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13. The assessee company (GGL), was carved out of NPIL, being the two glass manufacturing units, located at Kosamba and Jambusar (both in Gujarat).

14. Immediately after inception of GGPL, on 06.02.1998, vide an agreement dated 26.02.1998 with PEL, assessee sought to acquire technical knowhow, preambled as Non Competition Agreement, wherein NPIL was the confirming party. GGPL, thereafter entered into an agreement dated 16.04.1998 with NPIL for spin off, sell and transfer as slump sale with effect from 01.04.1998, which was approved by the Board of Directors in the EGM of NPIL on 20.03.1998 for the manufacture and marketing of glass to be produced by the newly 6 Piramal Glass Limited Earlier known as Gujarat Glass Ltd.

E. PEL and NPIL therefore are desirous to spin off the said Gujarat Glass Division of GGL to be a separate subsidiary Company of NPIL so that marketing of glass containers by using the technical know-how which would also facilitate inviting the partners for alliance, joint venture developments/diversification of business and that equity participation can also be offered in GGL to such incoming partner. F. As a result of the protracted negotiations between PEL and NPIL, NPIL has agreed to enter into a Memorandum of Undertaking with GGL, for spin-off, sale and transfer of its said Glass Division to GG with effect from 1st April, 1998 and also to initiate all the required process of obtaining statutory and other approvals, consents, no-objection including approval of its shareholders required under section 293(1)(ii) and 372 of the Companies Act, 1956 for such spin off the Gujarat Glass Division and making investment in GGL.

2. PEL shall not directly or indirectly make available in any manner whatsoever to any person, Company or entity the technical know-how for 7 Piramal Glass Limited Earlier known as Gujarat Glass Ltd.

ITA 4842/Mum/2004 ITA 4779/Mum/2004 manufacturing and marketing the glass containers which at present is being used by the said Gujarat Glass Division and upon spinning off the Division to GGL, the said know-how will be used by GGL.

F. As a result of the protracted negotiations between PEL and NPIL, NPIL has agreed to enter into a Memorandum of Undertaking with GGL, for spin-off, sale and transfer of its said Glass Division to GG with effect from 1st April, 1998 and also to initiate all the required process of obtaining statutory and other approvals, consents, no-objection including approval of its shareholders required under section 293(1)(ii) and 372 of the Companies Act, 1956 for such spin off the Gujarat Glass Division and making investment in GGL.