Amrit Corp.

SCHEME OFARRANGEMENT

BETWEEN AMRIT BANASPATI COMPANY LIMITED AND ABCPAPER LIMITED AND AMRIT ENTERPRISES LIMITED AND THEIR RESPECTIVE SHAREHOLDERS PREAMBLE
MIs Amrit Banaspati Company Limited, a Company incorporated under the provisions of the Indian Companies Act VII of 1913 having its Registered Office at G.T. Road, Ghaziabad -201 009 (U.P.) is currently engaged in the following four separate and distinct businesses:
(a) Manufacturing and trading of Edible Oils including but not limited to vanaspati, refined oils, table margarine, bakery shortening and other specialty Edible Oils products and trading in commodities including but not limited to rice and salt ("Edible Oils Business");
(b) Manufacturing all kinds and classes of paper and pulp including but not limited to manufacturing of writing paper, printing paper, kraft paper, corrugating medium paper, newsprint paper, wrapping paper, cartridge paper, bank or bond paper, absorbent paper and to refine, process, retreat, recycle, manufacture, produce or otherwise deal in all kinds of by-products, waste materials and substances produced andl or recovered during the production of pulp, paper, board and other materials of the paper industry ("Paper Business");
(c) Manufacturing, processing and trading of dairy milk and milk products including but not limited to UHT milk, flavoured milk, ice-cream mix, dairy mixes, milk shake products and other dairy farm products ("Milk/Milk Products Business"); and
(d) Business of acquisition, development, sale and investments in the real estate sector and including but not limited to construction of residential plots, commercial spaces including shopping complexes, integrated townships and farm houses ("Real Estate Business").
MIs ABC Paper Limited, a Company incorporated under the provisions of the Companies Act, 1956, having its Registered Office at 1/4459, Ram Nagar, Mandoli Road, Shahdra, Delhi -110032 was incorporated to engage in the business of manufacturing all kinds and classes of paper and pulp including but not limited to manufacturing of writing paper, printing paper, kraft paper, corrugating medium paper, newsprint paper, wrapping paper, cartridge paper, bank or bond paper, absorbent paper and to refine, process, retreat, recycle, manufacture, produce or otherwise deal in all kinds of by-products, waste materials and substances produced andlor recovered during the production of pulp, paper, board and other materials of the paper industry. The Company since incorporation has not yet commenced its operations. The Company as on March 31, 2006 is a wholly owned subsidiary of Amrit Banaspati Company Limited.
MIs Amrit Enterprises Limited, a Company incorporated under the provisions of the Companies Act, 1956 having its Registered Office at Old Dhakansu Kalan, Chandigarh Road, Rajpura, Punjab -140 401 is currently engaged in the business of manufacturing and trading of Edible Oils including but not limited to vanaspati, refined oils, bakery shortening and other specialty Edible Oils products.
The Composite Scheme of Arrangement (hereinafter referred to as "Scheme") provides for de-merger of Paper Business of Amrit Banaspati Company Limited into ABC Paper Limited and de-merger of Edible Oils Business of Amrit Banaspati Company Limited into Amrit Enterprises Limited pursuant to the provisions of Section 391394 read with Section 100-103 and other applicable provisions of the Companies Act, 1956 and its Rules and! or Regulations. The Scheme also provides for Reorganization of Share Capital of Amrit Enterprises Limited and Reorganization of Share Capital of Amrit Banaspati Company Limited to achieve optimum Capital Structure for both the companies and to avoid the situation of over-capitalization with reference to their respective profitability and future growth potential.
The several businesses carried on by Amrit Banaspati Company Limited have different business dynamics and growth drivers. The nature of risk and competition involved in each of these businesses is distinct from others and consequently each business or undertaking is capable of attracting a different set of investors, strategic partners, lenders and other stakeholders. There are also differences in the manner in which each of these businesses are required to be managed. In order to lend greater focus on the operation of each of its diverse businesses and for the purpose of developing the potential for further growth and expansion of each business, Amrit Banaspati Company Limited proposes to re-organize and segregate, by way of de-merger, its diverse businesses into separate legal entities having distinct management focus. Rationale for the Proposed Scheme
a) Each of the diverse businesses of Amrit Banaspati Company Limited has tremendous growth and profitability potential and is at a stage where they require focused leadership and management attention. Hence, simultaneously with the re-organization and segregation of businesses, Amrit Banaspati Company Limited also intends to reorganize the management of various businesses and undertakings to provide focused management attention and leadership required by the businesses which are to be segregated and de-merged.
b) The de-merger of Paper Business of Amrit Banaspati Company Limited into ABC Paper Limited, a focused company engaged in Paper Business will enhance shareholders value by unveiling the profitability and future growth potential of Paper Business and by instigating clear management focus and vision statement for the Business. The de-merger will also assist Paper Business in reducing its cost of capital, rationalizing its resources and enhancing its leveraging and fund raising capability which in turn will enable the Paper Business to undertake future expansion strategies.
c) Amrit Enterprises Limited is focused company engaged in Edible Oils Business. The de-merger of Edible Oils Business of Amrit Banaspati Company Limited into Amrit Enterprises Limited will enable the two companies to consolidate their Edible Oils business operations and provide significant impetus to their growth in the form of enhanced scale of operations leading to economies of scale, increased asset base, stronger consolidated revenue and profitability, operational rationalization and optimal utilization of various resources. The consolidation due to inherent synergies, would result in improved shareholders value for both the companies.
d) The demerger proposed by this Scheme will enable investors to separately hold investments in each of the distinct businesses of Amrit Banaspati Company Limited having different investment characteristics thereby enabling them to select investments which suit their investment strategies and risk profiles.
In consideration of the above mentioned business rationale and related benefits, this Scheme between Amrit Banaspati Company Limited, ABC Paper Limited and Amrit Enterprises Limited is being proposed in accordance with the terms set out hereunder.

PART-I DEFINITION AND SHARE CAPITAL

1. Definition In this Scheme, unless inconsistent with the subject or context, the following expressions shall have the following meaning:

