Per: Ms. Lakshmi Gurung, Member (Judicial)

1. The sanction of this Tribunal is sought under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and the Rules framed thereunder for sanction of the Scheme of Amalgamation of Romax Solutions Private Limited (“First Petitioner Company/ Transferor Company”) and Hexagon Manufacturing Intelligence India Private Limited (“Second Petitioner Company/ Transferee Company”) and their respective shareholders (“Scheme”).

2. The Transferor Company approved the said Scheme of Amalgamation by passing the Board Resolution on 18.11.2022 and the Transferee Company approved the Scheme by passing Board Resolution on 11.01.2023. The Board Resolutions of the Petitioner Companies are annexed to the Joint Company Scheme Petition (“Petition”).

3. The Appointed Date is 1st April 2022.

4. Learned Counsel submits that the Company Scheme Petition No. C.P. (CAA) No. 124/MB/2023 has been filed in consonance with the Order of the Tribunal dated 16.02.2023 passed in the Company Scheme Application No. C.A. (CAA) No. 24/MB/2023.

5. Learned Counsel further states that the Petitioner Companies have complied with all the requirements as per the directions of this Tribunal and that they have filed necessary affidavits of compliance with the Tribunal.

6. Nature of Business

It is submitted that the Transferor Company is engaged in the business of providing engineering, sales & Marketing, and software support services. The Transferee Company is engaged in the business of providing software development services, distribution of software licenses and provision of Information Technology and enabled Services (ITeS).

7. The registered offices of the Petitioner Companies are situated in Pune, Maharashtra and hence the subject matter of the Petition is within the jurisdiction of this Bench.

8. The shares of the Petitioner Companies are not listed on any stock exchange.

9. The Learned Counsel submitted the Rationale for the Scheme as under:

The proposed amalgamation would accomplish the following benefits:

a) Reduction in number of entities,

b) Reducing administrative costs; and

It is believed that the Proposed Scheme will allow a more focused growth strategy which would be in the best interests of all the stakeholders.

10. Consideration:

For Equity Shareholders in the Transferor Company:

Shareholder of the Transferor Company viz., Romax Solutions Private Limited holding 50,000 (Fifty thousand) equity shares along with the nominee shareholder holding one equity share as on the Record Date having face value Rs. l0 (Rupees Ten Only) each fully paid-up shall be issued and allotted 1,45,300 New Equity Shares of the Transferee Company having face value Rs. l0 (Rupees Ten Only) each credited as fully paid-up."

For Redeemable Preference Shareholder in the Transferor Company:

"Shareholder of the Transferor Company holding 4,45,000 (Four lacs and forty-five thousand) 6% redeemable cumulative preference shares as on the Record Date having face value Rs. 10 (Rupees Ten Only) each fully paid-up shall be issued and allotted 4,717 New Equity Shares of the Transferee Company hating face value Rs. 10 (Rupees Ten Only) each credited as fully paid-up "

11. A certificate on swap ratio was issued by Mr. Darshan Jayantilal Rathod, Registered Valuer, which is annexed to the Petition. As per the certificate, the following swap ratio was determined by the said Registered Valuer:

i) For the equity shareholders of the Transferor Company, the swap ratio will be 2.906:1, i.e. 2.906 equity shares of the Transferee Company will be issued for every 1 share of the Transferor Company.

ii) For the preference shareholders of the Transferor Company, the swap ration will be 106:10,000, i.e. 106 equity shares of the Transferee Company will be issued for every 10,000 preference shares of the Transferor Company.

12. The Tribunal vide Order dated 16.02.2023 admitted the Company Scheme Application bearing no. CA(CAA)/24/MB/2023 and interalia, dispensed with the requirement of:

a) convening the meetings of equity shareholders and preference shareholders of the Transferor Company;

b) convening the meeting of equity shareholders of the Transferee Company.

13. There are no secured creditors and no unsecured creditors in the Transferor Company, and no preference shareholders and no secured creditors in the Transferee Company. Therefore, the question of convening and holding the said meetings did not arise.

