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GO 29 Transfer Scheme AP Electricity Reforms Act 1998 Dated 31 May 2014

In exercise of powers conferred by Sections 23, 24 and 25 of the Andhra Pradesh Electricity Reform Act, 1998 (Act 30 of 1998) and as per Section 53 of AP Re-organisation Act, 2014, the Governor of Andhra Pradesh hereby makes the following rules for the purpose of providing and giving effect to the transfer of assets, properties, liabilities, obligations, proceedings and personnel of Andhra Pradesh Power Generation Corporation Limited to Telangana Power Generation Corporation Limited.

  1. The Andhra Pradesh Re-organization Act, 2014 received the President’s assent on 01 March 2014 for the re-organization of the existing State of Andhra Pradesh. The “Appointed Day” for the new State formation of “Telangana” is 02 June 2014. The Act requires the State of Andhra Pradesh to initiate activities related to creation of successor states including the apportionment of assets, liabilities, employees, contracts etc, between the two successor states. 
  2. This scheme of Apportionment/Demerger/Arrangement (hereinafter referred to as the “Scheme”) provides for and gives effect to the transfer of Assets, Properties, Liabilities, Obligations, Proceedings, Personnel, etc. relating to whole business of Andhra Pradesh Power Generation Corporation Limited (APGENCO) in terms of Sections 68 read with section 53 and other relevant provisions of the A.P. Re-organisation Act, 2014 ,and sections 23, 24 and 25 of the Andhra Pradesh Electricity Reforms Act, 1998 (Act of 30 of 1998 ) and in the manner provided for in the Scheme between the Transferor company, which would remain with the residuary State of Andhra Pradesh and Transferee Company to be transferred to the successor state of Telangana (the two states collectively referred as Successor States ) 
  3. The apportionment as embodied in this Scheme is intended to effectively provide for transfer of assets and liabilities in physical form or by making payment or adjustment through any other mode as may be agreed to by the two successor States on such apportionment.
  4. APGENCO is a company incorporated under the Companies Act, 1956, on 28 December 1998, having its registered office at Vidyutsoudha, Khairatabad, Hyderabad – 500 082. The Authorized capital as on 31st March, 2014 is 25,00,00,000 equity shares of Rs.100 each amounting to Rs.2,500 Crores. Issued, subscribed and paid up capital is 21,06,80,007 equity shares of Rs.100 each fully paid amounting to Rs.2,106.80 Crores.
  5. The main object of the APGENCO inter-alia is to carry on the business of purchasing, importing, exporting, producing, trading, manufacturing or otherwise dealing in Electric Power.
  6. Telangana Power Generation Corporation Limited (TGGENCO) is a company being incorporated under the Companies Act, 2013, and starts functioning on and from the appointed date that is 2nd June, 2014.
  7. The main object of the TGGENCO inter-alia is to acquire Demerged Undertaking of APGENCO pursuant to provisions of AP Reorganization Act, 2014 all things connected thereto and to carry on the business of purchasing, importing, exporting, producing, trading, manufacturing or otherwise dealing in Electric Power.
  8. The Scheme has been drawn up to comply with the conditions as specified in the A.P.

Reorganization Act, 2014 and other applicable laws such that:

1. DEFINITIONS

The existing definitions, words, terminology etc. hitherto being used, defined or interpreted by APGENCO shall continue to prevail even from the Appointed Date.

Further in this Scheme (as defined hereinafter), unless repugnant to the meaning or context thereof, the following expressions shall have the meaning mentioned herein below:

Explanation: 