1.1 "ABCl" or "Transferor Company" means Amrit Banaspati Company Limited, a company incorporated under the Companies Act, 1956, having its registered office at G.T. Road, Ghaziabad -201 009 (U.P.).
1.2 "ABC Paper" or "Transferee Company No.1" means ABC Paper Limited, a company incorporated under the Companies Act, 1956, having its registered office at 1/4459, Ram Nagar, Mandoli Road, Shahdra, Delhi -110032.
1.~ "Act" means the Companies Act, 1956 and shall include any statutory modifications, re-enactment or amendments thereof for the time being in force.
1.4 "AEl" or "Transferee Company No.2" means Amrit Enterprises Limited, a company incorporated under the Companies Act, 1956, having its registered office at Old Dhakansu Kalan, Chandigarh Road, Rajpura, Punjab -140 401.
1.5 "Appointed Date" means the 1st day of April, 2006 or such other date as may be approved by the High Court of Judicature at Allahabad, High Court of Judicature at Delhi and High Court of Judicature at Chandigarh or any other appropriate authority.
1.6 "Edible Oils Undertaking" means the entire undertaking of the Edible Oils Business of ABCl and including air assets and liabilities (whether movable or immovable, tangible or intangible) of whatsoever nature of Edible Oils Business as on the Appointed Date.
Without prejudice to the generality of the above, the Edible Oils Undertaking shall include:
1.6.1 All assets and properties, patents, copyrights and other intellectual property rights, whether movable or immovable, real or personal, in possession or reversion, corporeal or incorporeal, tangible or intangible, present or contingent and including but without being limited to vehicles, fixed assets, capital work in progress, current assets, investments, reserves, provisions, funds, in respect of the Edible Oils Business, leases, licences, tenancy rights, hire purchase and lease arrangements, computers, office equipment, telephones, telexes, facsimile connecti'ons, communication facilities, equipment and installations, benefits of agreements, contracts and arrangements, powers, authorities, permits, quota rights, allotments, approvals, consents, privileges, liberties, advantages, easements and all the right, title, interest, goodwill, benefit and advantage, deposits, advances, receivables, funds, cash, bank balances, accounts and all other rights, claims and powers of whatsoever nature and wheresoever situated belonging to or in the possession of or granted in favour of or enjoyed by ABCl in connection with or pertaining to or relatable to the Edible Oils Business and all earnest money and/or deposits including security deposits paid by ABCl in connection with or relating to the Edible Oils Business.
1.6.2 All secured and unsecured debts, liabilities (including contingent liabilities), duties, undertakings and obligations of Edible Oils Business of every kind, nature and description whatsoever and howsoever arising.
For the purpose of this Scheme, it is clarified that liabilities pertaining to the Edible Oils Business shall, include:
(a) The liabilities which arise out of the activities or operations of the Edible Oils Business.
(b) Specific loans, borrowings and deposits raised, incurred and utilized solely for the activities or operation of the Edible Oils Business.
(c) Liabilities other than those referred to in Sub-Clauses (a) and (b) above, being the amounts of general or multipurpose borrowings of ABCl, allocated to the Edible Oils Business in the same proportion in which the value of the assets transferred under this Scheme bear to the total value of the assets of ABCl immediately before giving effect to this Scheme.
1.6.3 All permanent employees of ABCl employed in the Edible Oils Business as identified by the Board of Directors of ABCl, as on the Effective Date; and
1.6.4 Any question that may arise as to whether a specified asset or liability pertains to or does not pertain to the Edible Oils Business or whether it arises out of the activities or operations of the Edible Oils Business shall be decided by mutual agreement between the Board of Directors of ABCl and AEL.
1.7 "Edible Oils Brands" means all brand names or trademarks pertaining to the Edible Oils Business of ABCl and owned or used by ABCl as on the Appointed Date whether by reason of registration under the Trade Mark Act, 1999 or by reason of continuous use by ABCl for a considerable period of time excluding "Gagan" (registered under the Trade and Merchandise Marks Act, 1958 with the Trade Mark Registrar, Mumbai, bearing Trade Mark No. 301001 dated 26.11.1974) in all its forms and usages and including more specifically the following:
1) "Amrit" (registered under the Trade & Merchandise Marks Act, 1958 with the Trade Mark Registrar, Mumbai, bearing Trade Mark No. 357628 dated 19.01.1980)
2) "Merrigold" (registered under the Trade Marks Act, 1999 with the Trade Mark Registrar, Mumbai, bearing Trade Mark No. 551189/29 dated 16.05.1991)
3) "Ginni" (registered under the Trade and Merchandise Marks Act, 1958 with the Trade Mark Registrar, Mumbai, bearing Trade Mark No. 307531 dated 08.08.1975)
4) "Sunehri Teer" (registered under the Trade Marks Act, 1999 with the Trade Mark Registrar, Mumbai, bearing Trade Mark No. 514081 dated 28.07.1989)
5) "Bansari" (registered under the Trade Marks Act, 1999 with the Trade Mark Registrar, Mumbai, bearing Trade Mark No. 1191796 dated 16.04.2003)
1.8 "Effective Date" means the date on which certified copies of the Orders of the High Court of Judicature at Allahabad, High Court of Judicature at Delhi and High Court of Judicature at Chandigarh or any other
--------appropriate authority under Sections 391 to 394 of the Act sanctioning the Scheme are 'filed with the relevant Registrar of Companies by the De-merged Company and each of the Transferee Companies.
1.9 "High Court" means the High Court of Judicature at Allahabad, High Court of Judicature at Delhi and High Court of Judicature at Chandigarh and such other High Court having jurisdiction in the matter.
1.10 "Paper Undertaking" means the entire undertaking of the Paper Business of ABCl and including all assets and liabilities (whether movable or immovable, tangible or intangible) of whatsoever nature of Paper Business as on the Appointed Date.
Without prejudice to the generality of the above, the Paper Undertaking shall include:
1.10.1 All assets and properties, patents, copyrights and other intellectual property rights, whether movable or immovable, real or personal, in possession or reversion, corporeal or incorporeal, tangible or intangible, present or contingent and including but without being limited to vehicles, fixed assets, capital work in progress, current assets, investments, reserves, provisions, funds, in respect of the Paper Business, leases, licences, tenancy rights, hire purchase and lease arrangements, computers, office equipment, telephones, telexes, facsimile connections, communication facilities. equipment and installations, benefits of agreements, contracts and arrangements, powers, authorities, permits, quota rights, allotments, approvals, consents, privileges, liberties, advantages, easements and all the right, title, interest, goodwill, benefit and advantage, deposits, advances, receivables, funds, cash, bank balances, accounts and all other rights, claims and powers of whatsoever nature and wheresoever situated belonging to or in the possession of or granted in favour of or enjoyed by ABCl in connection with or pertaining to or relatable to the Paper Business and all earnest money and/or deposits including security deposits paid by ABCl in connection with or relating to the Paper Business.
1.10.2 All secured and unsecured debts, liabilities (including contingent liabilities), duties, undertakings and obligations of Paper Business of every kind, nature and description whatsoever and howsoever arising.
For the purpose of this Scheme, it is clarified that liabilities pertaining to the Paper Business shall, include:
(d)The liabilities which arise out of the activities or operations of the Paper Business.
(e)Specific loans, borrowings and deposits raised, incurred and utilized solely for the activities or operation of the Paper Business.
(f)Liabilities other than those referred to in Sub-Clauses (a) and (b) above, being the amounts of general or multipurpose borrowings of ABCl, allocated to the Paper Business in the same proportion in which the value of the assets transferred under this Scheme bear to the total value of the assets of ABCl immediately before giving effect to this Scheme.
1.10.3 All permanent employees of ABCl employed in the Paper Business as identified by the Board of Directors of ABCl, as on the Effective Date; and
1.10.4 Any question that may arise as to whether a specified asset or liability pertains to or does not pertain to the Paper Business or whether it arises out of the activities or operations of the Paper Business shall be decided by mutual agreement between the Board of Directors of ABCl and ABC Paper.
1.11 "Remaining Business" means all the business of ABCl other than the Paper Undertaking, Edible Oils Brands (excluding "Gagan") and Edible Oils Undertaking.
1.12 "Record Date" means the date to be fixed by the respective Board of Directors of ABCl, ABC Paper and AEl for the purpose of issue of Equity Shares of ABC Paper and AEl to the Equity Shareholders of ABCl and reorganization of Share Capital of ABCL.
1.13 "Record Date for Reorganization of Share Capital of AEL" means the date before the date mentioned in Clause 1.12 above and to be fixed by the Board of Directors of AEl for the purpose of reorganization of Share Capital of AEl contained in Part III of this Scheme.
1.14 "Scheme" or "the Scheme" or "this Scheme" means this Scheme of Arrangement in its present form submitted to the High Courts or any other appropriate authority or with any modification(s) made under Clause 29 of this Scheme
1.15 "Transferee Companies" means ABC Paper and AEl collectively.

2. DATE OF TAKING EFFECT AND OPERATIVE DATE

The Scheme set out herein in its present form or with any modification(s) approved or imposed or directed by the High Court or any other appropriate authority shall be operative from the Appointed Date but shall be effective from the Effective Date.

