The court approved a composite scheme of arrangement for multiple companies under the Companies Act, ensuring compliance with statutory requirements and stakeholder consent.

ORDER

1. The sanction of the Tribunal is sought under Sections 232 r/w Section 230 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the rules framed there under for the Composite Scheme of Arrangement of Belvedore International Limited (Transferor/Applicant Company No.1), Kanvas Concepts Private Limited, (Transferor/Applicant Company No.2), Kurlon Retail Limited (Transferor /Applicant Company No.3), Komfort Universe Products And Services Limited (Transferor /Applicant Company No.4), Starship Value Chain and Manufacturing Private Limited (Transferor/Applicant Company No.5), With Kurlon Enterprise Limited (Transferee/Amalgamating /Applicant Company No.6) With and into Sheela Foam Limited (Amalgamated/Applicant Company No.7).

2. The Board of Directors of the Transferor/Applicant Companies in its respective meetings held on 28.03.2024 have approved the Composite Scheme of Arrangement. The Appointed Date fixed under the Scheme is October 20, 2023, or any such date approved by this Tribunal or any other Appropriate Authority or any other competent authority.

3. The rationale for the proposed Scheme :-

The Amalgamating Company, along with Transferor Companies, has been the second largest mattress manufacturer, with leadership position in southern and eastern parts of the country, apart from sizeable presence in other parts. Also, the Amalgamating Company is approximately 70-year-old company with a very strong brand.

The Board of Directors of the Amalgamated Company in its meeting held on July 17, 2023, had approved the acquisition of the Amalgamating Company, along with Transferor Companies, with a view to further strengthen the leadership position in the mattress and foam segments across the country.

The intent of acquisition of the Amalgamating Company, alongwith Transferor Companies was always to run all the companies, as one-operation going forward i.e. subsequently amalgamate the companies into a single entity.

Further, the amalgamation of the transferor companies with the transferee company would inter alia also have the following benefits:

i. Procurement synergies arising on account of higher volume discounts, and ability to negotiate best possible prices;

ii. Deeper manufacturing footprint, as materials of both the business can be made in any plant location, resulting in enhanced efficiency as well as reduction in servicing time;

iii. Rationalization of logistic costs considering the combined volume;

iv. Open-up the door for a new sales channel strategy, enhancing penetration/coverage and leading to better sales;

v. Structured, sharper and better management focusing on holistic growth of the businesses;

vi. Optimum and efficient utilization of resources and sharing of ancillary facilities;

vii. Common governance structure and effective management of compliances;

viii. Enhancing shareholder value and leveraging on synergies in doing the business; and

ix. Cost saving by way of reduction of overheads, administrative, managerial and other expenditure and to bring about operational rationalization and efficiency.

x. Given the above, and similarity in nature of businesses of the Transferor Companies, the Amalgamating Company and the Amalgamated Company, it is proposed to merge the Transferor Companies with Amalgamating Company (pursuant to Part C of the Scheme) and (post Part C comes into effect) merge the Amalgamating company with Amalgamated Company (pursuant to Part D of the Scheme). The merger shall result in greater business synergies and reduced administrative and other costs.

4. The Applicant Com