14. The Tribunal vide the said Order dated 16.02.2023 dispensed with the meeting of the unsecured creditors of the Transferee Company and directed the Transferee Company to issue notice to its unsecured creditors. Accordingly, notices were issued to the unsecured creditors via email. The copies of the emails sent to the unsecured creditors are annexed to the Petition.

15. The Regional Director has filed Report dated 20th June 2023. In response to the observations of the Regional Director, the Petitioner Companies have submitted/undertaken that:

i) The Petitioner Companies shall comply with the provisions of section 232(3)(i) of the Companies Act, 2013 in respect of fees payable, if any, by Transferee Company for increase of share capital on account of merger of transfer of companies.

ii) The Petitioner Companies undertake that in addition to compliance of AS-14 or IND AS-103 for accounting treatment, the Resultant Company shall pass such accounting entries as may be necessary in connection with the Scheme to comply with other applicable accounting standards such as AS-5 or IND AS-8 as applicable.

iii) The Scheme enclosed to Company Application & Company Petition, are one and same and there are no discrepancy / any change / changes are made.

iv) The Petitioner Companies confirm that notices have been served to the concerned authorities which are likely to be affected by Amalgamation or arrangement.

v) The Petitioner Companies confirm that the Appointed Date mentioned in the Scheme is 1st April 2022. In this regard, the Petitioner Companies confirm and undertake that upon the Hon'ble National Company Law Tribunal, Mumbai Bench approving the Scheme, the Scheme shall take effect from the Appointed Date i.e., 1st April 2022 in terms of provisions of Section 232(6) of the Companies Act, 2073. Further, the Petitioner Companies through their counsel submit that they will comply with the provisions and requirements clarified vide circular no. F. No.7112120191CL-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs.

vi) The Petitioner Companies shall ensure compliance with the directions of the concerned sectoral Regulatory, if so required.

vii) The Petitioner Companies shall ensure compliance with the directions of Income tax department, if any.

viii)The Regional Director observed that:

“As per the financial statements as on 31.03.2022, the petitioner Transferor Company Romax Solutions Private Limited, the auditor of the Company has made observations at Note no.23 that “Income Tax matters pertain to certain expenses of the Company disallowed for earlier years and excess claim made under section 10A of the Income Tax Act, 1961”. Hence the Petitioner Company may be directed to comply the same before approval of the Scheme.”

The Petitioner Companies undertook to comply the same before approval of the Scheme.

ix) The interest of creditors shall be protected on implementation of the Scheme.

x) Petitioner Companies have foreign shareholders. Hence, the Petitioner Companies undertakes comply with the rules, regulations, guidelines of FEMA, FERA and RBI.

xi) The Petitioner Companies submit that as per provisions of section 90 of the Companies Act, 2013 r/w Companies (Significant Beneficial Owners) Amendment Rules, 2019, filing of Form BEN-2 for declaring name of the significant beneficial owner with concerned ROC is not applicable to the Petitioner Companies.”

16. This Tribunal had directed the Petitioner Companies to give a detailed explanation as to how the filing of Form BEN-2 is not applicable to them. In compliance, the Petitioner Companies filed a Rejoinder dated 16.10.2023 and submitted the following:

a) “For Hexagon Manufacturing Intelligence India Private Limited (‘HexagonIndia’ or ‘the Transferor Company’): Hexagon India is a subsidiary of Hexagon Smart Solutions AB, Sweden, wherein Hexagon Smart Solutions AB owns 99.99% shares of the transferor Company, which is further a subsidiary of the ultimate holding company i.e., Hexagon AB, Sweden, a Company listed in the stock exchange of Sweden i.e., Nasdaq Stockholm. The legal entity structure of Hexagon AB does not cite any individual who holds more than 10% shares and could fall under the category of Significant Beneficial Ownership as per the Significant Beneficial Ownership Rules), 2018 (‘SBO Rules’).

b) For Romax Solutions Private Limited (‘Romax India’ or ‘the Transferee Company’): Romax India is a subsidiary of Romax Technology Limited, UK wherein Romax Technology Limited, UK owns 99.99% shares of the transferee Company, which is further a subsidiary of the ultimate holding company i.e., Hexagon AB, Sweden, a Company listed in the stock exchange of Sweden i.e., Nasdaq Stockholm. The legal entity structure of Hexagon AB does not cite any individual who holds more than 10% shares and could fall under the category of Significant Beneficial Ownership as per the Significant Beneficial Ownership Rules), 2018 (‘SBO Rules’).”

