K. Anantha Padmanabha Swamy, Member (Judicial): Under consideration are five Company Petitions Nos. CP/98/CAA/2018, CP/99/CAA/2018, CP/100/CAA/2018, CP/101/CAA/2018 and CP/102/CAA/2018 filed by the Petitioner Companies under Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The purpose of the Company Petitions is to obtain sanction of the Scheme of Arrangement of Demerger (in short, the Scheme) by virtue of which,

a) The Demerged Undertaking 1 (Agricultural Business Undertaking 1) of Lakshmi Technology and Engineering Industries Limited hereinafter referred to as Demerged Company 1) as specified in Clause 1.6 of the Scheme of Arrangement (Demerger), shall be demerged, transferred and vested in Dhanajaya Agro Farms Private Limited hereinafter referred to as Resulting Company 1 as a going concern.

b) The Demerged Undertaking 2 (Agricultural Business Undertaking 2) of Lakshmi Cargo Company Limited (hereinafter referred to as Demerged Company 2) as specified in Clause 1.7 of the Scheme of Arrangement (Demerger) shall be demerged, transferred and vested in Chakradhara Agro Farms Private Limited (hereinafter referred to as Resulting Company 2) as a going concern.

c) The Demerged Undertaking 3 (Aerospace Business Undertaking) of the Demerged Company 1 and the Demerged Undertaking 4 (Logistic Business Undertaking) of the Demerged Company 2 shall be demerged, transferred and vested in Chakradhara Aerospace And Cargo Private Limited (hereinafter referred to as the Resulting Company 3) as a going concern.

2.The Authorised Share Capital, Issued, Subscribed 85 Paid-up share Capital of the Petitioner Companies as provided in the Scheme are as follows:

Particulars

Authorized capital

Issued, subscribed & Paid-up capital

Equity Share Capital

Secured Creditors

Unsecured creditors

Demerged Company 1

Rs. 2,00,00,000

Rs. 50,00,000

9

1

182

Demerged Company 2

Rs. 2,00,00,000

Rs. 1,00,00,000

7

1

470

Resulting Company 1

Rs. 2,00,00,000

Rs. 2,00,00,000

3

Nil

Nil

Resulting Company 2

Rs. 2,00,00,000

Rs. 2,00,00,000

3

Nil

Nil

Resulting Company 3

Rs. 2,00,00,000

Rs. 2,00,00,000

3

Nil

Nil

3.At the outset, it is necessary to know the details of the Scheme which needs determination. The Demerged Company 1 was incorporated on 01.04.1968 under the Companies Act, 1956, having its registered office at No. 34-A, Kamaraj Road, Coimbatore - 641018. The Demerged Company-1 is engaged in business of Acting as Technical consultants, Technical collaborators and financiers for setting up of textile mills and auxiliary units etc. The Demerged Company-2 was incorporated on 13.12.1991 under the Companies Act, 1956, having its registered office at Unit-5, 3rdFloor, Raja Annamalai Building, 72, Rukmani Lakshmipathi Road, Egmore, Chennai-600008. The Demerged Company-2 is engaged in the business to carry on as principles or agents the business of importers, exporters of goods or merchandise of any description or to act as custom house agents, forwarding and clearing agents etc. The Resulting Company 1 was incorporated on 21.09.2017 under the Companies Act, 2013, having its registered office at No. 34-A, Kamaraj Road, Race Course, Coimbatore-641018. Resulting Company-1 is engaged in the business to develop as agriculture land, farm-land, farm house, fruit gardening and to establish dairy, poultry farming etc. The Resulting Company-2 was incorporated on 11.08.2017 under the Companies Act, 2013, having its registered office at No. 34-A, Kamaraj Road, Race Course, Coimbatore-641018. Resulting Company-2 is engaged in the business to develop as agriculture land, farm-land, farm house, fruit gardening and to establish dairy, poultry farming etc. The Resulting Company-3 was incorporated on 11.08.2017 under the Companies Act, 2013, having its registered office at No. 34-A, Kamaraj Road, Race Course, Coimbatore-641018. The Resulting Company-3 is engaged in business to manufacture and supply aerospace products including engine, parts, structure and components for air craft, spacecrafts, helicopter etc.

5.The Learned Counsel appearing for the Petitioner Companies submitted that the Board of Directors of the Petitioner Companies had approved and adopted a Scheme of Arrangement (Demerger) between the Demerged Companies 1 and 2 and the Resulting Companies 1,2 & 3. The copy of the Board Resolutions dated 25.09.2017 are filed along with the Application.

6.This Bench vide its order dated 04.01.2018 in CA/219/CAA/CB/2017 to CA/223/CAA/CB/2017 for convening and holding of the meeting of the Equity Shareholders, Secured and Unsecured Creditors of the Demerged Companies and the Resulting Companies dispensed with. In compliance with the aforesaid order, the Demerged Company-1 and Demerged Company-2 have furnished consent affidavits from their equity shareholders as well as secured and unsecured creditors. Resulting Company 1, Resulting Company 2 and Resulting Company 3 have furnished consent affidavits from their equity shareholders. Resulting companies have furnished the certificates from the Charted Accountants stating that there are no secured and unsecured creditors.

