Sree Valmiki Education Management Pvt Ltd Vs

Telaprolu Rajani, Member (Judicial)

The present Company Application is filed under Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 seeking' permission to dispense with the meetings of the Equity Shareholders, Secured and Unsecured Creditors of the Transferor Company for consideration of the Scheme of Merger by Absorption (the Scheme for short) between the Transferor Company and Transferee Company.

M/s.Sree Valmiki Education Management Private Limited, ("Transferor Company") was incorporated under the name and style of M/s.Sree Valmiki Infrastructures Private Limited on 25.05.2005 with registered office of the Company at Timmaraju Street, Srinagar Colony, Vijayawada, Andhra Pradesh. The Transferor Company changed its name to M/s.Sree Valmiki Education Management Private Limited, after passing necessary resolution in terms of Section 13. A fresh Certificate was issued by the Registrar of Companies (RoC), Vijayawada consequent to the change of name on 21.05.2021. The Registered Office of the Transferor Company is situated in the State of Andhra Pradesh.

The Transferor Company is engaged in the business of providing all products and services, for curricular, co-curricular or extra¬curricular activities, including management, advisory, administration, monitoring supervisory, consulting, technology, education management, to all education institutions i.e., schools, colleges, training institutions, etc.

M/s.Vafsity Education Management Private Limited ("Transferee Company") is a Private Limited Company incorporated in the name and style of M/s.Anumati Properties Private Limited on 28.12.2010. The Transferee Company changed its name to Varsity Education Management Private Limited after passing necessary resolution in terms of Section 21 of the Companies Act, 2013 and obtained the permission of the Central Government, etc. for the change of name. A fresh certificate was issued by the RoC, subsequent to the change of name on 27.03.2011. The registered office of the Transferee Company is situated in Mumbai, Maharastra. The Transferee Company is engaged in the business of providing services in India and anywhere else in the world, all products and services, like that of Transferor Company.

The Proposed integration, consideration and amalgamation of the Transferor Company with the Transferee Company is due to the following benefits:

a.  The Transferor Company currently provides infrastructure facilities and academic services to the Transferee Company. The Amalgamation will bring in resources into the Transferee Company to complement its existing capabilities;

b.  The Transferor Company current business profile and available freehold land will enable the Transferee Company to achieve completeness of output academic services;

c. The Transferor Company's existing business and assets will harmonically blend with Transferee Company's academic services delivery;

d.  The Amalgamation will reduce administrative costs and avoid duplication of costs and would enable the Transferee Company to affect internal economies and optimise profitability;

e. Amalgamation would improve cash management and provide access to increased cash flow generated by the combined business which will enable the Transferee Company to fund business opportunities thereby growing into a larger and stronger entity;

f. The Amalgamation will result in creation of a single larger unified entity in place of separate entities, resulting in increased profitability and efficient synergies of operations;

g. The Amalgamation would result into simplification of shareholding structure of Transferee Company and reduction of shareholding tiers of Transferee Company.

The Scheme of Amalgamation is also presented in detail in the . application with the definitions and share capital. The authorised share capital of the Transferor Company is 2,50,000 equity shares of Rs.10/- each and the issued, subscribed and fully paid-up capital is 10,000 equity shares of Rs.10/- each. The Authorised share capital of the Transferee Company is 30,120,000 equity shares of Rs.5/- each and Issued, subscribed and paid-up share . capital is 22,399,412 equity shares of Rs.5/- each. Subsequent on 31.03.2021,  there is no change in the authorised, issued, subscribed and paid-up capital of the Transferor Company and • Transferee Company. Out of the total issued and paid-up equity share capital of the Transferee Company, the Transferor Company holds 62,17,410 equity shares of Rs.5/- each representing 27.76% of the total paid-up equity share capital of the Transferee Company.

All the permanent employees of the Transferor Company who are ' in its employment as on the effective date shall become the permanent employees of the Transferee Company with effect from the effective date without any break or interruption in service and on terms and conditions as to employment and remuneration not less favourable than those on which they are engaged or employed by the Transferor Company.

The Board of Directors of the Transferor Company and Transferee Company has at its meeting held on 19.08.2021, passed a resolution approving the scheme. The said Board Resolutions are annexed to the Application. The Board of Directors of both the Transferor Company and Transferee . Company also gave report on fair share exchange ratio dated 18.08.2021.

All the unsecured creditors of the Transferor Company have given their unconditional consents to the scheme by way of separate consent affidavits and are annexed with the Application. Similarly, the Secured Creditors of the Transferor Company have also consented to the scheme and No Objection Certificates (NoCs) given by them are annexed with the Application. There are two equity shareholders in the Transferor Company as per the shareholding pattern as on 19.08.2021 as- certified by the Chartered Accountants and Statutory Auditors of the Transferor ' Company. The said certificate is also annexed with the application. All the equity shareholders of the Transferor Company have separately given their individual consent affidavits approving the proposed scheme of arrangement, which are annexed with the Application.

The assets of the Transferee Company are sufficient to meet all the liabilities of the Transferor Company after the amalgamation. • The audited financial statements for the year ending with 31.03.2021  of both the Transferor Company and Transferee Company are filed.

The Statutory Auditors of both the Transferor Company and Transferee Company in their separate certificates dated 21.08.2021  and 25.08.2021 respectively, confirmed that the accounting treatment proposed in the scheme of Amalgamation is ' in conformity with the accounting standards prescribed under . Section- 133 of the Companies Act, 2013. Since the consent affidavits were given by the unsecured creditors and NoCs were given by the Secured Creditors of the Transferor Company, dispensation of the meetings of the creditors is sought for. So also in view of the written consent of equity shareholders of the Transferor Company the meetings of the equity shareholders of the Transferor Company is sought to be dispensed with.

Hence, in view of the above mentioned documents, the meeting of the equity shareholders of the Transferor Company for the purpose of considering the proposed scheme of Amalgamation is dispensed with. Considering the affidavits given by the Unsecured Creditors of the Transferor Company, the meeting of the Unsecured Creditors is dispensed with. Considering the NOCs given by the Secured Creditors of the Transferor Company, the meeting of the Secured Creditors is dispensed with.

The Board of Directors of the Transferor Company and Transferee Company in its Board Meetings held on 19.08.2021 has approved the Scheme with appointed date as 30.06.2021, subject to the approval of its shareholders and creditors.

There are no proceedings pending under Section 210 to 227 of the Companies Act, 2013, against any of the Transferor Companies.

In compliance of sub section(5) of Section 230 of the Act and Rule 8 of the Companies (CAA) Rules, 2016, the Transferor Company shall send notice under sub section (3) of Section 230 read with Rule 6 of the Rules with a copy of the Scheme, the explanatory statement and the disclosures mentioned in Rule 6 to (a) the Central Government through the Regional Director, South Eastern Region; (b) the Registrar of Companies, Andhra Pradesh; (c) the Income Tax Authorities; and (d) the Official Liquidator. The said notices be sent either by Registered Post or by Speed Post or- by Hand Delivery at the Offices of the authorities as required by sub rule (2) of Rule 8 of the Rules. The aforesaid authorities, who desire to make any representation under sub section (5) of section 230 shall send the same to this Tribunal within a period of 30 (thirty) days from the date of receipt of such notice, failing which it shall be deemed that they have no representation to make on the proposed Scheme.

With the above directions, the Company Application i.e. CA(A) Merger & Amalgamation No. 10/230/AMR/2021 is disposed of.