Zuari Industries : Scheme of Amalgamation of Zuari Sugar & Power Limited with Zuari Industries Limited

SCHEME OF AMALGAMATION

OF

ZUARI SUGAR & POWER LIMITED

(TRANSFEROR COMPANY)

WITH

ZUARI INDUSTRIES LIMITED

(FORMERLY KNOWN AS ZUARI GLOBAL LIMITED)

(TRANSFEREE COMPANY)

AND

THEIR RESPECTIVE SHAREHOLDERS AND

CREDITORS

(UNDER SECTIONS 230-232 AND OTHER

APPLICABLE PROVISIONS OF THE COMPANIES

ACT,2013)

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GENERAL

1. Preamble and Overview of the Scheme

1. This Scheme of Amalgamation (hereinafter referred to as "the Scheme" or "this Scheme") provides for the amalgamation of M/S. ZUARI SUGAR & POWER LIMITED (hereinafter referred to as "the Transferor Company" or "ZSPL") with M/S. ZUARI INDUSTRIES
   LIMITED (FORMERLY KNOWN AS ZUARI GLOBAL LIMITED) (hereinafter referred to as "the Transferee Company" or "ZIL") and their respective shareholders and creditors with effect from the Appointed Date (as defined hereinafter), pursuant to the provisions of Sections 230-232 and other relevant provisions of the Companies Act, 2013.
2. In addition, this Scheme also provide for various other matters consequential, supplemental and/or otherwise integrally connected therewith.

1. Description of Companies

1. ZSPL, the Transferor Company, is a public limited company incorporated on 27 June 2008 under the name and style of "M/S. ZUARI FINANCIAL SERVICES LIMITED" under the provisions of the Companies Act, 1956. The CIN of the company is U65100GA2008PLC007282 and its registered office is at Jai Kisaan Bhawan, Zuarinagar, Goa-403726, India. Further, the name of the company was changed to "M/S. ZUARI SUGAR & POWER LIMITED" and a fresh certificate of incorporation consequent upon change of name was issued on 06.08.2015. It

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was incorporated to carry on the business of sugar manufacture and refinery and the manufacture of any other that may be decided upon by or on behalf of the Company and the business of buyers, sellers, importers, exporters, Commission Agents and dealers of any goods or merchandise whatsoever and to transact all manufacturing or treating and preparing processes and mercantile business that may be necessary or expedient and to purchase and vend the raw material and manufactured articles and ancillary matters.

2. ZIL, the Transferee Company, was incorporated on 12 May 1967 under the provisions of the Companies Act, 1956. The equity shares of ZIL are listed on the National Stock Exchange of India

Limited (hereinafter called 'NSE') and the BSE Limited (hereinafter

called 'BSE'). The CIN of the company is L65921GA1967PLC000157 and its registered office is at Jai Kisaan Bhawan, Zuarinagar, Goa-403726, India. ZSPL is wholly owned subsidiary of ZIL. ZIL is primarily engaged in the following main businesses:

(a) To carry on agri related businesses for the manufacture of sugar, refined sugar, artificial sweeteners, pharma sugar, sugar cubes/sachets, branded sugar, fortified sugar and all value added sugar products and related products, manufacture, extraction and production of bio-diesel, seeds production, distribution, developing various hybrid strains and patenting them, commercial nurseries for cultivation of sugar cane or any other crops used for production of sugar, entail agri research and development activities and collaborations with research and development activities and collaborations with research institutions and foreign partners for the said purpose and to generally carry out all activities and business as may be needed or incidental for the manufacture of sugar and related products as permitted by law.

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1. To manufacture, trade, buy, sell, exploit or deal in all by- products and products of whatever nature derived from the process of manufacture of sugar and those arising out of the objects specified above.
2. To produce, import, export, stock or otherwise trade in Molasses, rectified spirit and alcohol (of all types and descriptions), ethanol and all other products arising out of the manufacturing process for sugar or which is germane to the said object, for sale, distribution, export and import for industrial, human or commercial use or for any other purpose.
3. To carry on the business of distillery, generation of power for captive consumption and supply, sale or export of electric power, whether by the use of bio-mass, bagasse, any other feed stock or from any other substances and to establish, own, manage and maintain power plants, power generators, electricity generating works, factories and other works and conveniences in connection therewith and to generate, use, sell, supply and distribute electricity arising out of the carrying on of the objects specified above.
4. To manufacture bio-fertilizers and bio-products of all types and descriptions which can be advantageously derived from the by products derived from the manufacture of sugar and to buy, sell, import, export or otherwise deal in the same.

In addition to above, ZIL is also engaged in the business to manufacture, produce, refine, process, formulate, mix or prepare, mine or otherwise acquire, invest in, own, hold, use, lease, mortgage, pledge, buy, sell, exchange, distribute, assign, transfer or otherwise dispose of trade, deal in and with, import and export any and all classes and kinds agricultural chemicals, fertilizers, manures, their mixtures and formulations (including but not limiting). Carry on business of contractors, erectors, construction of buildings, houses, apartments, structures etc.

II. Rationale for the Scheme

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ZSPL, the Transferor Company and ZIL, the Transferee Company are under the same management and ZIL is the holding company of ZSPL. With a view to streamline and rationalize group structure and eliminate duplicate corporate procedures, it is desirable to amalgamate ZSPL (Transferor Company) with ZIL (Transferee Company). Combining of all the activities of ZSPL with that of ZIL would be in the interest of ZSPL being its wholly owned subsidiary. By this amalgamation, duplicating facilities in accounting, purchasing, marketing, etc. will be eliminated and it would create economies in administrative and managerial costs by consolidating operations and reduce duplication of administrative responsibilities, multiplicity of records and legal and regulatory compliances. Operating inefficiencies of small concerns will be controlled by the superior management emerging from the amalgamation. The amalgamated company will be in a better position to operate than the amalgamating company individually. Both the companies have resolved to effectuate the amalgamation.

The amalgamation of the Transferor Company with the Transferee Company would inter alia have the following benefits:

1. Greater integration, greater financial strength and flexibility for the amalgamated entity, which would result in maximizing overall shareholder value and will improve the competitive position of the combined entity.
2. Improved organizational capability and leadership, arising from the pooling of resources to compete successfully in an increasingly competitive industry.
3. Strengthening of brand "Zuari" leading to a stronger market presence.
4. Greater leverage in operations planning and process optimization and enhanced flexibility.
5. Cost savings are expected to flow from more focused operational efforts, rationalization, standardization and simplification of business processes, administration, finance, accounts, legal, and other related

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