Ministry of Corporate Affairs has issued a circular dated 21st August 2019, clarifying the important of section 232(6) of the Companies Act, 2013, which deals with the requirement of indicating an “appointed date” in the scheme of mergers and amalgamations.
MCA received several queries with respect to interpretation of the provision of section 232(6) of the Companies Act, 2013 on whether it is mandatory to indicate a specific calendar date as ‘appointed date’ in the schemes.
Section 232(6) of the Act states that the scheme shall be deemed to be effective from the ‘appointed date’ and not a date subsequent to the ‘appointed date’. This is an enabling provision to allow the companies to decide and agree upon an ‘appointed date’ from which the scheme shall come into force.
The circular clarifies that Appointed date’ may be a specific calendar date or event based.
Where the ‘appointed date’ is chosen as a specific calendar date, it may precede the date of filing of the application for scheme in NCLT. In case the ‘appointed date’ is chosen beyond 1 year preceding from the date of filing of Scheme, justification for the same will be given in the scheme and it should not be against public interest.
The ‘appointed date’ can be dependent on occurrence of an event such as grant of license by a competent authority or fulfilment of any pre-conditions or meeting any other requirement as agreed upon between the parties. If such date is falling subsequent to the date of filing the order with the Registrar under section 232(5), the company shall file an intimation of the same with the Registrar within 30 days of such scheme coming into force.
The circular further clarifies that the term “appointed date” used in section 232(6) shall be deemed to be the “acquisition date” for the purpose of conforming to Ind-AS 103 standard dealing with business combinations.
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