THE HONOURABLE SRI JUSTICE N.V. RAMANA COMPANY PETITION No. 198 of 2009 ORDER: The petitioner-Transferee Company, namely Prism Cement Limited, filed this Company Petition, under Sections 391 to 394 of the Companies Act, 1956, praying to sanction the Scheme of Amalgamation of H. & R. Johnson (India) Limited (hereinafter referred to as ‘the First Transferor Company’) and RMC Readymix (India) Private Limited (hereinafter referred to as ‘the Second Transferor Company’) with the petitioner-Transferee Company, as approved by the shareholders of the Transferor and Transferee Companies. The petitioner-Transferee Company was originally incorporated under the name and style of “Karan Cement Limited” in the State of Andhra Pradesh, on 26.03.1992, under the provisions of the Companies Act, 1956 (for short ‘the Act’), and later, its name was changed to the present one with effect from 15.09.1994, and its registered office is situated at 305, Laxmi Niwas Apartments, Ameerpet, Hyderabad-500 016. The present authorized share capital of the petitioner- Transferee Company is Rs. 525,00,00,000/- divided into 50,50,00,000 equity shares of Rs.10/- each and 2,00,00,000 preference shares of Rs.10/- each. Its present issued, subscribed and paid up capital is Rs. 298,25,00,000 divided into 29,82,50,000/- equity shares of Rs.10/- each fully paid up. The main objects of the petitioner-Transferee company, as set out in its Memorandum of Association, are to produce, manufacture, refine, prepare, import, export, purchase, sell and generally to deal in all kinds of Portland Cement (Portland pozzolona cement, Portland slag cement, Portland rapid hardening cement, Portland High alumina, Portland oil well cement special cement, masanory cement, lime pozzolona cement) cement products of any description (pipes, poles, asbestos sheet, blocks, tiles, garden wares etc.) lime, limestone, gypsum, kankar and/or by products thereof, and in connection therewith to take on lease or acquire, erect, construct, establish, operate and maintain cement factories, limestone quarries, workshops and other works, etc. The First Transferor Company was originally incorporated as a Private Limited Company, in the name and style of “H. & R. Johnson (India) Private Limited”, in the State of Maharashtra, on 25.01.1958, under the provisions of the Act, and later it became Limited Company and its name was changed to the present one with effect from 05.05.1975. Its registered office is situated at Windsor, 7th Floor, CST Road, Kalina, Santacruz (East), Mumbai- 400 098, Maharashtra. The authorized share capital of the First Transferor Company, as at 31.03.2009, is Rs.40,00,00,000/- divided into 20,00,000 equity shares of Rs.100/- each and 20,00,000 preference shares of Rs.100/- each. Its issued, subscribed and paid up capital, as at 31.03.2009, is Rs.23,14,04,500/- divided into 12,39,045 equity shares of Rs.100/- each fully paid up and 10,75,000 6.5% redeemable preference shares of Rs.100/- each fully paid up. It is stated that, out of the said redeemable preference shares, 10,00,000 preference shares have been redeemed on 12.07.2009 and the remaining 75,000 preference shares have been duly redeemed on 31.07.2009, and except that there is no change in the aforesaid share capital of the First Transferor Company, as on date. The main objects of the First Transferor Company are to execute with or without modification and carry into effect an Agreement with H. & R. Johnson Limited, Highgate Tile Works, Stoke-on-trent, England, in terms of the Draft Agreement which provides for the acquisition and/or purchase of plant and machinery and technical skill and knowledge relating to the manufacture of Ceramic Glazed Tiles, Sanitary ware, Earthenware and other allied products and the services of technicians of the said H. & R. Johnson Limited as provided in the said Agreement, a copy whereof has, for the purpose of identification, been endorsed by two of the subscribers hereof and to enter into any supplementary or further or altered Agreement or Agreements in reference to the subject matter of such Agreement or any part thereof, etc. The Second Transferor Company was incorporated on 03.07.1996, in the State of Maharashtra, under the provisions of the Act, and its registered office is situated at Windsor, 7th Floor, CST Road, Kalina, Santacruz (East), Mumbai- 400 098, Maharashtra. The present authorized share capital of the Second Transferor Company is Rs.75,00,00,000/- divided into 7,50,00,000 equity shares of Rs.10/- each, and its issued, subscribed and paid up capital is Rs. 70,50,00,000/- divided into 7,05,00,000 equity shares of Rs. 10/- each fully paid up. The main object of the Second Transferor Company is to establish and carry on in India the business of Manufacturers of and Dealers and Workers in Ready Mixed Concrete of all kinds, and materials used in the manufacture of Ready Mixed Concrete and Concrete of all kinds. The Transferee Company and the two Transferor Companies are engaged in the business of building materials. With a view to create an integrated company in the building materials, it was felt to amalgamate the Transferor companies with the Transferee company, which will result in creation of a company with a larger asset base and multiple revenue streams, which will be in the ultimate benefit of the shareholders and stakeholders, and that the merged entity would be able to create a niche for itself and gain advantage from this unique