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Indokem Ltd M&A Activity 2023

Jul 15, 2023

62059_rns_2023-07-15_47f86f95-86f7-4f32-8f61-fdaf8c184d26.pdf

M&A Activity

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Indokem Limited

(CIN: L31300MH1964PLC013088)

Registered Office: “KHATAU HOUSE,” Ground Floor Mogul Lane, Mahim (West), Mumbai - 400 016.

Phone : 022-61236767 Fax : 022-61236718 E-mail : [email protected] Website: www.indokem.co.in

15[th] July 2023

To BSE Limited

Listing Department 25[th] Floor, Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai – 400 001.

Scrip Code: 504092

Dear Sir(s)/Madam(s),

  • Sub : Scheme of Amalgamation of Refnol Resins and Chemicals Limited with Indokem Limited

  • Ref: Intimation under Regulation 30(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 – Update on the Scheme of Amalgamation

We would like to inform you that Hon’ble National Company Law Tribunal, Mumbai Bench (“NCLT”) has by pronouncement made on 14[th] July 2023, sanctioned the Scheme of Amalgamation of Refnol Resins and Chemicals Limited (“ Transferor Company ”) with Indokem Limited (“ Transferee Company ”) and their respective shareholders pursuant to the provisions of Section 230-232 and other applicable provisions of the Companies Act, 2013 and rules made thereunder (“ The Scheme ”).

A copy of the Order of the NCLT sanctioning the Scheme (“ Order ”), as uploaded on the website of NCLT, is enclosed herewith for your records.

The Scheme will be effective from the date on which certified copy of the afore-mentioned sanction order of Hon’ble NCLT is filed with Registrar of Companies, Mumbai (“ ROC ”). The effective date will be communicated to the Stock Exchanges for further public dissemination as and when the sanction order is filed and the Scheme becomes effective.

You are requested to take the same on your record.

Thanking You,

Yours Faithfully

For INDOKEM LIMITED

RAJESH Digitally signed by DINKAR RAJESH DINKAR PISAL Date: 2023.07.15 PISAL 12:47:30 +05'30'

Rajesh D. Pisal Company Secretary and Compliance Officer

Encl: As Above

IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT- II

C.P.(CAA)/233/MB/2022

IN

C.A.(CAA)/191/MB/2022

In the matter of

The Companies Act, 2013 (18 of 2013)

AND

In the matter of Sections 230 to 232 of the Companies Act, 2013 and other applicable provisions of Companies Act, 2013 and rules framed thereunder

AND

In the matter of Amalgamation of Refnol Resins and Chemicals Limited (‘Refnol’ or ‘Transferor Company’) with Indokem Limited (‘Indokem’ or ‘Transferee Company’) and their respective shareholders

Indokem Limited, ) CIN: ) L31300MH1964PLC013088 ) A Public Limited Company ) incorporated under the provisions ) of Companies Act, 1956 and ) having its registered office at Plot )

IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

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No. 410/411, Khatau House, ) … Petitioner Company 1/ Mogul Lane, Mahim, Mumbai – ) Transferee Company 400016 )

Refnol Resins and Chemicals ) Limited ) CIN: ) L24200MH1980PLC023507 ) A Public Limited Company ) incorporated under the provisions ) of Companies Act, 1956 and ) having its registered office at Plot ) No. 410/411, Khatau House, ) … Petitioner Company 2/ Mogul Lane, Mahim, Mumbai – ) Transferor Company 400016 )

(Hereinafter the Petitioner Company 1 and Petitioner Company 2 are collectively referred to as “Petitioner Companies”)

Order delivered on: 14.07.2023 Coram: Hon’ble Member (Technical) Hon’ble Member (Judicial) Shri Shyam Babu Gautam Shri Kuldip Kumar Kareer Appearances: For the Petitioner Companies : Mr. Hemant Sethi, Ms. Devanshi Sethi, Ms. Tanaya Sethi i/b Hemant Sethi Co., Advocates For the Regional Director : Ms. Rupa Sutar, Authorised Representative of Regional Director, MCA (WR), Mumbai

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ORDER

Per: Kuldip Kumar Kareer, Member Judicial

  1. Heard the learned Counsel for the Petitioners and the representative of the Regional Director Western Region, Ministry of Corporate Affairs, Mumbai. No objector has come before this Tribunal to oppose the Scheme and nor has any party controverted any averments made in the Petition.

