DALIP SINGH, J. - (1.) THIS is a petition filed by Shreya's India Private Limited ('the transferee Company') under Section 391 of the Companies Act, 1956 for obtaining sanction of a Scheme of arrangement and consequential advantages in terms of Sections 391 -394 of the Companies Act, 1956 for amalgamation of the transferee Company with Samrat Industries Private Limited ('the transferor company').
(2.) THE transferor Company was incorporated under the name of SMS Polymers Pvt. Ltd. on 31 -7 -1998 with the Registrar of Companies, Rajasthan, which was subsequently changed to Samrat Industries Pvt. Ltd. on 9 -7 -1999, as would be evident from the Memorandum and Articles of Association. It would have an authorized share capital of Rs. 1,50,00,000 divided into 5,00,000 equity shares of Rs. 10 each and 10,00,000 lakhs preferential shares of Rs. 10 each. The issue subscribed and paid up capital of transferor company is 5,00,000 equity shares of Rs. 10 each fully paid up and 5,00,040 preferential shares of Rs. 10 each fully paid. It is stated that the transferor Company is a private limited Company and thus, does not require certificate of commencement of business. The last accounts of the Company were reviewed up to 1 -10 -2006. The auditors of the transferor Company have not made any adverse remarks and comments and no irregularity or mismanagement of affairs was reported. The copies of the balance -sheet and profit and loss accounts of the transferor Company for the year ended on 1 -10 -2006 with the auditor's report are placed on record as Annexure -1.
(3.) THE objects which are sought to be achieved by virtue of amalgamation of the transferor Company in the transferee Company, as stated in Para 5 of the petition, are as follows: (1) The transferor Company and the transferee Company having the same kind of business whereby the transferor Company is producing the raw material for the transferee Company and hence, in order to reap the benefit of vertical backward integration of business, it is proposed to pool the resources of the transferor Company and transferee Company for the optimum growth and development of the said business and exploitation of the potential thereof the activities of both the Companies can be conveniently combined together and closely integrated. Moreover, both the companies belong to the same group of companies and are virtually in common management and control. (2) The amalgamation of both the companies will result into the formation of a larger company with larger Capital and Financial base enabling them to conduct and carry on business more economically, efficiently and profitably to a greater advantage. The registered office of the transferee Company is also situated at Jaipur, Rajasthan and if the scheme of amalgamation is sanctioned, the necessity, to have separate registered offices will be done away with. (3) The amalgamation of both the companies will result into the advantage of economies of sale, administrative conveniences, elimination of duplication of work and other benefits. (4) The merged entity shall have a stronger financial base which shall enable the transferor Company to participate more vigorously and profitably in competitive market environment and also in future diversification and growth. (5) A stronger financial base shall facilitate the merged entity in raising capital, servicing and conducting business on more favourable terms and identifying and exploiting new growth opportunities. (6) The merger shall enable the companies to nationalize and streamline their management, business and finances and will also eliminate duplication of the work. (7) The merger shall have the beneficial results for all the Companies, their shareholders, employees and all concerned. (8) After the scheme of amalgamation is sanctioned, one set of documents will have to be filed with the Registrar of Companies, therefore, the need of filing separate set of documents on behalf of the transferor Company will be done away with. ;