3. SHARECAPITAL

3.1 The share capital of ABC Paper as on March 31, 2006 is as under:
(Amount in Rs.) As on March 31, 2006 Authorised Capital 1,000,000 Equity Shares of Rs. 10/-each 10,000,000. 10,000,000 Issued, Subscribed and Paid-Up 169,900 Equity Shares of Rs. 10/-each 1,699,000. 1,699,000 ABC Paper is a wholly owned subsidiary of ABCL. SUbsequent to the Balance Sheet date, the Company has increased its Authorised Capital to Rs. 2000 lacs divided into 1,75,00,000 Equity Shares of Rs. 10/ -each and 25,00,000 -7% Redeemable Preference Shares of Rs. 10/-each. The Company has also issued and allotted fresh 21,30,000 Equity Shares of Rs. 10/-each for cash at par and 20,00,000 -7% Redeemable Preference Shares of Rs. 10/-each for cash at par to ABCl and consequently the Paid-up Share Capital has increased to 22,99,900 Equity Shares of Rs. 10/-each aggregating to Rs. 229.99 lacs and 20,00,000 -7% Redeemable Preference Shares of Rs. 10/-each aggregating to Rs. 200 lacs.
3.2 The share capital of AEl as on March 31, 2006 is as under:
(Amount in Rs.) As on March 31, 2006 Authorised Capital 7,000,000 Equity Shares of Rs. 10/-each 70,000,000 70,000,000 Issued, Subscribed and Paid-up 5,019,400 Equity Shares of Rs. 10/-each 50,194,000 Forteited Share Money 1,176,000. 5,1370,000 There is no change in the capital structure of AEl after March 31, 2006 till the date of this Scheme being approved by its Board of Directors.
3.3 The share capital of ABCl as on March 31, 2006 is as under:
(Amount in Rs.) As on March 31, 2006 Authorised Capital 1,000,000 -15% Redeemable Cumulative Preference Shares of Rs. 10/-each 10,000,000 4,000,000 -11% Redeemable Cumulative Preference Shares of Rs. 10/-each 40,000,000 20,000,000 -Equity Shares of Rs. 10/-each 200,000,000. 250,000,000 Issued, Subscribed and Paid up 12,852,925 Equity Shares of Rs. 10/-each 128,529,250,128,529,250 There is no change in the capital structure of ABCl after March 31, 2006 till the date of this Scheme
being approved by its Board of Directors.

PART -II DE-MERGER OF PAPER UNDERTAKING

4. VESTINGOFPAPERUNDERTAKINGINABCPAPER

4.1 With effect from the Appointed Date or such other date as may be fixed or approved by the High Courts and upon the Scheme becoming effective, the whole of the Paper Undertaking of ABCl, as defined in Clause 1.10, shall, under the provisions of Sections 391 and 394 and all other applicable provisions, if any, of the Act, and pursuant to the orders of the High Court or any other appropriate authority sanctioning the Scheme and without any further act or deed, be transferred to and vested in and/or deemed to be transferred to and vested in ABC Paper on a going concern basis.
4.2 Without prejudice to the generality of the above said clause:
4.2.1 With effect from the Appointed Date and upon the Scheme becoming effective, any statutory licences, permissions, approvals, quotas or consents to carry on the business of the Paper Undertaking of ABCl shall stand vested in or transferred to ABC Paper without any further act or deed and shall be appropriately mutated by the Statutory Authorities concerned in favour of ABC Paper. The benefit of all statutory and regulatory permissions, factory licences, environmental approvals and consents, excise and sales tax registrations or any other licences of ABCl relatable to Paper Undertaking and consents shall vest in and become available to ABC Paper pursuant to this Scheme. In so far as the various incentives, subsidies, rehabilitation Schemes, special status and other benefits or privileges enjoyed, granted by any Government body, local authority or by any other person, or availed of by ABCl pertaining to the Paper Undertaking, as the case may be, are concerned, the same shall vest with and be available to ABC Paper on the same terms and conditions.
4.2.2 In respect of all the movable assets of the Paper Undertaking of ABCl and the assets which are otherwise capable of transfer by physical delivery or endorsement and delivery, including cash on 'hand, shall be so transferred to ABC Paper and deemed to have been physically handed over by physical delivery or by endorsement and delivery, as the case may be, to ABC Paper to the end and intent that the property and benefit therein passes to ABC Paper with effect from the Appointed Date.
4.2.3 Such delivery and transfer shall be made on a date mutually agreed upon between the respective Board of Directors of ABCl and ABC Paper. However such date shall be within thirty days from the Effective Date.
4.2.4 In respect of any intangible assets of the Paper Undertaking of ABCl other than those mentioned in Clause 4.2.2 above, and those other movable assets, including actionable claims, sundry debtors, outstanding loans, advances recoverable in cash or kind or for value to be received and deposits with the Government, semi-Government, local and other authorities and bodies and customers, ABCl shall if so required by ABC Paper, and ABC Paper may, issue notices in such form as ABC Paper may deem fit and proper stating that pursuant to the High Court having sanctioned this Scheme under Section 394 of the Act, the relevant debt, loan, advance or other asset, be paid or made good or held on account of ABC Paper, as the person entitled thereto, to the end and intent that the right of ABCl to recover or realize the same stands transferred to ABC Paper and that appropriate entries should be passed in their respective books to record the aforesaid changes.
4.2.5 It is expressly clarified that upon the Scheme becoming effective all taxes payable by ABCl pertaining to Paper Undertaking from the Appointed Date onwards shall be treated as the tax liability of ABC Paper; similarly all credits for tax deduction at source on income of Paper Undertaking of ABCl; or obligation for deduction of tax at source on any payment made by or to be made by the Paper Undertaking of ABCl shall be made or deemed to have been made and duly complied with if so made by ABCl or ABC Paper. Similarly any advance tax payment required to be made by specified due dates in the tax laws shall also be deemed to have been made correctly if so made by ABCL.
4.2.6 All taxes of any nature, duties, cesses or any other like payment or deductions made by ABCl pertaining to Paper Undertaking to any statutory authorities such as income tax, sales tax, service tax etc. or any tax deduction / collection at source, relating to the period after the Appointed Date up to the Effective Date shall be deemed to have been made on account of or paid by ABC Paper and the relevant authorities shall be bound to transfer to the account of and give credit for the same to ABC Paper upon the passing of the orders on this Scheme by the High Courts upon relevant proof and documents being provided to the said authorities.
4.2.7 All cheques and other negotiable instruments, payment orders received in the name of ABCl pertaining to Paper Undertaking after the Effective Date shall be accepted by the Bankers of ABC Paper and 20 credited to the account of ABC Paper. Similarly, the Banker of ABC Paper shall honour cheques issued by ABCl pertaining to Paper Undertaking for payment after the Effective Date.
4.3 With effect from the Appointed Date, all debts, liabilities, contingent liabilities, duties and obligations of every kind, nature and description of ABCl relatable to the Paper Undertaking and as defined under Clause 1.10 shall also, under the provisions of Sections 391 and 394 of the Act, without any further act or deed, be transferred to or be deemed to be transferred to ABC Paper so as to become as from the Appointed Date the debts, liabilities, contingent liabilities, duties and obligations of ABC Paper and it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of which such debts, liabilities, contingent liabilities, duties and obligations have arisen in order to give effect to the provisions of this sub-clause.