  2. The sanction of the Tribunal is sought under sections 230 to 232 and other applicable provisions of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, to the Scheme of Amalgamation of Refnol Resins and Chemicals Limited (“Refnol” or “Transferor Company”) with Indokem Limited (“Indokem” or “Transferee Company”) and their respective shareholders (‘Scheme’).

  3. The Counsel for the Petitioner Companies further submits that, the Petitioner Company 1 is primarily engaged in the business of manufacturing and dealing in dyes, sizing chemicals, auxiliaries in textile industry and electrical capacitors and the Petitioner Company 2 is primarily engaged in the business of manufacturing and marketing of resins and chemicals.

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  1. The Counsel for the Petitioner Companies submits that the proposed Amalgamation was approved unanimously by the Board of Directors of the respective Petitioner Companies on 15[th] January 2022. A certified true copy of Board Resolution of respective Petitioner Companies approving the Scheme are annexed with Company Scheme Petition. The Board of Directors of the respective Petitioner Company believe that the Scheme is in the best interests of the respective entities and their respective stakeholders including its shareholders, employees, and creditors.

  2. The Appointed Date for the Scheme of Amalgamation is 1[st] day of April 2021.

  3. The Learned Counsel appearing on behalf of the Petitioner Companies states that the joint Company Petition has been filed in consonance with the order dated 26[th] August 2022, passed by this Tribunal in the connected Company Scheme Application bearing C.A.(CAA)/191/(MB)/2022.

  4. The Learned Counsel appearing on behalf of the Petitioner Companies states that the Petitioner Companies have complied with all requirements as per directions of this Tribunal and they have filed necessary Affidavits of compliance with this Tribunal. Moreover, the Petitioner Companies undertake to comply with all the statutory requirements, if any, as may be required under the Companies

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Act, 2013 and the Rules made there under. The said undertaking is accepted by the Petitioner Companies.

  1. The Learned Counsel for the Petitioner Companies states that, by sanction of this Scheme of Amalgamation the Petitioner Companies will be able to achieve the following rationale:

  2. The Transferor Company and the Transferee Company are engaged in similar lines of business and complement each other. With an intent to expand the business and achieve larger product portfolio, economies of scale, efficiency, optimization of logistics and distribution network and other related economies by consolidating the business operations being managed by different management teams, the Board of Directors of the Transferor Company and the Transferee Company propose to consolidate the business of the Transferor Company with the Transferee Company. The proposed amalgamation of the Transferor Company with Transferee Company would inter alia have the following benefits:

    • a. Creation of a combined entity, hosting all products under the Transferee Company, thereby resulting in diversified portfolio of products, economies of scale, operational rationalization, efficiency of management and maximizing value for the shareholders.

    • b. Greater synergies between businesses and optimum use of manufacturing facilities, marketing strength, R

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  • & D facilities, Certifications resulting in productivity gains thereby maximizing value for the shareholders.

  • c. Optimum use of infrastructure and organizational efficiency by pooling of financial, managerial, and technical resources, personnel, capabilities, skills, expertise and technologies of Transferor Company and Transferee Company thereby significantly contributing to the future growth and maximizing shareholder value.

  • d. Better financial leverage, resulting in greater efficiency in cash and debt management and unfettered access to cash flow generated by the combined business, which can be deployed more efficiently, to realize higher profits for the combined entity.

  • e. Improved organizational capability and leadership, arising from the pooling of human capital, who have the diverse skills, talent and vast experience to compete successfully in an increasingly competitive industry.

  • f. Cost savings because of standardization and simplification of business processes, elimination of duplication and rationalization of administrative expenses.

  • g. Reduction in regulatory and legal compliances and avoidance of multiple records keeping.

  • h. Strengthening ability to face increasing competitive, regulatory, environmental and global risks; thereby

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resulting in sustainable and profitable long-term growth for the combined entity.