position within the market. The Board of Directors of Transferee as well as Transferor Companies approved the proposal for amalgamation of two Transferor companies with the Transferee Company, to be effective from 01.04.2009, subject to approval of the shareholders and confirmation by the Court. The Transferee Company, being a listed company, has obtained the consent of the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, to the Scheme of Amalgamation, vide letters dated 28.08.2009 and 25.08.2009 respectively. This Court, taking into consideration the affidavits filed by the secured and unsecured creditors of the petitioner-Transferee Company expressing their ‘no objection’ to the Scheme of Amalgamation, dispensed with the convening of meetings of secured and unsecured creditors of the Transferee Company, by common order dated 06.10.2009 passed in C.A.Nos.1126, 1127 and 1128 of 2009, and ordered for convening of meeting of the shareholders of the petitioner-Transferee company on 17.11.2009 and appointed an Advocate as Chairperson for the said meeting. As directed by this Court, notices of the meeting were sent individually to all the equity shareholders and also published in the newspapers, and on 17.11.2009, the meeting of the shareholders was convened under the chairmanship of the Advocate appointed by this Court. The Advocate, having conducted the meeting, filed report dated 21.11.2009 stating that the meeting was attended by 228 shareholders in person or through proxies, representing 18,66,91,746 equity shares, and out of them, 161 members, representing 18,53,27,661 equity shares, voted in favour of the resolution, that one member, representing 10 shares, voted against the resolution, that the votes of seven members, representing 13,54,740 equity shares, were declared invalid and 59 members, representing 9335 equity shares, abstained from voting. Thereafter, the petitioner filed the present Company Petition, praying to sanction the Scheme of Amalgamation, as approved by the requisite majority of shareholders to be binding on all the shareholders and creditors of the Transferee and Transferor Companies. It is relevant to mention here that the Transferor Companies, whose registered offices are situated at Mumbai, have also filed Company Petitions before the High Court of Bombay, seeking sanction of the Scheme. On 23.12.2009, this Court, while admitting the present Company Petition, issued notices to the Regional Director, Ministry of Corporate Affairs, Chennai, and Registrar of Companies, Andhra Pradesh, Hyderabad, and ordered publication of the notice of admission of the Company Petition in “Eenadu”, Telugu Daily, and “Indian Express”, English Daily, of Hyderabad editions. As ordered, the petitioner took out notices to the Registrar of Companies, Andhra Pradesh, Hyderabad, and the Regional Director, Ministry of Company Affairs, Chennai, and also by way of paper publication on 26.12.2009 and filed memo of proof of service into Court. The notices having been served, the Registrar of Companies, Andhra Pradesh, Hyderabad, filed affidavit stating that the Regional Director, Ministry of Corporate Affairs, Chennai, who is the competent authority on behalf of the Central Government, examined the Scheme carefully with reference to the material papers made available to him and, upon such examination, it was decided not to make any objection to the Scheme of Amalgamation and to leave the matter to be decided by this Court on merits, subject to sanction of the Scheme by the High Court of Bombay also. Today, when the matter came up for consideration, learned counsel for the petitioner placed before this Court, a copy of the order dated 22.01.2010 passed by the High Court of Bombay, in Company Petition Nos. 954 and 955 of 2009 filed by the two Transferor Companies, sanctioning the Scheme, subject to the orders of this Court. Heard the learned counsel on record and perused the Scheme of Amalgamation. The Transferee and Transferor Companies are engaged in similar businesses of manufacturing building materials. The Memorandum of Associations of the Transferee and Transferor Companies, enable amalgamation with other companies that are engaged in similar businesses. Considering the fact that the secured and unsecured creditors and requisite majority of members of the Transferee Company have consented to the Scheme of Amalgamation, as proposed and resolved by the Board of Directors of the respective companies, and that the Regional Director, Ministry of Corporate Affairs, Chennai, has also not raised any objection for sanction of the Scheme, which is in the best interest of the companies and their respective shareholders and stakeholders and is approved by the High Court of Bombay subject to orders of this Court, and the Scheme being not opposed to any provision of law or public interest, I am of the considered opinion that this Court also should not have any objection to the sanction of the Scheme of Amalgamation. Hence, the Scheme of Amalgamation is approved and the Company Petition is allowed. The Transferee Company shall serve a copy of this order on the Registrar of Companies, Andhra Pradesh, Hyderabad, within a period of four weeks from the date of receipt of a copy of this order. The Transferee Company shall pay to the Assistant Solicitor General, a sum of Rs. 5,000/- (Rupees Five Thousand only) towards fee. No costs. ________________________ JUSTICE N.V. RAMANA 4th February, 2010 IBL