5. ISSUANCE OF EQUITY SHARES IN ABC PAPER

5.1 Upon this Scheme becoming operative and in consideration of the de-merger and vesting of the Paper Undertaking of ABCl in ABC Paper, ABC Paper shall, 'without any further application or deed, issue and allot to the equity shareholders of ABCl and whose names appear in the Register of Members of ABCl as on the Record Date, his/her heirs, executors, administrators or the successors-in-title, as the case may be, two (2) Equity Shares of the face value of Rs. 10/-(Rupees Ten) each credited as fully paid-up, for every four (4) EqUity Shares of the face value of Rs. 10/-(Rupees Ten) each of ABCL.
5.2 The Equity Shares to be issued and allotted in terms hereof will be subject to the Memorandum and Articles of Association of ABC Paper. The new EqUity Shares shall rank pari passu in all respects including dividend with the existinq Equity Shares of ABC Paper and shall be subject to any condition that may be imposed or suggested by the Stock Exchange/s or any other competent authority.
5.3 The shareholders of ABCl, to whom equity shares are to be issued by ABC Paper pursuant to Clause5.1 above, shall be issued shares in dematerialized form. However, shareholders of ABCl shall have an option to receive the certificate(s) of shares or receive credit in their de-mat accounts. Those, who wish to receive their equity shares in dematerialized form, shall provide all details relating to their account with depository participant, to ABC Paper. In case no response is received, ABC Paper shall issue the shares in the form in which the shares were held as on the Record Date by the concerned shareholder in ABCL.
5.4 ABC Paper shall, if and to the extent required, apply for and obtain any approvals from concerned regulatory authorities for the issue and allotment by ABC Paper of equity shares to the members of ABCl under the Scheme.
5.5 The Equity Shares to be issued by ABC Paper shall, subject to the execution of the listing agreement and payment of the appropriate fee, be listed on the Mumbai and Uttar Pradesh Stock Exchanges, in pursuance of Clause 8.3.5 of SEBI (Disclosure & Investor Protection Guidelines), 2000.
5.6 The Board of Directors of ABC Paper shall consolidate all fractional entitlements, if any, arising out of the aforesaid exchange process and allot Equity Shares in lieu thereof to a director or an officer of ABC Paper or such other person as the Board of Directors of ABC Paper and ABCl shall jointly appoint in this behalf who shall hold the Equity Shares in trust on behalf of the members entitled to fractional entitlements with the express understanding that such director(s) or officer(s) or person(s) shall sell the same in the market at such time or times and at such price or prices and to such person or persons, as it/he/they may deem fit, and pay to ABC Paper, the net sale proceeds thereof, whereupon ABC Paper shall distribute such net sale proceeds subject to taxes, if any, to the members in proportion to their respective fractional entitlements.
5.7 The approval of this Scheme by the shareholders of AEl shall be deemed to be due compliance of the provisions of Section 81 (1A) and other relevant and applicable provisions of the Act for the issue and allotment of Equity Shares by AEl to the shareholders of ABCl, as provided in this Scheme.

6. ACCOUNTING TREATMENT IN THE BOOKS OF ABC PAPER

6.1 Upon the Scheme becoming effective and with effect from the Appointed Date, ABC Paper shall record the assets and liabilities of the Paper Undertaking of ABCl vested in it pursuant to this Scheme, at their respective book values as appearing in the books of ABCl, at the close of business of the day immediately preceding the Appointed Date.
6.2 ABC Paper shall credit the aggregate face value of the new equity shares issued by it to the shareholders of ABCl pursuant to this Scheme to the Share Capital Account in its books of accounts.2'
6.3The difference, between the amount credited by ABC Paper to the Share Capital Account, as per Clause
6.2 above and the Net Assets of the Paper Undertaking of ABCl as per Clause 6.1 above, shall be debited / credited by ABC Paper to the General Reserve Account.

7. BUSINESSANDPROPERTY INTRUSTFORABC PAPER

7.1 During the period between the Appointed Date and the Effective Date:
(a) ABCl shall carry on and be deemed to have carried on its business and activities in relation to the Paper Undertaking and shall stand possessed of all assets and properties of the Paper Undertaking as defined in Clause 1.10, and referred to in Clause 4 above, in trust for ABC Paper and shall account for the same to ABC Paper.
(b) Any income or profit accruing or arising to ABCl in relation to the Paper Undertaking and all costs, charges, expenses and losses incurred by ABCl in relation to the Paper Undertaking shall for all purposes be treated as the income, profits, costs, charges, expenses and losses, as the case may be, of ABC Paper.
(c) ABCl shall not utilize the profits or income, jf any, relating to the Paper Undertaking for the purpose of declaring or paying any dividend or for any other purpose in respect of the period falling on and after the Appointed Date, without the prior written consent of ABC Paper.
7.2With effect from the Appointed Date, all debts, liabilities, duties and obligations of the Paper Undertaking of ABCl as on the close of business on the date preceding the Appointed Date whether or not provided in the books of the Paper Undertaking of ABCl and all other liabilities relating to the Paper Undertaking which arises or accrues on or after the Appointed Date but which relates to the period on or upto the Appointed Date shall be deemed to be the debt, liabilities, duties and obligations of ABC Paper'.

8. CONDUCT OF BUSINESS OF PAPER UNDERTAKING

8.1 As and from the date of acceptance of this Scheme by the Board of Directors of the ABCl and the Board of Directors of ABC Paper till the Effective Date:
(a) ABCl shall carry on the business of its Paper Undertaking with reasonable diligence and in the same manner as it had been doing hitherto fore and ABCl shall not alter or expand the business of its Paper Undertaking except with the concurrence of ABC Paper.
(b) ABCl shall not, without the written concurrence of Board of the ABC Paper, alienate, charge or encumber any of its properties defined in Clause 1.10 and referred to in Clause 4 above except in the ordinary course of business or pursuant to any pre-existing obligation undertaken prior to the date of acceptance of the Scheme by the respective Boards of Directors of the ABCl and the ABC Paper.
(c) ABCl shall not vary or alter, except in the ordinary course of its business and as may be required for reorganization, the terms and conditions of employment of any of the employees of Paper Undertaking.
8.2With effect from the Effective Date, the ABC Paper shall commence and carry on and shall be authorized to carry on the business carried on by the Paper Undertaking of ABCL.

9. STAFF, WORKMEN &EMPLOYEES OF PAPER UNDERTAKING

9.1 On the Scheme becoming operative, all staff, workmen and employees of the Paper Undertaking of ABCl in service on the Effective Date shall be deemed to have become staff, workmen and employees of the ABC Paper with effect from the Appointed Date without any break in their service and on the basis of continuity of service, and the terms and conditions of their employment with ABC Paper shall not be less favourable than those applicable to them with reference to ABCl on the Effective Date.
9.2 It is expressly provided that, on the Scheme becoming effective, the Provident Fund, Gratuity Fund, Superannuation Fund or any other Special Fund or Trusts created or existing for the benefit of the staff, workmen and employees of the Paper Undertaking of ABCl shall be transferred to ABC Paper. ABC Paper shall have the obligation to make contributions to the said Fund or Funds in accordance with the provisions thereof as per the terms provided in the respective Trust Deeds, if any, to the end and intent that all rights, duties, powers and obligations of ABCl in relation to such Fund or Funds shall become those of ABC Paper. It is clarified that the services of the staff, workmen and employees of the Paper Undertaking of ABCl will be treated as having been continuous for the purpose of the said Fund or Funds. Until such time that ABC Paper creates/arranges for its own funds, ABC Paper may, subject to necessary approvals and permissions if any, continue to make contributions pertaining to the employees of the Paper Undertaking of ABCl to the relevant fund of ABCL. Such contributions and other balances pertaining to the employees of the Paper Undertaking of ABCl shall be transferred to the funds created by ABC Paper on creation of relevant funds/arrangements by ABC Paper.