7.The counsel for the petitioner submitted that the rationale, reasons and circumstances that have necessitated the proposed scheme are that the demerger hold good for the companies. The proposed restructuring would result in better and efficient control by the management for the segregated businesses and promote their growth. Further, it would also result in several benefits viz. Greater/enhanced focus of management in the business, ability to leverage financial and operational resources of each business, simplification of the group structure, greater administrative efficiency, organisational efficiency etc.

8.The Regional Director, Southern Region (for short, RD) in his Affidavit, submitted that as per Clauses 8, 16, 25, 34 of the Scheme of the Companies provide for the protection of the interest of the employees of the demerged undertakings.

9.The RD further submitted that as per the report of RoC, Coimbatore, the Demerged Company 1 is regular in filling the statutory returns. As for the resulting companies 1, 2 and 3, they have been incorporated in the months of August and September 2017 and hence their first statutory returns are not yet due. There is no Complaint/prosecution/inspection and investigation is pending against the Demerged Company-1 and the Resulting Companies 1, 2 and 3. As for the Demerged Company-2, RoC Chennai has reported that it is regular in filing its statutory returns. He has further reported that no prosecution filed, no complaints pending and no Inspection/investigation has been conducted in respect of the 2ndDemerged Company.

10.The RD has submitted that in clauses 20 and 29 of the scheme both the applicant companies viz., Demerged Company 2 and Resulting Company 2 and Demerged Company 3 are propose to swap the name between themselves and the companies need not again get the approval of the shareholders in the general body for change of name as it is under single window clearance. The Companies can change their name by following the procedure contemplated u/s. 13(2), (3) and (6) along with the section 15 of the companies Act 2013 and the rules framed thereunder. The RD has suggested that the companies may be directed to give an undertaking to this effect before this bench to the effect that they will follow the procedure enumerated above for change of names. In response to the said observation, the authorised signatories of the Demerged Companies and Resulting companies have deposed in an affidavit stating that the petitioner companies undertake to follow the procedure as may be applicable and required under the Provisions of the Companies Act 2013 and the rules made there under.

11.RD has further submitted that in clause 38 of the scheme, the resulting company 3 proposes to change its Authorized capital first and after the issue of shares as mentioned in the scheme proposes to reduce the subscribed, issue and paid up capital from the present Rs. 10/- per share to Rs. 1/- per share. RD has suggested that the resulting company 3 may be directed to file necessary forms with RoC, Coimbatore for enhancing the authorised capital along with the fees as required under the and also file the amended MOA and AOA with RoC, Coimbatore for their records. In this regard, the authorised signatory of the petitioner companies have deposed in an affidavit stating that the Resulting Company 3 undertake to follow the procedure as may be applicable and required under the provisions of the Companies Act 2013 and the rules made there under along with the payment of applicable fees and file the amended MOA and AOA with the registrar of Companies, Coimbatore.

12.Further perusal of the scheme shows that the accounting treatment is in conformity with the established accounting standards. In short, there is no apprehension that any of the creditors would lose or be prejudiced if the proposed scheme is sanctioned. The said Scheme of arrangement will not cast any additional burden on the stakeholders and also will not prejudicially affect the interests of any class of the creditors in any manner. The appointment date of the said Scheme is 01.04.2017.

13.There does not require any modification to the Scheme of Arrangement of demerger as same appears to be fair and reasonable, not contrary to public policy and also not violative of any provisions of law. All the compliances have been made under Sections 230 to 232 of the Companies Act 2013 r/w the Companies (Compromise, Arrangement and Amalgamation) Rules, 2016. Taking into consideration all the above, the Company petition is allowed and the scheme of arrangement of demerger annexed with the petition is hereby sanctioned which shall be binding on all the members, creditors and shareholders.

14.While approving the scheme as above, we further clarify that this order will not construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable, as per the relevant provisions of law or from any applicable permissions that may have to be obtained or, even compliances that may have to be made as per the mandate of law.

15.The petitioner companies are directed to comply with the provisions of the Companies Act 2013 and rules framed thereunder as has been suggested by the RD in its report, for change/swapping of their names and their main object clause.

16.The companies to the said scheme or other person interested shall be at liberty to apply to this Bench for any direction that may be necessary with regard to the working of the said scheme. The petitioner companies do file with the registrar of Companies the certified copy of this order within 30 days of the receipt of the order.

17.The order of sanction to this Scheme shall be prepared by the Registry as per the format provided under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 as has been notified on 14thDecember, 2016.

18.Accordingly, the subject scheme of arrangement of demerger stands sanctioned and CP/98/CAA/2018 to CP/102/CAA/2018stand disposed of.