2. SHORT TITLE AND EXTENT:

SECTION 1 – DEMERGED UNDERTAKING

  1. Upon the Scheme coming into effect from the Appointed Date, all the operational Units of the Demerged Undertaking’ (including all the estate, Assets, rights, title, interest and authorities including accretions and appurtenances of the Demerged Undertaking of whatsoever nature including but not limited to the list of undertakings outlined in Schedule B of the Scheme) would vest with the Transferee Company as a going concern and shall as per the provisions of this Scheme in relation to the mode of vesting and Section 53 of the Act and without further act, instrument or deed, would be deemed to have been apportioned and transferred to and vested in the Transferee Company on the Appointed Date.
  2. In respect of all the movable assets owned by APGENCO in relation to the Demerged Undertaking as on the Effective Date and the assets which are otherwise capable of being transferred by physical delivery or endorsement and delivery or novation and delivery, including cash in hand, shall be so transferred to Transferee Company and deemed to have been physically handed over by physical delivery or by endorsement and delivery or novation and delivery, as the case may be, to Transferee Company to the end and intent that the property and benefit therein passes to Transferee Company with effect from the Appointed Date.
  3. In respect of such of the assets and liabilities located/held at the Head quarters of the Transferor Company shall be apportioned between the Transferee Company and Transferor Company on the basis of mutual agreement. 
  4. In respect of the investments in public, private or commercial undertaking companies held by APGENCO before the Appointed Date are apportioned on region basis where the projects are located.
  5. In respect of investments in projects having multiple units falling within the territories of States of Andhra Pradesh and Telangana shall be apportioned on the basis of population.
  6. The Transferor Company (by its Board of Directors) and the Transferee Company (by its Board of Directors), either by themselves or through a committee appointed by them in this behalf, may give such directions as they may consider necessary to exercise operational control and all rights arising out of the agreements already entered while making investments in the public, private or commercial undertaking or to review the position relating to the satisfaction of the projects in which the investments are made and all matters connected there with. 
  7. Upon apportionment of the assets and liabilities, such assets and liabilities shall be transferred in physical form on mutual agreement or by making payment or adjustment through any other mode as may be agreed to by the respective boards.
  8. The Contingent Assets, Disputed Receivables, if any, of APGENCO as on the Appointed date to be apportioned based on the Power Supply Ratio;
  9. Upon the Scheme coming into effect and subject to the provisions of this Scheme, all contracts, deeds, bonds, agreements, schemes, arrangements and other instruments of whatsoever nature in relation to the Demerged Undertaking’ to which the Transferor Company is a party or to the benefit of which the Transferor Company may be eligible, and which are subsisting or having effect immediately before the Effective Date in relation to the operational units apportioned as set out in Clause 1 above, shall be in full force and effect on or against or in favour as the case may be of the Transferee Company and may be enforced as fully and effectually as if, instead of the Transferor Company, the Transferee Company had been a party or beneficiary or oblige thereto.
  10. Without prejudice to the other provisions of the Scheme and notwithstanding the fact that vesting of the Demerged Undertaking’ occurs by virtue of Part II of the Scheme itself, the Transferee Company may, at any time after the coming into effect of this Scheme in accordance with the provisions hereof, if so required, under any law or otherwise, execute deeds (including deeds of adherence), confirmations or other writings or tripartite arrangements with any party to any contract or arrangement to which the Transferor Company is a party or any writings as may be necessary to be executed. The Transferee Company shall, under the provisions of Part II of this Scheme, be deemed to be authorized to execute any such writings on behalf of the Transferor Company and to carry out or perform all such formalities or compliances referred to above on the part of the Demerged Undertaking’ to be carried out or performed.
  11. For the avoidance of doubt and without prejudice to the generality of the foregoing, it is clarified that upon the coming into effect of this Scheme, all insurance claims and policies, consents, permissions, licenses, approvals, certificates, clearances generally and relating to operational units apportioned as set out clause 1 to 10 above and all branches, powers of attorney, authorities given by, issued to or executed in favour of the Transferor Company, all certifications and approvals, trademarks, patents and domain names, copyrights, industrial designs, trade secrets, product registrations and other intellectual property and all other interests relating to the Transferor Company, be transferred to and vested in the Transferee Company as if the same were originally given by, issued to or executed in favour of the Transferee Company, and the rights and benefits under the same shall be available to the Transferee Company.
  12. All the property, assets and liabilities of the Demerged Undertaking’ shall be transferred by the Transferor Company to the Transferee Company at the values appearing in the books of account of the Transferor Company as on Appointed day i.e., 02nd June, 2014;
  13. It is clarified that, upon the coming into effect of the Scheme, the liabilities and obligations of the Transferor Company in relation to the Apportioned Assets set out in Clause 1 to 8 above and being a part of the Demerged Undertaking shall, without any further act or deed be and stand transferred, or shall be deemed to have been transferred on the Appointed Date to the Transferee Company’, and shall become the liabilities and obligations of the Transferee Company’ which shall undertake to meet, discharge and satisfy the same;