  1. The Regional Director (Western Region), Ministry of Corporate Affairs, Mumbai has filed its Report dated 13[th] January 2023, inter alia stating that, save and except the observations as stated in paragraph 2 of the report, this Tribunal may pass such order or orders as deemed fit and proper in the facts and merits of the case. The Petitioner Companies have filed an Affidavit in rejoinder to the report filed by the Regional Director with this Tribunal on 19[th] January 2022 providing clarification/undertakings to the observations made by the Regional Director. The clarifications and undertakings given by the Petitioner Companies are accepted.

  2. The observations made by the Regional Director and the clarifications/undertakings given by the Petitioner Companies are summarized in the table below:

Para RD Report / Observations
dated 13th January 2023
Response of the Petitioner
Companies
(a) In compliance of AS-14 (IND –
AS
103),
the
Petitioner
Companies shall pass such
accounting entries which are
As regards the observation
made in Paragraph 2 (a) of the
said Report it is concerned, it is
submitted that in addition to

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necessary in connection with
the scheme to comply with
other applicable Accounting
Standards such as AS – 5 (IND-
AS 8), etc.
compliance with IND AS-103
(AS-14
not
applicable),
in
connection with the Scheme,
the First Petitioner Company
being the Transferee Company
shall pass such accounting
entries which are necessary to
comply with all other applicable
Indian Accounting Standards to
the extent applicable
(b) As
per
Definition
of
the
Scheme,
“Appointed Date” means April 01,
2021 or such other date as may be
fixed or approved by Hon’ble
National Company Law Tribunal;
And
“Effective Date” means the last of
the
dates
on
which
the
authenticated copies or certified
copies of the Order of NCLT under
Section
230-232
of
the
Act
sanctioning the Scheme is filed with
Registrar of Companies by the
As regards the observation
made in Paragraph 2 (b) of this
Report is concerned , the
Petitioner Companies confirm
that the Appointed Date is 1
April 2021 as mentioned in the
Scheme which is in compliance
with Section 232(6) of the
Companies Act, 2013 and the
Scheme shall take effect from
such Appointed Date. The
Petitioner
Companies
undertakes to comply with the
requirements
clarified
vide
circular
No.7/12/2019/CL-I

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Transferor
Company
and
Transferee Company. References in
this Scheme to the date of “coming
into effect of the Scheme” or “upon
the Scheme becoming effective”, or
“effective-ness of the Scheme” and
other similar expressions mean the
Effective Date;
In this regard, it is submitted
that Section 232(6) of the
Companies Act, 2013 states that
the scheme under this section
shall
clearly
indicate
an
appointed date from which it
shall be effective and the scheme
shall be deemed to be effective
from such date and not at a date
subsequent to the appointed
date. However, this aspect may
be decided by the Hon’ble
Tribunal taking into account its
inherent powers.
The Petitioners may be asked to
comply with the requirements
dated 21.08.2019 issued by the
Ministry of Corporate Affairs.

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as clarified vide circular no. F.
No.
7/12/2019CL-I
dated
21.08.2019
issued
by
the
Ministry of Corporate Affairs
(c) Petitioner Company have to
undertake
to
comply
with
Section 232(3)(i) of Companies
Act, 2013, where the transferor
company is dissolved, the fee
and the stamp duty paid by the
transferor
company
on
its
authorized capital shall be set-
off against the fees and stamp
duty payable by the transferee
company on its authorized
capital
subsequent
to
amalgamation and therefore,
petitioners to undertake that the
transferee company shall pay
the difference of fees and stamp
duty.
As regards the observation
made in Paragraph 2 (c) of the
said Report it is concerned, the
Petitioner
Companies
undertake to comply with the
provisions set out in Section
232(3)(i) of the Companies Act,
2013 and that the fee, if any,
paid
by
the
Transferor
Company on its authorized
share capital shall be set off
against any fees payable by the
Transferee Company on its
authorized
share
capital
subsequent to the Merger, if
applicable and the Transferee
Company
shall
pay
the
difference of fees and stamp
duty, if any.
(d) The Hon’ble Tribunal may
kindly seek the undertaking that
this Scheme is ap-proved by the
As regards the observation
made in Paragraph 2(d) of the
said Report, it is concerned, the

