Merger of Two Companies Approved for Integration and Growth

The proposed Scheme of Merger by absorption of Applicant Company 1 with Applicant Company 2 was approved by the Board of Directors. The merger aims to achieve integration of activities, financial strength, operational rationalization, and resource optimization. Meetings for Equity and Preference Shareholders were dispensed with due to written consents. An Equity Shareholders' Meeting is scheduled for approval. Notices and advertisements for the meeting have been arranged, and a Chairperson and Scrutinizer appointed. Quorum and voting procedures are in line with the Companies Act. Creditors' interests are safeguarded, and notices have been served to regulatory authorities for responses.

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Issues Involved:
1. Approval and Appointed Date of the Scheme of Merger.
2. Business Activities of the Applicant Companies.
3. Issuance and Allotment of Shares upon the Scheme becoming effective.
4. Rationale for the Scheme of Merger.
5. Dispensation of Meetings for Equity and Preference Shareholders of the Applicant Companies.
6. Convening and Conducting Meetings for Equity Shareholders of Applicant Company 2.
7. Notices and Advertisements for the Equity Shareholders' Meeting.
8. Appointment of Chairperson and Scrutinizer for the Equity Shareholders' Meeting.
9. Quorum and Voting Procedures for the Equity Shareholders' Meeting.
10. Treatment of Secured and Unsecured Creditors.
11. Service of Notices to Regulatory Authorities and their Responses.

Issue-wise Detailed Analysis:

1. Approval and Appointed Date of the Scheme of Merger:
The proposed Scheme of Merger by absorption of Dran-Classic Automation System Private Limited (Applicant Company 1/Transferor Company) with Dran Engineers Private Limited (Applicant Company 2/Transferee Company) was approved by the Board of Directors of both companies in their respective Board Meetings held on 1st February 2021. The Appointed Date for the Scheme of Merger by absorption is 1st April 2020.

2. Business Activities of the Applicant Companies:
Applicant Company 1 is engaged in the business of design, manufacture, and dealing in automation systems and related goods, while Applicant Company 2 is engaged in the manufacture and sale of jigs, fixtures, plastic moulds, and related engineering components.

3. Issuance and Allotment of Shares upon the Scheme becoming effective:
Upon the scheme becoming effective, the Transferee Company shall issue and allot 20 Equity Shares of the face value of Rs. 100 each for every 100 Equity Shares held by the shareholders of the Transferor Company. Additionally, 1 Preference Share of Rs. 100 each will be issued and allotted for every 1 Preference Share held by the shareholders of the Transferor Company.

4. Rationale for the Scheme of Merger:
The merger aims to achieve full integration of activities, greater financial strength and flexibility, operational rationalization, organizational efficiency, better cash flow management, elimination of inter-corporate dependencies, and optimum utilization of resources by pooling financial resources.

5. Dispensation of Meetings for Equity and Preference Shareholders of the Applicant Companies:
The meeting of the Equity Shareholders of Applicant Company 1 is not required as written consent affidavits from all shareholders have been procured. Similarly, meetings for the Preference Shareholders of both Applicant Company 1 and Applicant Company 2 are dispensed with due to written consent affidavits from all preference shareholders.

6. Convening and Conducting Meetings for Equity Shareholders of Applicant Company 2:
A meeting of the Equity Shareholders of Applicant Company 2 is to be held on 27th September 2021 at 11.00 A.M. at the Registered Office in Pune to consider and approve the proposed Scheme of Merger.

7. Notices and Advertisements for the Equity Shareholders' Meeting:
Notices of the meeting, along with a copy of the Scheme, explanatory statement, and form of proxy, shall be sent to Equity Shareholders at least one month before the meeting. Notices shall also be published in two local newspapers, "Financial Express" in English and "Loksatta" in Marathi.

8. Appointment of Chairperson and Scrutinizer for the Equity Shareholders' Meeting:
Mr. Anil Nagpure, Managing Director of Applicant Company 2, or his alternates, shall be the Chairperson of the meeting. N.G. Umranikar & Associates, Practising Company Secretary, is appointed as the Scrutinizer for the meeting.

9. Quorum and Voting Procedures for the Equity Shareholders' Meeting:
The quorum shall be as per Section 103 of the Companies Act, 2013. If the quorum is not present, the meeting shall be adjourned by half an hour, and proxies will be considered. Voting by proxy or authorized representative is permitted with the required documentation filed 48 hours before the meeting.

10. Treatment of Secured and Unsecured Creditors:
The scheme does not involve any compromise or arrangement with creditors. Secured Creditors of both Applicant Companies are being paid in the normal course of business, and their interests are not affected. Notices will be issued to Unsecured Creditors, allowing them to submit representations to the Tribunal within 30 days.

11. Service of Notices to Regulatory Authorities and their Responses:
Notices along with a copy of the Scheme shall be served to the Regional Director, Registrar of Companies, Official Liquidator, Income Tax Authorities, and Goods and Service Tax Authorities. If no response is received within 30 days, it will be presumed that these authorities have no objections to the proposed Scheme. The Applicant Companies must file an affidavit of service to report compliance with the directions regarding the issue of notices.

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