Srajan Capital Limited Vs

1. This is a joint first motion Application filed by Applicant Companies namely; Srajan Capital Limited (Transferor Company/ Applicant Company 1), Career Point Limited  (  Transferee  Company/  Applicant  Company  2/  Demerged  Company) and Career Point Edutech Limited ( Applicant Company 3/ Resulting Company) under Section 230-232 of Companies Act. 2013 (the Act) and other applicable provisions of the Act read with Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016 (the Rules); seeking sanction of the Composite Scheme of Arrangement (“Scheme”) between the Applicant Companies while also seeking appropriate directions from this Tribunal interalia under section 230-232 of the Companies Act 2013. The Scheme envisages:

a) Amalgamation of Srajan Capital Limited into Career Point Limited; and

b) demerger of the Demerged Undertaking of Career Point Limited into Career Point Edutech Limited.

2. The Applicant Companies have prayed for dispensing with the requirement for convening the meeting of the Equity Shareholders of Applicant Company 1 & 3, Preference Shareholder of Applicant Company 1, Secured and Unsecured Creditors of the Applicant Companies and also convene the meetings of Equity Shareholders of Applicant Company 2.

3. The Applicant Company 1/Transferor Company is authorized to engage in the business of providing loans, including educational loans, institutional loans, personal loans, and business loans (trade finance and term loans to regional SMEs), and Applicant Company 2 /Transferee Company is primarily engaged in the education business includes offering the diversified products and integrated services in education segments including pre-school, school education (K-12), test preparation (tutorial services), higher education (universities), e-Leaming and vocational education. The demerged company also carries on education business through its subsidiaries including CP Edutech. The Resulting Company is engaged in the business of selling Video Lectures of Physics, Chemistry, Math, and Biology in pen drives and memory cards, and books of IITJEE. The Resulting Company also developed the software for online test series and maintaining of student data and provides the software at a fixed price to educational institutions.

4. It is submitted that the registered offices of all the Applicant Companies are in Punjab, thus situated within the jurisdiction of this Tribunal.

5. The purpose and rationale of the scheme is as under:

i. Consolidation of education business - Demerger of the education business of CPL into CP Eductech which will help in the consolidation of the education business into one single entity i.e. CP Edutech.

ii. Consolidation of financial services business - The merger of SCL into CPL will achieve consolidation of the financial service business into CPL.

iii. Streamlining group structure and operations - The Scheme ensures a simplified and streamlined group structure by reducing the number of entities in the group. The Scheme ensures better synergy of operations by way of focused operational efforts, standardization & simplification of processes, and productivity improvements which will entail the following advantages:

- Improve the overall operational efficiency and effectiveness of the respective businesses;

- Reduction in the overall operational and compliance cost.

iv. Improve management control - Ensures better management control on the respective businesses. independent management of each of the education and non-education divisions will ensure the adoption of strategies necessary for the growth of respective businesses.

6. It is stated that the Board of Directors of the Applicant Companies in their meetings held on 14.02.2023 have considered and approved the Composite Scheme of Arrangement subject to sanctioning of the same by this Tribunal. The copy of the Board Resolution of the Applicant Companies 1, 2 and 3 is in Annexures D 6, E 8 and F 6, respectively, of the application. The Applicant Companies have authorized Mr. Manmohan Pareek, son of Shri Satish Kumar Pareek, aged 35 years, residing at CP Tower-1, IPIA Road No-1, Kota, Rajasthan, India, 324005, as their signatory to do all acts and deeds and things in relation to the Scheme. The affidavit of Mr. Manmohan Pareek, authorized signatory of the Applicant Companies has been filed in support of the contents of the application for seeking appropriate orders/directions.

7. The appointed date of the Scheme is 01.04.2023 as mentioned in the Part 1 (Definitions and Share Capital), under 1(b) of the Composite Scheme of Arrangement attached as Annexure-A.

8. It is stated that the Applicant Companies have filed the audited financial statements as of 31.03.2023 as well as of the limited reviewed unaudited financial statements as of 30.06.2023. The financial statements of the Transferor Company have been annexed and marked as Annexure D3 and Annexure D4 respectively. Those of the Demerged Company are annexed as Annexure E3 and Annexure E4 respectively. Those of the Resulting Company are annexed and marked as Annexure F3 and Annexure F4 respectively.

9. It is submitted that no investigation or proceedings have been instituted or are pending concerning any of the Applicant Companies under Sections 210 to 226 of the Companies Act, 2013.