10. LEGALPROCEEDINGSRELATINGTOPAPERUNDERTAKING

10.1 If any suit, appeal or other proceedings of whatever nature by or against ABCl and relating to its Paper Undertaking are pending, the same shall not abate or be discontinued or in any way be prejudicially affected by reason of or by anything contained in this Scheme, but the said suit, appeal or other legal proceedings may be continued, prosecuted and enforced by or against ABC Paper, as the case may be, in the same manner and to the same extent as it would or might have been continued, prosecuted and enforced by or against ABCl as if this Scheme had not been made.
10.2 After the Appointed Date, if any proceedings are taken against ABCl in respect of the matters referred to in the sub-clause 10.1 above, it shall defend the same at the cost of ABC Paper and ABC Paper shall reimburse and indemnify ABCl against all liabilities and obligations incurred by ABCl in respect thereof.
10.3ABC Paper undertakes to have all legal or other proceedings initiated by or against ABCl referred to in Clause 10.1 above transferred into its name and to have the same continued, prosecuted and enforced by or against ABC Paper to the exclusion of ABCL.

11. CON"rRACTS, DEEDS, ETC. OF PAPER UNDERTAKING

SUbject to the other provisions of this Scheme, all contracts, deeds, bonds, agreements and other instruments, if any, of whatsoever nature relating to the Paper Undertaking of ABCl and to which ABCl is party and subsisting or having effect on the Effective Date, shall be in full force and effect against or in favour of ABC Paper, as the case may be, and may be enforced by or against ABC Paper as fully and effectually as if, instead of ABCl, ABC Paper had been a party thereto. ABC Paper shall enter into and/ or issue and/or execute deeds, writings or confirmations or enter into any tripartite arrangements, confirmations or novations, to which ABCl will, if necessary, also be party in order to give formal effect to the provisions of this Scheme, if so required or becomes necessary. ABC Paper shall be deemed to be authorised to execute any such deeds, writings or confirmations on behalf of ABCl and to implement or carry out all formalities required on the part of ABCl to give effect to the provisions of this Scheme.

12. SAVING OF CONCLUDED TRANSACTIONS OF PAPER UNDERTAKING

The transfer of properties and liabilities under Clause 4 above and the continuance of proceedings by or against ABCl under Clause 10 above shall not affect any transaction or proceedings already concluded by ABCl on or after the Appointed Date till the Effective Date, to the end and intent that ABC Paper accepts and adopts all acts, deeds and things done and executed by ABCl in respect thereto as done and executed on behalf of itself.

PART -III REORGANIZATION OF SHARE CAPITAL OF AEL

13. REORGANIZATION OF SHARE CAPITAL OF AEL

13.1 Upon the Scheme becoming operative, AEl shall, reorganize its paid up equity share capital by subdividing 5,019,400 equity shares of Rs. 10 each credited as fully paid up into 5,019,400 equity shares of Rs. 5 each credited as fUlly paid up and subsequent to such sub-division, as integral part of the said reorganization, consolidate 5,019,400 equity shares of Rs. 5 each credited as fUlly paid up into 2,509,700 equity shares of Rs. 10 each credited as fully paid up.
13.2 In consideration of the sub-division and consolidation mention in Clause 13.1 above, AEl shall, without any further application or deed, issue and allot to its equity shareholders, whose names appear in the Register of Members as on the Record Date for Reorganization of Share Capital of AEl as defined in Clause 1.13, his/her heirs, executors, administrators or the successors-in-title, as the case may be, 1 (one) 7% Redeemable Preference Shares of Rs.10/-(Rupees Ten) each credited as fully paid-up and to be redeemed at par Within a minimum period of 6 (Six) months but not later than 1 (One) year from the Record Date for Reorganization of Share Capital of AEl as the Board of Directors of AEl may
decide, for every 2 (Two) fully paid-up equity shares of the face value of Rs. 10/-(Rupees Ten) each held by such equity shareholders, before the sub-division and consolidation of equity shares as mentioned in Clause 13.1 above and on the Record Date for Reorganization of Share Capital of AEL.
13.3 The share certificates of AEl in relation to the shares held by its equity shareholders shall, without any further application, act, instrument or deed, be deemed to have been automatically cancelled pursuant to the Reorganization of Share Capital as per Clause 13.1 above and new equity share certificates giving effect to sub-division and consolidation mentioned in Clause 13.1 above and new 7% redeemable preference share certificates will be issued by AEL. It is clarified that the number of shares held in dematerialized form will be reduced automatically and the de-mat account of the shareholders shall be credited after giving effect to the sub-division and consolidation as contemplated in Clause 13.1 and with 7% redeemable preference shares to be issued pursuant to Clause 13.2 above.
13.4 The Board of Directors of AEl shall consolidate all fractional equity share entitlements, if any, arising due to sub-division and consolidation of paid up equity share capital as contemplated in Clause 13.1 and allot Equity Shares in lieu thereof to a director or an officer of AEl or such other person as the Board of Directors of AEl shall appoint in this behalf who shall hold the Equity Shares in trust on behalf of the members entitled to fractional entitlements with the express understanding that such director(s) or officer(s) or person(s) shall sell the same in the market at such time or times and at such price or prices and to such person or persons, as it/he/they may deem fit, and pay to AEl, the net sale proceeds thereof, whereupon AEl shall distribute such net sale proceeds subject to taxes, if any, to the members in proportion to their respective fractional entitlements.
13.5 The fractional redeemable preference share entitlement, if any, arising pursuant to Clause 13.2 shall be paid by AEl to the members in cash.
13.6 The reorganization of paid up equity share capital and issuance of 7% redeemable preference shares pursuant to clause 13.1 and 13.2 above, which constitutes reduction of capital, shall be effected as a part of the Scheme only as the same does not involve either diminution of liability in respect of unpaid share capital or payment to any shareholder of any paid up share capital, and the order of the Court sanctioning the Scheme shall be deemed to be an order under Section 102 of the Act confirming the reduction.
13.7 Any allotment of equity shares out of the forfeited shares shall be adjusted by giving effect to provisions of Clause 13.1 and 13.2.

PART-IV DE-MERGER OF EDIBLE OILS BUSINESS

14. TRANSFER OF EDIBLE OILS BRANDS

14.1 Upon the Scheme becoming operative, before giving effect to the de-merger of Edible Oils Undertaking and with effect from the Appointed Date, Edible Oils Brands of ABCl as defined in Clause 1.7, shall without any further act or deed, be transferred to and vested in and/or be deemed to be transferred to and vested in AEl so as to vest in AEl all the rights and title pertaining to such Edible Oils Brands therein by virtue of H:gh Court Order, and it shall not be necessary to obtain the consent of any third party or other person in order to give effect to the provisions of this sub-clause.
14.2 ABCl and AEl hereto agree to execute all such documents or letters as may be required for the purpose of securing registration of the Edible Oils Brands in the name of AEL.
14.3 ABCl undertakes that its rights in the Edible Oils Brands is legally transferable and free of any encumbrances or charges and that ABCl, upon the Scheme becoming operative and with effect from the Appointed Date for Transfer of Edible Oils Brands, will cease to have any rights of any nature in the Edible Oils Brands and consequently will not, directly or indirectly, use or cause to be used the Edible Oils Brands.
14.4 Upon this Scheme becoming operative and in consideration of transfer and vesting of Edible Oils Brands of ABCl in AEl as per Clause 14.1 above, AEl shall, without any further application or deed, issue and allot to ABCl 16,40,037 (Sixteen lacs forty thousand and thirty seven) Equity Shares of the face value of Rs. 10/-(Rupees Ten) each credited as fully paid-up at a premium of RS.34.20 (Rupees Thirty four and paise twenty) each for consideration other than cash. The consideration for the transfer of Edible Oils Brands and premium at which the Equity Shares shall be issued and allotted by AEl to ABCl for consideration other than cash has been arrived at by independent valuers jointly appointed by Board of Directors of ABCl and AEL.