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requisite majority of members
and creditors as per Section
230(6) of the Act in meeting
duly held in terms of Section
230(1) read with 7 subsection
(3) to (5) of Section 230 of the
Act and the Minutes thereof are
duly
placed
be-fore
the
Tribunal.
Petitioner
Companies
undertakes
that Scheme
is
approved
by
the
requisite
majority
of
members
and
creditors as per Section 230(6)
of the Act in meeting duly held
in terms of Section 230(1) read
with 7 subsection (3) to (5) of
Section 230 of the Act. Minutes
of
the
meeting
has
been
submitted by the Chairperson as
a part of affidavit on 17th
October 2022.
(e) The Petitioner Company states
that the Transferee Company
shall be in compliance with
provisions of Section 2(1B) of
the Income Tax Act, 1961. In
this
regards,
the
petitioner
company
shall
ensure
compliance of all the provisions
of the Income Tax Act and
Rules thereunder;
As regards the observation
made in Paragraph 2(e) of the
said Report, it is concerned, the
Petitioner
Companies
undertakes that it shall ensure
compliance of all the provisions
of the Income Tax Act and
Rules
thereunder
including
provisions of Section 2(1B) of
the Income Tax Act, 1961.
(f) It
is
observed
that
both
company are listed company
therefore, petitioner company
As regards the observation
made in Paragraph 2 (f) of the
said Report is concerned, the

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may be directed to provide copy
of prior notice served to SEBI.
Petitioner Companies submit
that notice have been duly
served upon the Securities
Exchange
Board
of
India.
Further the compliance report
proving the dispatch of the
notices has been filed with this
Tribunal.
(g) It is observed that petitioner
company
has
provided
observation letter received from
BSE
vide
letter
dated
30.05.2022, therefore, petitioner
company may be directed to
undertake that all requirements
as per the said letter has been
complied with.
As regards the observation
made in Paragraph 2 (g) of the
said Report is concerned, the
Petitioner
Companies
undertakes
that
all
the
requirements
as
per
the
observation letter received from
BSE vide letter dated 30thMay
2022 will be complied with.
(h) It is observed that the Transferor
Company have non-residential
/ foreign shareholder, therefore,
petitioner company may be
directed to place on record the
prior notice served to RBI
regarding issuing the shares to
foreign Shareholders and may
also be directed to undertake
As regards the observation
made in Paragraph 2 (h) of the
said report is concerned, it is
submitted
that
issuance
of
shares by Transferee Company
pursuant to amalgamation to
non-resident shareholders of
Transferor Company is allowed
under automatic route and no

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that all compliance with respect
to FEMA/RBI guidelines have
been complied with.
approval of RBI would be
required (Relevant extract of the
FEMA guidelines is annexed
herewith
as
Annexure
1).
Further,
the
Petitioner
Companies
undertakes
to
comply with all applicable
provisions
of
FEMA/RBI
guidelines while implementing
the scheme.
(i) That on examination of the
report of the Registrar of
Companies,
Mumbai
dated
04.01.2023
(Annexed
as
Annexure A-1) that all the
Petitioner
Companies
fall
within the jurisdiction of ROC,
Mumbai. It is submitted that no
complaint
and
/
or
representation
regarding
the
proposed
Scheme
of
Amalgamation
has
been
received against the Petitioner
Companies.
Further,
the
petitioner companies have filed
Financial Statements up to
As regards the observation
made in Paragraph 2 (i)(i) of the
said Report is concerned, it is
submitted that the observation
made by the ROC is merely
factual in nature and no further
response in required to that
extent.
As regards the observation
made in Paragraph 2 (i)(ii) of
the said Report is concerned, it
is
submitted
that
the
observation made by the ROC
is merely factual in nature and