10. It is pleaded that in pursuance of the proviso to Sec. 230 (7) and Section 232 (3) of the Act, the Applicant Companies 1, 2 and 3 have filed the certificates dated 15.11.2022, 14.02.2023, 11.02.2023 issued by the Respective Statutory Auditors of Applicant Companies certifying that the Scheme is in compliance with the Accounting Standards under Section 133 of the Act and the same are attached as Annexure- G, H, I of the application.

11. It is further submitted by the counsel for applicant companies that as per Valuation Report dated 14.02.2023 submitted by Mr. Naveen Agarwal, Registered Valuer bearing registration IBBI/RV/02/2019/12272 Share Exchange and Entitlement Ratio is given below:-

a. As per the Valuation Report by Mr Naveen Agarwal, the following was stated;

“As of the report date, the issued, subscribed, and paid up capital of CPL consists of 1,81,92,939 fully paid-up equity shares of INR 10/-each. We Understand from the management of CPEL, that as of the report date the issued, subscribed and paid-up capital consists of 5,78,947 equity shares of INR 10/- each.”

“We understand that in consideration of the demerger of education business understanding, the management propose to issue to the shareholders of CPL 1 Equity share of INR 10/- each fully paid up of CPEL for every 1 equity share of INR 10/- held in CPL. We consider this ratio, appropriate, and it.’

b. The Share Ratio has been provided under Clause 18.1 of the Amalgamation Plan as;

“1 equity share (face value of INR 10/- per share) of CP Edutech to be issued for every 1 equity share (face value of INR 10/~ per share) of CPL”

12. It is contended by the learned counsel that the Scheme (Annexure A) also takes care of the interests of the staff/workers and employees of the Transferor Companies. By Part 2; Amalgamation, Clause 11.1 on page no 17 of the Scheme, it is stated that upon the Scheme coming into effect, all staff and employees of the Transferor Company, if any, if service on such date shall be deemed to have become staff and employees of the Transferee Company on the basis of continuity of service and terms and conditions of their employment with the Transferee Company shall not be less favorable than those applicable to them with reference to the Transferor Company.

13. It is further submitted that Applicant Company 1 is registered as a non-deposit-taking NBFC with the Reserve Bank of India (RBI), Chandigarh, and has obtained an NoC from RBI dated 14.09.2022 already as annexed as Annexure D13. Further, on account of the Composite Scheme, Applicant Company 2 may/ will become an NBFC post effectiveness of the Scheme, and hence Applicant Company 2 undertakes to obtain NBFC registration with RBI in terms of the NOC granted to Applicant Company 1. It is stated that the activities of the Applicant Companies are not governed by any sectoral regulator and Applicant Companies 2 and 3 are not registered as an NBFC with the Reserve Bank of India.

14. The applicant companies have furnished the following documents:-

i. Proposed Composite Scheme of Arrangement between the Applicant Companies and their respective shareholders (Annexure A of the application).

ii. Certificate of Incorporation along with Memorandum and Articles of Association of Applicant Companies No. 1, 2 & 3 (Annexures D2, E2 and F2 respectively of the application).

iii. List of Equity Shareholders of Applicant Company 1, along with consent affidavits, dated 30.09.2023 (Annexure D7 of the application).

iv. List of Equity Shareholders of Applicant Company 2 (Annexure E9 of the application).

v. List of Equity Shareholders of Applicant Company 3 along with consent affidavits, dated 06.10.2023 (Annexure F7 of the application).

vi. List of Secured Creditors as of 25.08.2023 duly certified by the Statutory Auditors for the applicant companies 1, 2, and 3 (Annexures D10, E11, and F10 respectively).

vii. List of Unsecured Creditors as of 25.08.2023 duly certified by the Statutory Auditors of Applicant Companies 1, 2, and 3 (Annexures D9, E10, and F9 respectively).

viii. Certificates of Statutory Auditors to the effect that Accounting treatment proposed in the Scheme conforms with Section 133 of the Companies Act, 2013 are attached as Annexures G, H, and I for Applicant Companies 1,2 and 3 of the application.

ix. Proposed Share Entitlement Ratio, provided under the the Report on Valuation of Shares & Share Exchange Ratio of Mr Naveen Agarwal, Registered Valuer, dated 14.02.2023 attached as Annexure B of the application.

x. Audited Financial Statement as of 31.03.2023 (Annexure D3, E3, and F3 for Applicant Companies 1, 2, and 3 respectively attached in the application).

xi. It is stated that the Applicant Companies have filed the audited financial statements as of 31.03.2023 as well as of the limited reviewed unaudited financial statements as of 30.06.2023. ( Financial statements of the Applicant Companies 1, 2, and 3 have been annexed and marked as Annexure D3 and Annexure D4, Annexure E3, and Annexure E4 and as Annexure F3 and Annexure F4 respectively)

xii. Certificates of Statutory Auditors to the effect that Accounting treatment proposed in the Scheme is in conformity with Section 133 of the Companies Act, 2013 are attached as Annexure- G, H, I of the application.