15. VESTING OF UNDERTAKING

15.1 With effect from the Appointed Date or such other date as may be 'fixed or approved by the High Courts and upon the Scheme becoming effective, the whole of the Edible Oils Undertaking of ABCl, as defined in Clause 1.6, shall, under the provisions of Sections 391 and 394 and all other applicable provisions, if any, of the Act, and pursuant to the orders of the High Court or any other appropriate authority sanctioning the Scheme and without any further act or deed, be transferred to and vested in and/or deemed to be transferred to and vested in AEl on a going concern basis.
15.2 Without prejudice to the generality of the above said clause:
15.2.1 With effect from the Appointed Date and upon the Scheme becoming effective, any statutory licences, permissions, approvals, quotas or consents to carry on the business of the Edible Oils Undertaking of ABCl shall stand vested in or transferred to AEl without any further act or deed and shall be appropriately mutated by the StatutoryAuthorities concerned in favour of AEL. The benefit of all statutory and regulatory permissions, factory licences, environmental approvals and consents, sales tax registrations or any other licences of ABCl relatable to Edible Oils Undertaking and consents shall vest in and become available to AEl pursuant to this Scheme. In so far as the various incentives, subsidies, rehabilitation Schemes, special status and other benefits or privileges enjoyed, granted by any Government body, local authority or by any other person, or availed of by ABCl pertaining to the Edible Oils Undertaking, as the case may be, are concerned, the same shall vest with and be available to AEl on the same terms and conditions.
15.2.2 In respect of all the movable assets of the Edible Oils Undertaking of ABCl and the assets which are otherwise capable of transfer by physical delivery or endorsement and delivery, including cash on hand, shall be so transferred to AEl and deemed to have been physically handed over by physical delivery or by endorsement and delivery, as the case may be, to AEl to the end and intent that the property and benefit therein passes to AEl with effect from the Appointed Date.
15.2.3 Such delivery and transfer shall be made on a date mutually agreed upon between the respective Board of Directors of ABCl and AEL. However such date shall be within thirty days from the Effective Date.
15.2.4 In respect of any intangible assets of the Edible Oils Undertaking of ABCl other than those mentioned in Clause 15.2.3 above, and those other movable assets, incluQing actionable claims, sundry debtors, outstanding loans, advances recoverable in cash or kind or for value to be received and deposits with the Government, semi-Government, local and other authorities and bodies and customers, ABCl shall if so required by AEl, and AEl may, issue notices in such form as AEl may deem fit and proper stating that pursuant to the High Courts having sanctioned this Scheme under Section 394 of the Act, the relevant debt, loan, advance or other asset, be paid or made good or held on account of AEl, as the person entitled thereto, to the end and intent that the right of ABCl to recover or realize the same stands transferred to AEl and that appropriate entries should be passed in their respective books to record the aforesaid changes.
15.2.5 It is expressly clarified that upon the Scheme becoming effective all taxes payable by ABCl pertaining to Edible Oils Undertaking from the Appointed Date onwards shall be treated as the tax liability of AEl; similarly all credits for tax deduction at source on income of Edible Oils Undertaking of ABCl or obligation for deduction of tax at source on any payment made by or to be made by the Edible Oils Undertaking of ABCl shall be made or deemed to have been made and duly complied with if so made by ABCl or AEL. Similarly any advance tax payment required to be made by specified due dates in the tax laws shall also be deemed to have been made correctly if so made by ABCL.
15.2.6 All taxes of any nature, duties, cesses or any other like payment or deductions made by ABCl pertaining to Edible Oils Undertaking to any statutory authorities such as Income tax, sales tax, service tax etc. or any tax deduction / collection at source, relating to the period after the Appointed Date up to the Effective Date shall be deemed to have been made account of or paid by AEl and the relevant authorities shall be bound to transfer to the account of and give credit for the same to AEl upon the passing of the orders on this Scheme by the High Courts upon relevant proof and documents being provided to the said authorities.
15.2.7 All cheques and other negotiable instruments, payment orders received in the name of ABCl pertaining to Edible Oils Undertaking after the Effective Date shall be accepted by the Bankers of AEl and credited to the account of AEL. Similarly, the Banker of AEl shall honour cheques issued by ABel pertaining to Edible Oils Undertaking for payment after the Effective Date.
15.3 With effect from the Appointed Date, all debts, liabilities, contingent liabilities, duties and obligations of every kind, nature and description of ABCl relatable to the Edible Oils Undertaking and as defined under Clause 1.6 shall also, under the provisions of Sections 391 and 394 of the Act, without any further act or deed, be transferred to or be deemed to be transferred to AEl so as to become as from the Appointed Date the debts, liabilities, contingent liabilities, duties and obligations of AEl and it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of which such debts, liabilities, contingent liabilities, duties and obligations have arisen in order to give effect to the provisions of this sub-clause.

16. ISSUANCEOFEQUITYSHARESINAEL

16.1 Upon this Scheme becoming operative and in consideration of the de-merger and vesting of the Edible Oils Undertaking of ABCl in AEl, AEl shall, without any further application or deed, issue and allot to the equity shareholders of ABCl and whose name appears in the Register of Members of ABCl as on the Record Date, his/her heirs, executors, administrators or the successors-in-title, as the case may be, one (1) Equity Share of the face value of Rs. 10/-(Rupees Ten) each credited as fully paid-up for every four (4) Equity Shares of the face value of Rs. 10/-(Rupees Ten) each of ABCL. The swap ratio has been arrived at by independent valuers jointly appointed by Board of Directors of AEl and ABCL.
16.2 The Equity Shares to be issued and allotted in terms hereof will be subject to the Memorandum and Articles of Association of AEL. The new Equity Shares shall rank pari passu in all respects including dividend with the existing EqUity Shares of AEl and shall be subject to any condition that may be imposed or suggested by the Stock Exchange/s or any other competent authority.
16.3 The shareholders of ABCl, to whom equity shares are to be issued by AEl pursuant to Clause 16.1 above, shall be issued shares in dematerialized form. However, shareholders of ABCl shall have an option to receive the certificate(s) of shares or receive credit in their de-mat accounts. Those, who wish to receive their equity shares in dematerialized form, shall provide all details relating to their account with depository participant to AEL. In case no response is received, AEl shall issue the shares in the form in which the shares were held as on the Record Date by the concerned shareholder in ABCL.
16.4 AEl shall, if and to the extent required, apply for and obtain any approvals from concerned regulatory authorities for the issue and allotment by AEl of eqUity shares to the members of ABCl under the Scheme.
16.5 The Board of Directors of AEl shall consolidate all fractional entitlements, if any, arising out of the aforesaid exchange process and allot Equity Shares in lieu thereof to a director or an officer of AEl or such other person as the Board of Directors of AEl and ABCl shall jointly appoint in this behalf who shall hold the Equity Shares in trust on behalf of the members entitled to fractional entitlements with the express understanding that such director(s) or officer(s) or person(s) shall sell the same in the market at such time or times and at such price or prices and to such person or persons, as iVhe/they may deem fit, and pay to AEl, the net sale proceeds thereof, whereupon AEl shall distribute such net sale proceeds subject to taxes, if any, to the members in proportion to their respective fractional entitlements.
16.6 The approval of this Scheme by the shareholders of AEl shall be deemed to be due compliance of the provision of Section 81 (1A) and other relevant and applicable provisions of the Act for the issue and allotment of Equity Shares by AEl to the shareholders of ABCl, as provided in this Scheme.

