existing Equity Shares held by members of the
Transferor Company shall stand automatically cancelled/extinguished.10. Dividends, Profits,
Bonus/Rights Shares:10.1 Dividends (interim or final) in
respect of the period commencing from the Appointed Date may be declared or
paid by the Transferor Company or Transferee Company after mutual consultation
with each other.10.2 Except as envisaged under this Scheme,
the Transferor Company and the Transferee Company shall not issue or allot
after the Appointed Date any rights shares, bonus shares or other shares out of
their respective authorised or unissued share capital for the time being,
without the consent of the other.11. Employees of The
Transferor Company:11.1 All employees of the Transferor
Company, who are in service on the date immediately preceding the Effective
Date shall become the employees of the Transferee Company on the Effective
Date.11.2 On the Scheme finally taking effect as
hereinafter provided:a. The employees of the
Transferor Company shall become the employees of the Transferee Company,
without any break or interruption in service and on terms and conditions not
less favourable than those on which they are engaged by the Transferor Company
as on the Effective Date. Services of all employees with the Transferor Company
upto the Effective Date shall be taken into account for purposes of all
retirement benefits for which they may be eligible. The Transferee Company
further agrees that for the purpose of payment of any retrenchment
compensation, such past services with the Transferor Company shall also be
taken into account;b. The services of such
employees shall not be treated as having been broken or interrupted for the
purpose of Provident Fund or Gratuity or Superannuation or other statutory
purposes and for all purposes will be reckoned from the date of their
respective appointments with the Transferor Company;c. It is provided that
as far as the Provident Fund, Gratuity Fund and Pension and/ or Superannuation
Fund or any other special fund created or existing for the benefit of the
staff, workmen and other employees of the Transferor Company are concerned,
upon the Scheme becoming finally effective, the Transferee Company shall stand
substituted for the Transferor Company in respect of the employees transferred
with the Undertaking for all purposes whatsoever relating to the administration
or operation of such Funds or Trusts or in relation to the obligation to make
contribution to the said Pounds or Trusts in accordance with the provisions of
such Funds or Trusts as provided in the respective Trust Deeds or other
documents. The above shall include any trust created from the above mentioned
funds for the staff and officers of the Transferor Company which shall be
merged with such or similar funds of the Transferee Company. It is the aim and
the intent of the Scheme that all the rights, duties, powers and obligations of
the Transferor Company in relation to such Funds or Trusts shall become those
of the Transferee Company.12. Applications to The
High Court At......:12.1 The Transferor Company shall make
applications / petitions under Sections 391 and 394 and other applicable
provisions of the said Act to the High Court of...... for sanction of this
Scheme and for dissolution of the Transferor Company without winding-up under
the provisions of law.12.2 The Transferee Company shall make
applications/ petitions under Sections 391 and 394 and other applicable
provisions of the said Act to the High Court........ for sanction of this Scheme
under the provisions of law.13. Modifications /
Amendments To The Scheme:13.1 The Transferor Company and the
Transferee Company through their respective Boards of Directors in their full
and absolute discretion, may assent to any modification or amendment to the
Scheme which the High Court... the shareholders of the Transferor Company
and/or Transferee Company and/or any other competent authority may deem fit to
approve /impose and effect any other modification or amendment which the Boards
in the best interests of the Transferor Company or Transferee Company may
consider necessary or desirable and give such directions as they may consider
necessary or desirable for settling any question, doubt or difficulty arising
under the Scheme or in regard to its implementation or in any matter connected
therewith (including any question, doubt or difficulty arising in connection
with any deceased or insolvent shareholder of the Transferor Company or the
Transferee Company) and to do all acts, deeds and things as may be necessary,
desirable or expedient for carrying the Scheme into effect. In the event that
any modification or amendment to the Scheme is unacceptable to the Transferor
Company and/ or the Transferee Company for any reason whatsoever, the
Transferor Company and/or Transferee Company shall be at liberty to withdraw
from the Scheme at any time.13.2 For the purpose of giving effect to
the Scheme or to carry out any modification or amendment thereto, the Boards of
Directors of the Transferor Company and the Transferee Company or any Committee
thereof is authorised to give such directions and/ or to take such steps as may
be necessary or desirable including any directions for settling any question,
doubt or difficulty whatsoever that may arise.14. Winding Up: On the
Scheme becoming effective, the Transferor Company shall be dissolved without
being wound up.15. Scheme Conditional On
Approvals/ Sanctions: The Scheme is conditional on and subject to:a. the approval of and
agreement to the Scheme by the requisite majorities in number and value of such
classes of persons of the Transferee Company as may be directed by the High
Court of....... and of the Transferor Company as may be directed by the High
Court of....... on the applications made for directions under Section 391 of
the Act for calling' meetings and necessary resolutions being passed under the
Act for the purpose;b. the sanction of the
High Court of........ under Sections 391 and 394 of the said Act in favour of
the Transferee Company and the sanction of the High Court of.........under the
said provisions in favour of the Transferor Company and to the necessary Order
or Orders under Section 394 of the said Act being obtained;c. certified copies of
the Orders of the High Court of...... sanctioning the Scheme being filed with
the Registrar of Companies, at........ by the Transferee Company and the
Transferor Company respectively.16. Effect Of Non Receipt
Of Approvals/ Sanctions: In (he event of any of the said suctions and approvals
referred to in the preceding Clause not being obtained and/ or the Scheme not
being sanctioned by the High Court of...... and/ or the Order or Orders not
being passed as aforesaid before the... day of..... or within such further
period or periods as may be agreed upon between the Transferor Company and the
Transferee Company by its Boards of Directors (and which the Boards of
Directors of the Companies are hereby empowered and authorised to agree to and
extend the Scheme from time to lime without any limitation), this Scheme shall
stand revoked, cancelled and be of no effect, save and except in respect of any
act or deed done prior thereto as is contemplated hereunder or as to any rights
and/ or liabilities which might have arisen or accrued pursuant thereto and
which shall be governed and be preserved or worked out as is specifically
provided in the Scheme or as may otherwise arise in law. Each party shall bear
and pay its respective costs, charges and expenses for and or in connection
with the Scheme.17. Costs and Expenses:
All costs, charges and expenses of the Transferor Company and of the Transferee
Company in relation connection with the Scheme shall be respectively borne by
the Transferor Company and the Transferee Company.