15. The Transferor Company i.e. Srajan Capital Limited CIN: {CIN: U65910PB2013PLC050993 (hereinafter referred to as “SCL” or “Transferor Company” or Applicant Company 1) is a company incorporated on December 09, 2013, under the provisions of the Companies Act, 2013 having CIN- U65910PB2013PLC050993 and its registered office at Village Tangori, Mohali, Punjab140601. It is registered with the Reserve Bank of India as a non-deposit-taking Non-Banking Financial Company under Section 45 IA of the Reserve Bank of India Act, 1934 vide certificate dated July 31, 2020 [Certificate No. B06.00624].

The Certificate of Incorporation along with the Memorandum and Articles of Association is attached as Annexure D 2 of the application. The details of the Share Capital Structure of the Transferor Company as of 30.09.2023 as mentioned in the application are given below:-

16. The Transferee Company i.e. Career Point Limited (hereinafter referred to as “CPL” or “Transferee Company'' or “Demerged Company” or “Applicant Company 2") is a public limited company incorporated under the provisions of the Companies Act, 1956 having CIN; L80100PB2000PLC054497 and its registered office is at Village Tangoti, Mohali, Punjab 140601. The shares of CPL are listed on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”). The certificate of incorporation along with the Memorandum and Articles of Association is attached as Annexure E 2 of the application. The details of the Share Capital Structure of the Transferor Company as mentioned in the application is given below:-

17. The Applicant Companies have furnished the details of the Shareholders. Secured Creditors and Unsecured Creditors as follows:

* Remaining 6 nominee shareholders hold 1 share each on behalf of the main shareholder.

** Remaining 6 nominee shareholders hold 1 share each on behalf of the main shareholder.

18. Accordingly, the directions of this Bench in the present case are as under:-

I.  In relation to Applicant Company 1:

a) The meeting of the sole Equity Shareholder of Applicant Company 1 is dispensed with keeping in view the shareholding pattern, financial structure of the company, and the fact that the consent has been received by way of affidavit.

b) The meeting of the sole Preference Shareholder of Applicant Company 1 is dispensed with keeping in view the shareholding pattern, financial structure of the company, and the fact that the consent has been received by way of affidavit.

c) The meeting of the sole secured creditor of Applicant Company 1 is dispensed with keeping as the consent has been received by way of affidavit.

d) The meetings of the unsecured creditors of Applicant Company 1 are dispensed with as the consent has been received by way of affidavit.

II. In relation to Applicant Company 2:

a) The meeting of the Equity Shareholders of Applicant Company 2 be convened as prayed for on 17 February 2024 (Saturday) at 12:00 PM through video conferencing with the facility of remote e-voting, subject to notice of the meeting being issued. The quorum of the meeting of the Equity Shareholders shall be 5770 in number or 40% in value of the Equity Shareholders.

b) Since there are NIL preference shareholders in Applicant Company 2, therefore there is no scope for any meeting.

c) The meetings of the secured Creditors of Applicant Company 2 are dispensed with as the consent has been received by way of affidavits.

d) The meetings of the Unsecured Creditors of Applicant Company 2 are dispensed with as the consent 95.23% in value has been received by way of affidavits.

III. In relation to the Applicant Resulting Company:

a) The meeting of the sole Equity Shareholder of Resulting Company is dispensed with keeping in view the shareholding pattern, financial structure of the company, and the fact that the consent has been received by way of affidavits.

b) Since there are no Preference Shareholders in the Resulting Company, therefore there is no scope for any meeting.

c) Since there are no Secured and Unsecured Creditors in the Resulting Company, therefore there is no scope for any meeting.

IV. In case the required quorum as noted above for the meetings is not present at the commencement of the meeting, the meeting shall be adjourned by 30 minutes and thereafter the persons present and voting shall be deemed to constitute the quorum.

V. Mr Sunil K.S Panwar, Address: H. No. 508, Sector 6, Panchkula, Haryana, Mobile No.+919417184888, email id: spadv36@gmail.com, is appointed as the Chairperson for the meetings to be called under this order. An amount of ₹1,50,000/- (Rupees One Lakh Fifty Thousand Only) be paid for his services as the Chairperson.