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31.03.2022 further observations
in ROC report are as under:
i. That the ROC Mumbai in his
report dated 04.01.2023 has
stated
that
no
Inquiry,
inspection,
investigation
&
prosecution is pending against
the
subject
applicant
companies.
ii. As per MCA portal in
Transferor Company there are
charges
shown
as
“Open”
detailed as under:
31.03.2022 further observations
in ROC report are as under:
i. That the ROC Mumbai in his
report dated 04.01.2023 has
stated
that
no
Inquiry,
inspection,
investigation
&
prosecution is pending against
the
subject
applicant
companies.
ii. As per MCA portal in
Transferor Company there are
charges
shown
as
“Open”
detailed as under:
31.03.2022 further observations
in ROC report are as under:
i. That the ROC Mumbai in his
report dated 04.01.2023 has
stated
that
no
Inquiry,
inspection,
investigation
&
prosecution is pending against
the
subject
applicant
companies.
ii. As per MCA portal in
Transferor Company there are
charges
shown
as
“Open”
detailed as under:
31.03.2022 further observations
in ROC report are as under:
i. That the ROC Mumbai in his
report dated 04.01.2023 has
stated
that
no
Inquiry,
inspection,
investigation
&
prosecution is pending against
the
subject
applicant
companies.
ii. As per MCA portal in
Transferor Company there are
charges
shown
as
“Open”
detailed as under:
no further response in required
to that extent. However, it is
submitted that the status of the
following charges is closed as
per the MCA records (hereto
annexed as Annexure 2) about
has
been
erroneously
considered as open by the ROC:
no further response in required
to that extent. However, it is
submitted that the status of the
following charges is closed as
per the MCA records (hereto
annexed as Annexure 2) about
has
been
erroneously
considered as open by the ROC:
no further response in required
to that extent. However, it is
submitted that the status of the
following charges is closed as
per the MCA records (hereto
annexed as Annexure 2) about
has
been
erroneously
considered as open by the ROC:
no further response in required
to that extent. However, it is
submitted that the status of the
following charges is closed as
per the MCA records (hereto
annexed as Annexure 2) about
has
been
erroneously
considered as open by the ROC:
no further response in required
to that extent. However, it is
submitted that the status of the
following charges is closed as
per the MCA records (hereto
annexed as Annexure 2) about
has
been
erroneously
considered as open by the ROC:
Charge
ID
Date
of
Creati
on
Date of
Last
modificat
ion
Amoun
Secure
(In Rs.
d
Char
ge ID
Date
of
Creat
ion
Date of
Last
modificat
ion
Amount
Secured
1004802
05
04.09.
2021
3,000,0
00.00
90225
511
26.04
.1984
30.03.199
2
15,00,000
.00
9022551
1
26.04.
1984
30.03.199
2
1,500,0
00.00
90226
079
18.06
.1996
6,60,00,0
00.00
9022547
1
19.08.
1981
05.03.199
0
1,665,0
00.00

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C.P. (CAA) 233 (MB) 2022 IN C.A.(CAA) 191/MB/2022

9022607
9
18.06.
1996
66,000
000.00
,
90226
237
23.03
.1999
08.12.201
5
6,50,00,0
00.00
9022592
8
28.10.
1993
1,800,0
00.00
90225
920
20.08
.1993
70,00,000
.00
9022570
2
10.10.
1989
92,610
00
.
90226
062
23.03
.1996
29.07.200
6
9,65,00,0
00.00
9022623
7
23.03.
1999
08.12.201
5
65,000
000.00
,
90225
881
12.11
.1992
22.03.199
6
28,00,000
.00
9022585
2
31.03.
1992
1,000,0
00.00
10163
736
15.06
.2009
50,00,000
.00
9022592
0
20.08.
1993
7,000,0
00.00
10014
021
29.07
.2006
14.10.200
6
1,75,00,0
00.00
9022548
5
25.05.
1982
02.03.198
4
450,00
.00
0
10019
6675
26.07
.2018
8,01,800.
00
9022606
2
23.03.
1996
29.07.200
6
96,500
000.00
,
10036
9127
02.09
.2020
29,99,340
.93
9022588
1
12.11.
1992
22.03.199
6
2,800,0
00.00
1016373
6
15.06.
2009
5,000,0
00.00
1001402
1
29.07.
2006
14.10.200
6
17,500
000.00
,
9022548
4
12.05.
1982
14.05.198
3
450,00
.00
0
1004161
27
30.10.
2020
09.02.202
2
85,000
000.00
,
1001966
75
26.07.
2018
801,80
.00
0

