The court upheld the proposed Scheme of Amalgamation under the Companies Act, emphasizing compliance with statutory procedures and the benefits of operational efficiencies.

ORDER

1. The present Application is for approval of a Scheme of Amalgamation of Kirti Investments Limited (KIL/The Transferor Company) with Kedia Construction Company Limited (KCCL/The Transferee Company) and their respective Shareholders and Creditors (Scheme) under Sections 230 to 232 read with Section 66 of the Companies Act, 2013 (Act) and other applicable provisions of the Act read with Companies (Compromises, Arrangements, and Amalgamation) Rules, 2016 (CCAA Rules).

2. Heard the Ld. PCA for the Applicant Companies.

3. The Ld. PCA submits that the Board of Directors of the respective Applicant Companies vide their resolution dated 21.06.2024 and 02.01.2025 have approved the Scheme. The Appointed Date is fixed on 01.04.2024.

4. The Ld. PCA for the Applicant Companies further submits that the Audit Committee and the Committee of Independent Directors of the Applicant Companies vide their resolution dated 21.06.2024 and 02.01.2025, approved Scheme between the Applicant Companies. The copy of the report of the Audit Committee and report of the Committee of the Independent Directors approving the Scheme of the Applicant Companies are annexed to the Company Scheme Application.

5. The Ld. PCA for the Applicant Companies further submits that the Scheme provides for the following:

• Reduction of face value of the equity share capital of the Transferee Company in the manner as provided in this Scheme; and • Amalgamation of the Transferor Company with the Transferee Company.

6. The Ld. PCA for the Applicant Companies also submits that the First Applicant Company is engaged in the business of providing estate agency and consultancy services and the Second Applicant Company is engaged in the business of Construction, Builders, Construction Contractors and Land Developers.

7. The Ld. PCA for the Applicant Companies submits that the respective of the Applicant Company is listed Company.

8. That the rationale of the Scheme is as under:

The Reduction of capital of the Transferee Company in the manner set out in this Scheme can provide benefits to the shareholders and stakeholders as under:

(i) The Transferee Company will represent its true and fair financial position with an efficient capital structure so that post- amalgamation capital structure is in line with the size of the business operations;

(ii) The Transferee Company will have more efficient capital structure;

(iii) Reduction in the authorized share capital of the Transferee Company to the minimum extent possible thereby optimizing the split between the paid up equity share capital and the premium on any further fund raise by the Transferee Company, if any, thereby reducing the cost of future fund raising, if any;

(iv) Reduction in the costs associated for such change in the authorized share capital which would in turn benefit the shareholders, especially the public shareholders at large;

(v) The proposed reduction of equity share capital would not have any impact on the shareholding pattern of the Transferee Company except on account on amalgamation of the Transferor Company with the Transferee Company; and (vi) It does not involve any financial outlay and therefore, would not affect the ability or liquidity of the Transferee Company to meet its obligations or commitments in the normal course of business. Further, it would also not in any way adversely affect the ordinary operations of the Transferee Company.

As a part of the overall restructuring exercise, it is desired to merge the Transferor Company with the Transferee Company. The amalgamation would have the following benefits:

(i) Enhancement of