VI. Mr Aditya Mehtani, Address: House No. 8 Sector 11A, Chandigarh, Mobile No. +919779340366, email: a.mehtani07@gmail.com is appointed as the Alternate Chairperson for the meetings to be called under this order. An amount of ₹1,00,000/- (Rupees One Lakh Only) be paid for her services as the Alternate Chairperson.

VII. Ms Shivani Goel, address: SCO 1106-07, Sector 22-B, Himalaya Marg, Chandigarh, Mobile No. +917888529756, email id: pcs.shivani@gmail.com, is appointed as the Scrutinizer for the above meetings to be called under this order. An amount of ₹1,00,000/- (Rupees One Lakh Only) be paid for his services as the Scrutinizer.

VIII. The fee of the Chairperson, Alternate Chairperson, and Scrutinizer and other out-of-pocket expenses for them shall be borne by the Applicant Company 2.

IX. It is further directed that along with the notices, Applicant Company 2 shall also send, statements explaining the effect of the scheme on the creditors, key managerial personnel, promoters, and non-promoter members, etc. along with the effect of the scheme on any material interests of the Directors of the Company or the debenture trustees if any, as provided under sub-section (3) of Section 230 of the Act.

X. That the Applicant Company 2 shall publish an advertisement with a gap of at least 30 clear days before the aforesaid meeting, indicating the day, date and place, and the time of the meeting as aforesaid, to be published in “Business Standard” (English) and “Business Standard” (Hindi), both in All India Edition. The publication shall also indicate that the explanatory statement required to be furnished under Sections 230 & 232 read with Section 102 of the Companies Act, 2019 can be obtained free of charge at the registered office of the Applicant Companies. The Applicant Company 2 shall also publish the notice on its website, if any.

XI. Voting shall be allowed on the “Scheme” through electronic means which will remain open for a period as mandated under Clause 8.3 of Secretarial Standards on General Meetings to the Applicant Companies under the Act and the Rules framed thereunder.

XII. The Scrutinizer’s report will contain his/her findings on compliance to the directions given in Para VIII to XI above.

XIII. The Chairperson shall be responsible for reporting the result of the meeting to the Tribunal in Form No. CAA-4, as per Rule 14 of the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016 within 7 (seven) days of the conclusion of the meeting. The Chairperson would be fully assisted by the authorized representative/Company Secretary of the Applicant Companies and the Alternate Chairperson. The Scrutinizer will assist the Hon’ble Chairperson and Alternate Chairperson in preparing and finalizing the report.

XIV. The Applicant Company 2 shall individually and in compliance of sub-Section (5) of Section 230 of the Act and Rule 8 of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 send notices in Form No. CAA-3 along with copy of the Scheme, Explanatory Statement and the disclosures mentioned in Rule 6 of the “Rules” to (i) Central Government through the Regional Director (Northern Region), Ministry of Corporate Affairs, New Delhi; (ii) Jurisdictional Registrar of Companies; (iii) Official Liquidator (iv) National Stock Exchange (NSE) (v) Bombay Stock Exchange (BSE) (vi) Securities Exchange Board of India (SEBI) (vii) Reserve Bank of India (RBI) (viii) Income Tax Department through the Nodal Officer – Principal Commissioner of Income Tax, NWR, Aayakar Bhawan, Sector 17-E, Chandigarh by mentioning the PAN number of the Applicant Companies; and to such other Sectoral Regulator(s) governing the business of the Applicant Companies, if any, stating that report on the same, if any, shall be sent to this Tribunal within 30 days from the date of receipt of such notice and copy of such report shall be simultaneously sent to the applicant companies, failing which it shall be presumed that they have no objection to the proposed Scheme.

XV. The Applicant Companies shall furnish a copy of the Scheme free of charge within one day of any requisition for the Scheme made by any creditor or member/shareholder entitled to attend the meeting as aforesaid.

XVI. The authorized representative of the Applicant Company 2 shall furnish an affidavit of service of notice of meeting and publication of advertisement and compliance of all directions contained herein at least a week before the proposed meeting.

XVII. All the aforesaid directions are to be complied with strictly in accordance with the applicable laws including forms and formats contained in the Rules as well as the provisions of the Companies Act, 2013 by the Applicant Companies.

19. With the aforesaid directions, this First Motion Application stands disposed of. A copy of this order be supplied to the learned counsel for the Applicant Companies who in turn shall supply a copy of the same to the Chairperson, Alternate Chairperson, and the Scrutinizer immediately.