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1003691
02.09.
2,999,3
1003691
02.09.
2,999,3
27
2020
40.93
iii. It is submitted that as per the
provisions of Section 230(3)(i) As regards the observation
of the Companies Act, 2013, made in Paragraph 2 (i)(iii) of
where the Transferor Company the said Report it is concerned,
is dissolved, the fee, if any, paid the
Petitioner
Companies
by the transferor company on its undertake to comply with the
authorized capital shall be set- provisions set out in Section
off against any fees payable by 232(3)(i) of the Companies Act,
the Transferee Company on its 2013 and that the fee, if any,
authorized capital subsequent to paid
by
the
Transferor
the amalgamation. Therefore, Company on its authorized
remaining fee, if any, after share capital shall be set off
setting-off the fees already paid against any fees payable by the
by the transferor company on its Transferee Company on its
authorized capital, must be paid authorized
share

capital
by the transferee company on subsequent to the Merger, if
the increased authorized capital applicable and the Transferee
subsequent
to
the
Company
shall
pay
the
amalgamation. difference of fees and stamp
duty, if any.
iv. Interest of the Creditors
should be protected
As regards the observation
v. May be decided on its merits. made in Paragraph 2 (i)(iv) of

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IN
C.A.(CAA) 191/MB/2022
Petitioner company may be
directed to give reply to the
above observations of ROC,
Mumbai.”
the said Report it is concerned,
the
Petitioner
Companies
undertake that the interest of the
creditors shall be duly protected
under the Scheme.
  1. The Official Liquidator has filed his report on 19[th] January 2023, inter alia stating therein that the affairs of the Transferor Company have been conducted in a proper manner. Accordingly, the Transferor Company may be ordered to be dissolved without winding up.

  2. Upon this Scheme becoming effective and upon Amalgamation of Refnol with Indokem in terms of this Scheme, Indokem shall, following such transfer and vesting of the Undertaking of Refnol into Indokem without any application or deed, issue and allot Equity shares, credited as fully paid up, to the extent indicated below, to the equity shareholders of Transferor Company whose names appear in the register of members of Transferor Company (except Transferee Company or its subsidiaries held directly or jointly with its nominee shareholders), on the Record Date or to such of their respective heirs, executors, administrators or other legal representatives or other successors in title in the following proportion viz.:

Page 17 of 19

IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

C.P. (CAA) 233 (MB) 2022 IN C.A.(CAA) 191/MB/2022

“1,153 (One Thousand One Hundred and Fifty-Three) equity shares of Indokem having face value of INR 10 each fully paid up shall be issued for every 1,000 (One Thousand) equity shares held in Refnol having face value of INR 10 each fully paid up”

  1. From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public policy.

  2. Since all the requisite statutory compliances have been fulfilled, Company Petition bearing C.P.(CAA)/233(MB)2022 filed by the Petitioner Companies are made absolute in terms of prayers clause of the said Company Scheme Petition.

  3. The Scheme of Amalgamation is hereby sanctioned, and the appointed date of the Scheme is fixed as 1[st] day of April 2021.

  4. The Petitioner Companies are directed to file a certified copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically, along with e-Form INC-28 in addition to physical copy, within 30 days from the date of receipt of order, duly certified by the Designated Registrar of this Tribunal.

  5. The Petitioner Companies to lodge a certified copy of this order and the Scheme duly authenticated by the Designated Registrar of this Tribunal, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty

Page 18 of 19

IN THE NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH, COURT-II

C.P. (CAA) 233 (MB) 2022 IN C.A.(CAA) 191/MB/2022

payable, if any, on the same within 60 days from the date of receipt of the certified copy of order.

  1. All concerned regulatory authorities to act on a copy of this Order duly certified by the Registry of this Tribunal, along with a copy of the Scheme.

Sd/-

Sd/-

SHYAM BABU GAUTAM KULDIP KUMAR KAREER (MEMBER TECHNICAL) (MEMBER JUDICIAL)

Page 19 of 19