17. ACCOUNTINGTREATMENTINTHEBOOKSOFAEL

17.1 Upon the Scheme becoming effective and with effect from the Appointed Date, AEl shall record the assets and liabilities of the Edible Oils Undertaking of ABCl vested in it pursuant to this Scheme, at their respective book values as appearing in the books of ABCl, at the close of business of the day immediately preceding the Appointed Date.
17.2 AEl shall credit the aggregate face value of the new equity shares issued by it to the shareholders of ABCl pursuant to this Scheme to the Share Capital Account in its books of accounts.
17.3 The difference, between the amount credited by AEl to the Share Capital Account, as per Clause 17.2 above, and the Net Assets of the Edible Oils Undertaking of ABCl as per Clause 17.1 above, shall be debited / credited by AEl to the General Reserve Account.

18. BUSINESSANDPROPERTYINTRUSTFORAEL

18.1 During the period between the Appointed Date and the Effective Date: 2b
(a) ABCl shall carry on and be deemed to have carried on its business and activities in relation to the Edible Oils Undertaking and shall stand possessed of all assets and properties of the Edible Oils Undertaking as defined in Clause 1.6, and referred to in Clause 15 above, in trust for AEl and shall account for the same to AEl.
(b) Any income or profit accruing or arising to ABCl in relation to the Edible Oil Undertaking and all costs, charges, expenses and losses incurred by ABCl in relation to the Edible Oils Undertaking shall for all purposes be treated as the income, profits, costs, charges, expenses and losses, as the case may be, of AEL.
(c) ABel shall not utilize the profits or income, if any, relating to the Edible Oils Undertaking for the purpose of declaring or paying any dividend or for any other purpose in respect of the period falling on and after the Appointed Date, without the prior written consent of AEL.
18.2 With effect from the Appointed Date, all debts, liabilities, duties and obligations of the Edible Oils Undertaking of ABCl as on the close of business on the date preceding the Appointed Date whether or not provided in the books of the Edible Oils Undertaking of ABCl and all other liabilities relating to the Edible Oils Undertaking which arises or accrues on or after the Appointed Date but which relates to the period on or upto the Appointed Date shall be deemed to be the debt, liabilities, duties and obligations of AEL.

19. CONDUCT OF BUSINESS OF EDIBLE OILS UNDERTAKING

19.1 As and from the date of acceptance of this Scheme by the Board of Directors of the ABCl and the Board of Directors of AEl till the Effective Date: (a) ABCl shall carry on the business of its Edible Oils Undertaking with reasonable diligence and in the same manner as it had been doing hitherto fore, and ABCl shall not alter or expand the business of its Edible Oils Undertaking except with the concurrence of AEL. (b) ABCl shall not, without the written concurrence of Board of AEl, alienate, charge or encumber any of its properties defined in Clause 1.6 and referred to in Clause 15 above except in the ordinary course of business or pursuant to any pre-existing obligation undertaken prior to the date of acceptance of the Scheme by the respective Boards of Directors of the ABCl and the AEL. (c) ABCl shall not vary or alter, except in the ordinary course of its business and as may be required for reorganization, the terms and conditions of employment of any of the employees of Edible Oils Undertaking.
19.2 With effect from the Effective Date, AEl shall commence and carry on and shall be authorized to carry on the business carried on by the Edible Oils Undertaking of ABCL.

20. STAFF, WORKMEN & EMPLOYEES OF EDIBLE OILS UNDERTAKING

20.1 On the Scheme becoming operative, all staff, workmen and employees of the Edible Oils Undertaking of ABCl in service on the Effective Date shall be deemed to have become staff, workmen and employees of AEl with effect from the Appointed Date without any break in their service and on the basis of continuity of service, and the terms and conditions of their employment with AEl shall not be less favourable than those applicable to them with reference to ABCl on the Effective Date.
20.2 It is expressly provided that, on the Scheme becoming effective, the Provident Fund, Gratuity Fund, Superannuation Fund or any other Special Fund or Trusts created or existing for the benefit of the staff, workmen and employees of the Edible Oils Undertaking of ABCl shall be transferred to AEL. AEl shall have the obligation to make contributions to the said Fund or Funds in accordance with the provisions thereof as per the terms provided in the respective Trust Deeds, if any, to the end and intent that all rights, duties, powers and obligations of ABCl in relation to such Fund or Funds shall become those of AEL. It is clarified that the services of the staff, workmen and employees of the Edible Oils Undertaking of ABCl will be treated as having been continuous for the purpose of the said Fund or Funds. Until such time that AEl creates/arranges for its own funds, AEl may, subject to necessary approvals and permissions if any, continue to make contributions pertaining to the employees of the Edible Oils Undertaking of ABCl to the relevant fund of ABCL. Such contributions and other balances pertaining to the employees of the Edible Oils Undertaking of ABCl shall be transferred to the funds created by AEl on creation of relevant funds/arrangements by AEL. 27

21. LEGAL PROCEEDINGS RELATING TO EDIBLE OILS UNDERTAKING

21.1 If any suit, appeal or other proceeding of whatever nature by or against ABCL and relating to its Edible Oils Undertaking is pending, the same shall not abate or be discontinued or in any way be prejudicially affected by reason of or by anything contained in this Scheme, but the said suit, appeal or other legal proceedings may be continued, prosecuted and enforced by or against AEL, as the case may be, in the same manner and to the same extent as it would or might have been continued, prosecuted and enforced by or against ABCL as if this Scheme had not been made.

21.2 After the Appointed Date, if any proceedings are taken against ABCL in respect of the matters referred to in the sub-clause 21.1 above, it shall defend the same at the cost of AEL and AEL shall reimburse and indemnify ABCL against all liabilities and obligations incurred by ABCL in respect thereof.

21.3 AEL undertakes to have all legal or other proceedings initiated by or against ABCL referred to in Clause 21.1 above transferred into its name and to have the same continued, prosecuted and enforced by or against AEL to the exclusion of ABCL.

22. CONTRACTS, DEEDS, ETC. OF EDIBLE OILS UNDERTAKING

Subject to the other provisions of this Scheme, all contracts, deeds, bonds, agreements and other instruments, if any, of whatsoever nature relating to the Edible Oils Undertaking of ABCl and to which ABCl is party and subsisting or having effect on the Effective Date, shall be in full force and effect against or in favour of AEl, as the case may be, and may be enforced by or against AEl as fUlly and effectually as if, instead of ABCl, AEl had been a party thereto. AEl shall enter into and/or issue and/or execute deeds, writings or confirmations or enter into any tripartite arrangements, confirmations or novations, to which ABCl will, if necessary, also be party in order to give formal effect to the provisions of this Scheme, if so required or becomes necessary. AEl shall be deemed to be authorised to execute any such deeds, writings or confirmations on behalf of ABCl and to implement or carry out all formalities required on the part of ABCl to give effect to the provisions of this Scheme.

23. SAVINGOFCONCLUDEDTRANSACTIONSOFEDIBLEOILSUNDERTAKING

The transfer of properties and liabilities under Clause 15 above and the continuance of proceedings by or against ABCl under Clause 21 above shall not affect any transaction or proceedings already concluded by ABCl on or after the Appointed Date till the Effective Date, to the end and intent that AEl accepts and adopts all acts, deeds and things done and executed by ABCl in respect thereto as done and executed on behalf of itself.

