CP NO.22 OF 2008 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. DATE OF DECISION: 22.8.2008 In the matter of: SCHEME OF ARRANGEMENT/AMALGAMATION OF TROPICANA BEVERAGES COMPANY ...TRANSFEROR COMPANY WITH PEPSICO INDIA HOLDINGS PVT. LTD. ...TRANSFEREE COMPANY CORAM HON'BLE MR.JUSTICE PERMOD KOHLI PRESENT: Mr.Rohit Khanna, Advocate for the petitioner Mr.DP Ojha, Official Liquidator Permod Kohli, J. This is a second motion petition filed under Sections 391 to 394 of the Companies Act, 1956 for sanction of the Scheme of Amalgamation between Tropicana Beverages Company (hereinafter referred to as the “Transferor Company”) and M/s PepsiCo India Holdings Pvt. Ltd. (hereinafter referred to as “the Transferee CP NO.22 OF 2008 2 Company”). Transferor Company-Tropicana Beverages Company was incorporated on 18.3.1994 as a Private Company with Unlimited liability with the Registrar of Companies, NCT, Delhi & Haryana at New Delhi. The registered office of the Transferor Company is situated at 3B DLF Corporate Park, `S' Block, Qutab Enclave, Phase III, Gurgaon- 122 002 (Haryana). The objects for which the Transferor Company was established are set out in its Memorandum and Articles of Association which is placed on record as Annexure P-2. The main objects are to manufacture, process, produce, make, package, bottle, import, buy, sell, supply, stock, distribute, trade and carry on business in and deal in all types of foods, beverages etc. The authorized share capital of the Transferor Company as on 31.3.2007 as per audited balance sheet is Rs.100,000,000/- divided into 10,000,000 equity shares of Rs.10/- each. Its issued, subscribed and paid up share capital is Rs.9,00,000/- divided into 90,000 equity shares of Rs.10/- each. The Transferor Company is a wholly owned subsidiary of the Transferee Company and the entire share capital of the Transferor Company is held by the Transferee Company. Transferee Company-Pepsico India Holdings Private Limited was incorporated on 28.1.1994 with the Registrar of the Companies, NCT, Delhi & Haryana at New Delhi. Registered Office of the Transferee Company is situated at 3B, DLF Corporate Park, “S” Block Qutab Enclave, Phase-III, Gurgaon 122 002 (Haryana). The objects for which the Transferee Company was established are set out in its Memorandum and Articles of Association which is placed on record as Annexure P-1. CP NO.22 OF 2008 3 The main objects of the Transferee Company are to manufacture, process, produce, make, package, bottle, import, buy, sell, supply, stock, distribute, trade in and carry on business in and deal in all types of foods and beverages products etc. The authorized share capital of the Transferee Company as on 31.3.2007 as per audited balance sheet is Rs.2500,00,00,000/- divided into 250,00,00,000 equity shares of Rs.10/- each. Its issued, subscribed and paid up share capital is Rs.1126,25,37240/- divided into 112,62,53,724 equity shares of Rs.10/- each. The Transferee Company is a private limited company and the Transferor Company is a wholly owned subsidiary of the Transferee Company. It is stated that the Scheme of Amalgamation has been approved by the Board of Directors of the Transferor and Transferee Companies in their Board meetings held on 27.6.2007 and 29.6.2007, respectively. It is also stated that the Transferee Company is a private limited company and the Transferor Company is a private company with unlimited liability and the shares of the Transferor and Transferee Companies are not listed on any stock exchange. It is stated that the Transferor and Transferee Companies had filed CP No.6 of 2008 under Section 391 of the Companies before this Court. Vide order dated 18.1.2008, this Court dispensed with the holding of the meetings of shareholders, secured and unsecured creditors of the Transferor Company and Transferee Company and directed the Companies to file petitions under Section 391 (2) and Section 394 of the Companies Act for sanction of the Scheme of Amalgamation/merger without convening the meetings of the shareholders and all classes of creditors. Copy of the CP NO.22 OF 2008 4 order dated 18.1.2008 is placed on record as Annexure P-19. On presentation of this petition, notice was directed to be served on Regional Director, Northern Region, Ministry of Company Affairs, Noida and the Official Liquidator attached to this Court. Notice was also directed to be published in the Tribune (Haryana edition), Dainik Bhaskar (Haryana edition) and Official Gazette of Government of Haryana. Affidavit of publication has been filed. Regional Director (Northern Region) has filed his affidavit and the Official Liquidator has also filed his report. In the affidavit filed by the Regional Director, two objections raised are that the petitioner Company has not complied with the Accounting Treatment as prescribed under Accounting Standard 14. The other objection raised is that it is not clear as to whether Board of Directors of both the Transferor and Transferee Companies have passed necessary resolutions extending the period for sanctioning the proposed Scheme of Amalgamation from 31.3.2008 till such period, the same is approved by the Court and also it is not clear whether both the Transferor and Transferee Companies have moved any application before this Court to make amendment in para 20 of the Scheme of Amalgamation. The Official Liquidator in his report has submitted that the affairs of the transferor company have not been conducted in a manner prejudicial to the interest of its members or to public interest. In reply to the objections raised by the Regional Director, the petitioner Companies filed affidavit. In the affidavit, the petitioner Company undertook to comply with the provisions of Accounting Standard-14 upon the sanctioning of the Scheme of CP NO.22 OF 2008 5 Amalgamation/Arrangement by this Court. With regard to the other objection raised by the Regional Director, it is stated that the Transferor Company vide resolution dated 27.3.2008 has extended the date of sanctioning of the present Scheme vide Annexure A. It has also been stated that since the directors of the Transferor Company vide the aforesaid board resolution have extended the date of sanctioning of the Scheme, hence there is no requirement for amending the para no.20 of the said Scheme. From the amalgamation scheme, it appears that both transferor Company and Transferee Company are engaged in the same line of business and the merger of both the Companies would bring synergy of operation and improve the business prospects, besides reduction of costs through the process of amalgamation, Financial resources of the amalgamated company would be further consolidated and place it in a strong financial position. It would also integrate the management activities and resultantly reduce the over all administrative costs. The Scheme also provides for the transfer of all the employees of the transferor company to the transferee company, without interrupting their services and reducing emoluments in any manner. It has also been stated that there are no proceedings or investigations pending against the companies under Sections 235 to 251 of the Companies Act, 1956. I have carefully examined the scheme of amalgamation. I am of the opinion that amalgamation will be in the best interest of the transferor and transferee companies, their shareholders and creditors. The Scheme is also not against public interest and is fair, reasonable and practical. The Scheme also provides for issue and allotment to each CP NO.22 OF 2008 6 member of the transferor Company, shares in the transferee company, as per the Scheme which has been approved by its equity shareholders. No person has objected to the sanction of the Scheme of amalgamation after notice of the petition was published in two newspapers and official gazette of Haryana Government. I accordingly allow the petition and sanction the Scheme of Amalgamation of Tropicana Beverages Company and M/s PepsiCo India Holdings Pvt. Ltd. The transferor Company shall stand dissolved without being wound up. The Scheme shall come into operation from the effective date, on completion of necessary formalities. A notice of this order be published in the Tribune (Haryana Edition), Dainik Bhaskar (Haryana Edition) and official gazette of Haryana Government within 30 days. Any person interested shall be at liberty to approach this Court in the above matter for any directions that may be necessary. Let formal order of sanction be drawn in accordance with law. (PERMOD KOHLI) JUDGE 22.8.2008 MFK