17. Mr. Tushar Wagh, representing the Regional Director’s Office, submitted that the explanations and undertakings given by the Petitioner Companies are found satisfactory and that the Regional Director has no objections to the Scheme. However, it is made clear that mere sanctioning of this Scheme will not prevent the Registrar of Companies from taking any action against the Transferee Company, in accordance with applicable law.

18. The Official Liquidator, Bombay High Court has filed his report dated 24.08.2023 stating that the affairs of the Transferor Companies have been conducted in a proper manner.

19. No objections have been received by the Tribunal opposing the Company Scheme Petition and nor has any party controverted any averments made in the Company Scheme Petition.

20. It has been submitted that no investigation proceedings are pending against the Petitioner Companies under the Companies Act.

21. The Statutory Auditors of the Transferee Company have examined the Scheme in terms of provisions of Sections 230-232 and certified that the accounting treatment specified in the Scheme is in compliance with the applicable accounting standards specified under section 133 of the Companies Act, 2013, and other generally accepted accounting principles.

22. The shareholders and Creditors of the Petitioner Companies are the best judges of their interest. Their decision should not be ordinarily interfered with by the Tribunal as per the decision of Hon’ble Supreme Court in Miheer H. Mafatlal vs. Mafatlal Industries Ltd [JT 1996 (8) 205 [LQ/SC/1996/1478] ] wherein it was held as follows:

“It is the commercial wisdom of the parties to the scheme who have taken an informed decision about the usefulness and propriety of the scheme by supporting it by the usefulness and propriety of the scheme by supporting it by the requisite majority vote.”

23. From the material on record, the Scheme to the Company Scheme Petition appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.

24. In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme, and the affidavits filed by the Regional Director, the rejoinder of the Petitioner Companies and the report of the Official Liquidator, there appears to be no impediment in sanctioning the present Scheme.

25. Consequently, sanction is hereby granted to the Scheme under Sections 230 to 232 of the Companies Act, 2013 with the following directions:

a) The First Petitioner Company/Transferor Company shall be dissolved without winding up.

b) While approving the Scheme, we clarify that this Order should not, in any way, be construed as an Order granting exemption from payment of stamp duty, taxes or other charges, if any, and payment in accordance with law or in respect of any permission or compliance with other requirements which may be specifically required under any law.

c) All the employees of the Transferor Company in service, on the date immediately preceding the date on which the Scheme takes effect i.e. the Effective Date, shall become the employees of the Transferee Company on such date, without any break or interruption in service and upon terms and conditions not less favourable than those subsisting in the concerned Transferor Company on the said date.

d) Any proceedings now pending by or against the Transferor Company be continued by or against the Transferee Company.

e) All the properties, rights, liabilities, duties and powers of the Transferor Company, be transferred without further act or deed, to the Transferee Company and accordingly the same shall, pursuant to Section 232 of the Companies Act, 2013, be transferred to and vest in the Transferee Company.

f) The Income Tax Department will be at liberty to examine the aspect of any tax payable because of this scheme and it shall be open to the income tax authorities to take necessary action as permissible under the Income Tax Law.

g) The Registrar of Companies is entitled to proceed against the Transferee Company for violation/offences committed by Transferor Company, if any.

h) The Petitioner Companies are directed to file a copy of this Order along with a copy of the Scheme of Amalgamation with the concerned Registrar of Companies, electronically, along with EForm INC-28, in addition to physical copy, within 30 days from the date of receipt of the Certified copy of the Order from the Registry.

i) Certified copy of this Order be also submitted to all statutory authorities.

j) The Petitioner Companies to lodge a copy of this Order and the Scheme duly authenticated by the Deputy Registrar or Assistant Registrar, National Company Law Tribunal, Mumbai Bench, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, within 60 days from the date of receipt of the Certified copy of the Order from the Registry.

k) All authorities concerned to act on a copy of this Order along with Scheme duly authenticated by the Deputy Director or Assistant Registrar, National Company Law Tribunal, Mumbai.

26. Ordered Accordingly.