PART-V REDUCTIONAND CANCELLATION OF EQUITYSHARES INABCL

24. REDUCTIONAND CANCELLATION OF EQUITY SHARES IN ABCL

24.1 Upon coming into effect of the Scheme and upon vesting in and transfer of the Paper Undertaking and Edible Oils Undertaking to ABC Paper and AEL respectively, ABCl shall, for every four (4) fully paid-Up Equity Share of Rs. 10/-(Rupees Ten) each held by equity shareholders on the Record Date, without any further application or deed, reduce and cancel two (2) fully paid-Up EqUity Shares of the face value of Rs. 10/-(Rupees Ten) each against the allotment and issuance of EqUity Shares by ABC Paper pursuant to Clause 5 of this Scheme and one (1) fully paid-up Equity Share of the face value of Rs. 10/-(Rupees Ten) each against the allotment and issuance of Equity Shares by AEl pursuant to Clause 16 of this Scheme.

24.2 The share certificates of ABCl in relation to the shares held by its equity shareholders shall, without any further application, act, instrument or deed, be deemed to have been automatically cancelled pursuant to reduction and cancellation as per Clause 24.1 above and new share certificates with the revised number of Equity Shares will be issued by ABCL. It is clarified that the number of shares held in dematerialized form will be reduced automatically and the de-mat account of the shareholders, to whom reduced equity shares are to be allotted pursuant to Clause 24.1 shall be credited after giving effect to the reduction and cancellation as contemplated in Clause 24.1.

24.3 The Board of Directors of ABCl shall consolidate all fractional entitlements, if any, arising due to the reduction and cancellation of EqUity Shares as contemplated in Clause 24.1 and allot Equity Shares in lieu thereof to a director or an officer of ABCl or such other person as the Board of Directors of ABCl shall appoint in this behalf who shall hold the Equity Shares in trust on behalf of the members entitled
to fractional entitlements with the express understanding that such director(s) or officer(s) or person(s) shall sell the same in the market at such time or times and at such price or prices and to such person or persons, as it/he/they may deem fit, and pay to ABCl, the net sale proceeds thereof, whereupon ABCl shall distribute such net sale proceeds subject to taxes, if any, to the members in proportion to their respective fractional entitlements.

24.4The reduction and cancellation of equity shares as contemplated in Clause 24.1, shall be effected as a part of the Scheme only as the same does not involve either diminution of liability In respect of unpaid share capital or payment to any shareholder of any paid up share capital, and the order of the Court sanctioning the Scheme shall be deemed to be an order under Section 102 of the Act confirming the reduction.

25. ACCOUN"r1NG TREATMENT IN "rHE BOOKS OF ABCl

25.1 On the Scheme becoming effective, ABCl shall transfer the Paper Undertaking along with all its assets and liabilities as defined in Clause 1.6 of this Scheme to ABC Paper at their respective values as appearing in the books at the close of business of the day immediately preceding the Appointed Date.

25.2 On the Scheme becoming effective, ABCl shall transfer the Edible Oils Undertaking along with all its assets and liabilities as defined in Clause 1.10 of this Scheme to AEl at their respective values as appearing in the books at the close of business of the day immediately preceding the Appointed Date.

25.3 The difference, between the Net Assets transferred by ABCl pursuant to Clause 25.1 and 25.2 above and the amount reduced from the Share Capital Account pursuant to Clause 24.1, shall be adjusted to the Securities Premium Account, Capital Reserve Account and General Reserve Account, in this order of utilization and to the extent required.

25.4 The reduction of Capital Reserve Account and Securities Premium Account pursuant to Clause 25.3 above shall be effected as an integral part of the Scheme itself as the same does not involve either diminution of liability in respect of unpaid capital or payment to any shareholder of any amount paid in respect of shares issued and the Order of the High Court sanctioning the Scheme shall be deemed to be an order under Section 102 of the Act confirming the reduction.

26.CHANGE IN NAME

26.1 On the Scheme becoming effective, the name of ABCl shall stand changed to "Amrit Corp. Limited" and the same shall be substituted for the existing name wherever it appears in the Memorandum and Articles of Association of ABCL.

26.2 The approval of this Scheme by the Hon'ble High Court of Allahabad, Hon'ble High Court of Delhi and Hon'ble High Court of Chandigarh shall be deemed to be due compliance of the provision of Section 21 and other relevant and applicable provision of the Act for the change in name of ABCl, as provided in Clause 26.1 above.

26.3 On the Scheme becoming effective, the name of AEl shall stand changed to "Amrit Banaspati Company Limited" and the same shall be substituted for the existing name wherever it appears in the Memorandum and Articles of Association of AEL.

26.4 The approval of this Scheme by the Hon'ble High Court of Allahabad, Hon'ble High Court of Delhi and Hon'ble High Court of Chandigarh shall be deemed to be due compliance of the provision of Section 21 and other relevant and applicable provision of the Act for the change in name of AEl, as provided in Clause 26.3 above.

27. REMAINING BUSINESS

The Remaining Business and all the assets, liabilities and obligations pertaining thereto shall continue to belong to and be vested in and be managed by ABCL.

PART -VI GENERAL TERMS AND CONDITIONS

28. APPLICATIONS TO THE HIGH COURT

ABCl and the Transferee Companies shall, with all reasonable dispatch, make applications to the High Court under whose jurisdiction the registered office of ABCl and the Transferee Companies are situated, for sanctioning this Scheme under Sections 391-394 of the Act and other applicable provisions of the Act.

29. MODIFICATIONS/AMENDMENTS TO THE SCHEME

ABCl and the Transferee Companies by their respective Board of Directors may make and/or consent to any modifications/ amendments to the Scheme or to any conditions or limitations that the High Court or any other authority may deem fit to direct or impose or which may otherwise be considered necessary, desirable or appropriate by them (Le. the Board of Directors). The ABCl and the Transferee Companies by their respective Board of Directors shall be authorized to take ail such steps as may be necessary, desirable or proper to resolve any doubts, difficulties or questions whether by reason of any directive or order of any other authority or otherwise however arising out of or under or by virtue of the Scheme and/ or any matter concerned or connected therewith.

30. CONDI1"IONALITV OF THE SCHEME

The Scheme is and shall be conditional upon and subject to:
i) The Scheme being approved by the requisite majorities In number and value of such classes of persons including the respective members and/or creditors of ABCl and the Transferee Companies as may be directed by the High Court.
ii) The sanction of the High Court under Sections 391 to 394 of the said Act in favour of ABCl and the Transferee Companies under the said provisions and to the necessary Order under Section 394 of the said Act being obtained.
iii) Certified or authenticated copies of the Orders of the High Courts sanctioning the scheme being filed with the respective Registrar of Companies by ABCl and the Transferee Companies.
iv) All other sanctions and orders as are legally necessary or required in respect of the Scheme being obtained.

31. EFFECTOF NON-RECEIPT OF APPROVALSlSANCTIONS

In the event of any of the said sanctions and approvals referred to in Clause 30 not being obtained and/ or the Scheme not being sanctioned by the High Courts or such other competent authority, this Scheme shall stand revoked, cancelled and be of no effect, save and except in respect of any act or deed done prior thereto as is contemplated hereunder or as to any rights and/ or liabilities which might have arisen or accrued pursuant thereto and which shall be governed and be preserved or worked out as is specifically provided in the Scheme or as may otherwise arise in law. Each party shall bear and pay its respective costs, charges and expenses for and or in connection with the Scheme.

32. COSTS,CHARGES & EXPENSES

All costs, charges, taxes including duties, levies and all other expenses, if any of ABCl and the Transferee Companies arising out of or incurred in connection with and implementing this Scheme and matters incidental thereto shall be borne by the respective Transferee Companies.