  14. Where any of the liabilities and obligations of the Transferor Company as on the Appointed Date deemed to be transferred to the Transferee Company have been discharged by the Transferor Company after the Appointed Date and prior to the Effective Date, such discharge shall be deemed to have been for and on account of the Transferee Company, and all loans raised and used and all liabilities and obligations incurred by the Transferor Company for the operations of the Transferee Company after the Appointed Date and prior to the Effective Date shall be deemed to have been raised, used or incurred for and on behalf of the Transferee Company and to the extent they are outstanding on the Effective Date, shall also without any further act or deed be and stand transferred to the Transferee Company and shall become the liabilities and obligations of the Transferee Company which shall meet, discharge and satisfy the same.
  15. Upon the coming into effect of the Scheme, all legal, taxation or other proceedings (including before any statutory or quasi- judicial authority or tribunal) by or against the Transferor Company under any statute, whether pending on the Appointed Date or which may be instituted any time in the future and in each case relating to the Transferee Company shall be continued and enforced by or against the Transferee Company after the Effective Date. The Transferee Company shall be added as party to such proceedings and shall prosecute or defend such proceedings in co-operation with the Transferor Company.
  16. If proceedings are taken against the Transferor Company in respect of the matters referred to in sub-clause 14 above, it shall defend the same in accordance with the advice of the Transferee Company and at the cost of the Transferee Company, and the latter shall reimburse and indemnify the Transferor Company against all liabilities and obligations incurred by the Transferor Company in respect thereof. 
  17. The Transferee Company undertakes to have all legal, taxation or other proceedings initiated by or against the Transferor Company referred to in sub-clause 14 above transferred into its name and to have the same continued, prosecuted and enforced by or against the Transferee Company to the exclusion of the Transferor Company.
  18. With effect from the Appointed Date and up to and including the Effective Date:
    1. the Transferor Company shall be deemed to have been carrying on and to be carrying on all business and activities relating to the Transferee Company and stand possessed of all the estates, assets, rights, title, interest, authorities, contracts, investments and strategic decisions of the Transferee Company, including the rights and interest in any documents specified in Clause   hereof, for and on account of, and in trust for and for the benefit of the Transferee Company’; and
    1. all income, profits, costs, charges, expenses (including costs, charges and expenses relating to employees of the Transferor Company engaged in the Demerged Undertaking) and taxes accruing to the Transferor Company or losses arising or incurred by it (including the effect of taxes if any thereon), relating to the Demerged Undertaking’ shall for all purposes, be treated as the income, profits, costs, charges, expenses and taxes or losses, as the case may be, of the Transferee Company.
    1. The Transferor Company undertakes that it will from the date of approval of the Scheme by the Board of Directors of the Transferor Company and the Transferee Company, or the Appointed Date, whichever is earlier, and upto and including the Effective Date preserve and carry on the Demerged Undertaking’ with diligence and prudence.
  19. The transfer and vesting of the assets, liabilities and obligations of the Transferee Company under the Scheme and the continuance of the proceedings by or against the Transferee Company shall not affect any transaction or proceedings already completed by the Transferor Company on and after the Appointed Date to the end and intent that the Transferee Company accepts all acts, deeds and things done and executed by and/or on behalf of the Transferor Company as acts, deeds and things done and executed by and/or on behalf of the Transferee Company.
  20. The amount, if any, disallowed in the hands of the Transferor Company under section 43B or 40(a) of the Income tax Act, 1961 for the assessment years prior to the Appointed Date shall be eligible to be claimed by the Transferee Company on fulfillment of the conditions as laid down in sections 43B or 40(a) of the Income tax Act, 1961.
  21. Upon the Scheme becoming effective, the accounts of Transferor Company and Transferee Company as on the Appointed Date shall be reconstructed in accordance with the terms of this Scheme. Transferor Company and/or Transferee Company shall be entitled to revise their respective income-tax returns, TDS returns, and other statutory returns as may be required under respective statutes pertaining to direct taxes and indirect taxes, such as sales-tax; value added tax; excise duties; service tax; etc, and shall also have the right to claim refunds, advance tax credits, credit of tax under Section 115JB, credit of tax deducted at source, credit of foreign taxes paid/withheld, etc, if any, as may be required consequent to implementation of the Scheme
  22. All cheques and other negotiable instruments, payment orders received in the name of Transferor Company relatable to the Demerged Undertaking after the Effective Date shall be accepted by the bankers of Transferee Company and credited to the account of Transferee Company. Similarly, the bankers of Transferee Company shall honour cheques issued by Transferor Company between the Appointed Date and the Effective Date relatable to the Demerged Undertaking.

SECTION 2 – RESIDUARY UNDERTAKING 

SECTION 3 – LIABILITIES

SECTION 4 – REORGANISATION OF CAPITAL

SECTION- 5- PERSONNEL

SECTION 6- TRANFER OF SHARES OF TGGENCO

SECTION 7 – ACCOUNTING TREATMENT

Upon coming into effect of the Scheme, the Transferor Company shall give effect to the reorganization of capital as set out in Section 4 of this Scheme as at the Appointed Date as below:

Upon coming into effect of the Scheme, the Demerged Undertaking’ shall give effect to the following accounting treatment as at the Appointed Date:

PART III – OTHER TERMS & CONDITIONS 

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