THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY PETITION No.16 of 2011 Dated: 08.04.2011 Between : M/s. Prabhat Industrial Corporation Limited …… Petitioner Company The Court made the following:- THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY PETITION No.16 of 2011 ORDER : The petitioner herein is M/s. Prabhat Industrial Corporation Limited (hereinafter referred to as the ‘Transferor Company). This petition is filed under Sections 391 and 394 of the Companies Act, 1956 (for short, ‘the Act’) with a prayer to sanction the scheme of amalgamation of M/s. Prabhat Industrial Corporation Limited with M/s. NSL Textiles Limited (hereinafter referred to as the ‘Transferee Company’). The Transferor Company was originally incorporated as a Public Limited Company under the name and style of M/s. Prabhath Textiles Limited in the State of Andhra Pradesh on 28.11.1995 under the certificate of incorporation No.01-22418 of 1995-96 and obtained certificate of commencement of business on 14.12.1995. Later on the company had changed its name to its present name i.e., M/s. Prabhat Industrial Corporation Limited, after complying with the necessary formalities under the Act and a fresh certificate of incorporation consequent on change of name was issued by the Registrar of Companies, Andhra Pradesh on 10.10.2001. The registered office of the Transferor Company is situated at NSL ICON, Door No.8-2- 684/2/A, Plot Nos.1 to 4, 4th Floor, Road No.12, Banjara Hills, Hyderabad- 500 034. The present authorised share capital of the Transferor Company is Rs.6,00,00,000/- divided into 20,00,000 equity shares of Rs.10/- each and 4,00,000 redeemable preference shares of Rs.100/- each. The present issued, subscribed and paid-up capital of the Transferor Company is Rs.30,00,000/- divided into 3,00,000 equity shares of Rs.10/- each fully paid-up and the entire share capital is held by the Transferee Company and its nominees. The objects for which the Transferor Company was incorporated as set out in its memorandum of association have been enumerated in Para No.5 of this company petition. The Transferee Company was originally incorporated under the name and style of M/s. Jayavenkatrama Sugar and Power Limited, in the State of Andhra Pradesh on 12.02.2002 under certificate of incorporation No.01-38489 of 2001-02. Later on the company had changed its name to M/s. Jayavenkatrama Industries Limited after complying with the necessary formalities under the Act and obtained a fresh certificate of incorporation on 14.08.2002 from the Registrar of Companies, Andhra Pradesh, Hyderabad. Again the company had changed its name to its present name i.e., M/s. NSL Textiles Limited after complying with the necessary formalities under the Act and obtained a fresh certificate of incorporation, consequent on its change of name on 24.09.2008 from the Registrar of Companies, Andhra Pradesh, Hyderabad. The registered office of the Transferee Company is situated at NSL ICON, Door No.8-2-684/2/A, Plot Nos.1 to 4, 4th Floor, Road No.12, Banjara Hills, Hyderabad- 500 034. The present authorised share capital of the Transferee Company is Rs.1,13,00,00,000/- divided into 11,30,00,000 equity shares of Rs.10/- each. The present issued, subscribed and paid-up capital of the Transferee Company is Rs.99,42,24,360/- divided into 9,94,22,436 shares of Rs.10/- each. The objects for which the Transferee Company was incorporated as set out in its memorandum of association have been enumerated in Para No.10 of this Company Petition. It is stated that the Transferor Company closes its financial year every year on 31st March. The audited Balance Sheet as at 31.03.2010 of the Transferor Company is annexed as Annexure-A2 to this petition. The financial year of the Transferee Company is the year ending with 31st March of each year. The Balance Sheet as at 31.03.2010 of the Transferee Company is annexed as Annexure-A4 to this petition. It is stated that the Transferor Company was incorporated for carrying on the business of Textiles etc., and it is a 100% subsidiary of the Transferee Company. The Transferee Company is also engaged in the manufacture of Textile business. By amalgamating two companies, there will be synergy of operations for both the Transferor and the Transferee Company and there will be a reduction in administrative cost and overheads and redundancies would also be eliminated. The proposed amalgamation would also bring in cost savings in the marketing, selling and distribution expenses of the Transferee Company. As the proposed scheme of amalgamation will be beneficial and advantageous in the long-term interest of both the Transferor and the Transferee Companies, the Board of Directors of both the Transferor and the Transferee Companies at their meetings held on 09.12.2010 approved the scheme of amalgamation of the Transferor Company with the Transferee Company with effect from 01.02.2011, subject to the approval/consent of the shareholders and confirmation by this Court. The salient features of the scheme of amalgamation have been enumerated in para No.14 of this company petition and a copy of the scheme has also been annexed as Annexure-A5. It is pleaded that both the Transferor Company and Transferee Company are unlisted companies and no investigations or proceedings are pending under Sections 235, 237 or other provisions of the Act or under any Act against the Transferor or Transferee Companies. While stating that the sanctioning of the scheme of amalgamation will be for the benefit of the Transferor Company, the present Application has been filed to sanction the said scheme. I have heard the learned counsel for the petitioner and perused the material available on record. By order dated 07.02.2011, this Court directed notice to the Regional Director, Ministry of Corporate Affairs, Chennai; the Registrar of Companies, Andhra Pradesh at Hyderabad and the Official Liquidator, High Court of Andhra Pradesh. Publication of notice was also ordered in Business Standard (English Daily) and Andhra Bhoomi (Telugu Daily) published from Hyderabad Editions. Accordingly, proof of publication has been filed vide USR No.382 of 2011, dated 07.03.2011. Pursuant thereto, the Official Liquidator filed a report dated 03.03.2011 pointing out that the petitioner company had not furnished the consent letters of the secured creditors for the proposed scheme of amalgamation. Learned counsel for the petitioner vide memo dated 06.04.2011 has placed before this court the ‘no objection’ given by the State Bank of Mysore, who is the only secured creditor of the applicant company, by way of letter dated 23.03.2011 stating that they have no objection for the proposed scheme of amalgamation. This Court by order dated 25.01.2011 in Company Application No.23 of 2011 dispensed with the convening of the meeting of the shareholders of the applicant company as all its shareholders had given their consent by means of affidavits. The Registrar of Companies in his affidavit did not raise any objection for the sanction for the proposed scheme of amalgamation. Having regard to the facts and circumstances noticed above and taking into consideration the fact that the scheme of amalgamation is not opposed to any provision of law or public interest, and despite notice of the admission of the company petition by paper publication, no objection whatsoever has been received from any quarter, I am of the opinion that it is a fit case for granting sanction of the scheme of amalgamation as sought by the petitioner. Accordingly, the Company Petition is allowed and the scheme of amalgamation is approved. A copy of this order shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. No costs. __________ G. ROHINI, J Date: 08.04.2011 Ivd