THE HON'BLE Ms. JUSTICE G.ROHINI COMPANY PETITION No.192 OF 2010 AND COMPANY PETITION No.193 OF 2010 Dated: 22.12.2010 COMPANY PETITION No.192 OF 2010 Between: M/s. Food Fats & Fertilizers Limited ..... Petitioner COMPANY PETITION No.193 OF 2010 Between: M/s. 3f Oil Palm Agro Tech Private Limited ..... Petitioner The Court made the following : THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY PETITION No.192 OF 2010, AND COMPANY PETITION No.193 OF 2010. COMMON ORDER : These two petitions are filed under Sections 391 and 394 of the Companies Act, 1956 for sanction of the Scheme of Arrangement between the petitioner companies. The petitioner in C.P.No.192 of 2010 is M/s. Food Fats & Fertilizers Limited (hereinafter referred to as ‘FFFL/Transferor Company’). The said company was originally incorporated as a Private Limited Company under the name and style of M/s. Foods Fats & Fertilizers Private Limited on 10.05.1960 under Certificate of Incorporation No.U24120 AP 1960 PLC 000888 in the State of Andhra Pradesh. Later on the company converted itself into a Public Limited Company after complying with necessary formalities under Companies Act, 1956 and a fresh Certificate of Incorporation consequent on change of name was issued by the Registrar of Companies, Andhra Pradesh, Hyderabad on 13.5.1966. The registered office of FFFL/Transferor Company is situated at Post Box No.15, Tanuku Road, Tadepalligudem, West Godavari District, Andhra Pradesh, India. The authorized share capital of the FFFL/Transferor Company is Rs.13,00,00,000/- divided into 1,30,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up share capital of the company is Rs.10,61,67,250/- divided into 1,06,16,725 equity shares of Rs.10/- each. The main objects of FFFL/Transferor Company is to carry on the business of oil seed growers, seed growers, seed crushers, Rice and other Cereal Millers, manufacture of oil from groundnut, linseed, cotton seeds, rice barn and other oil cakes, oil extraction by crushing by chemical or any other processes, cake and oil manufacturers, oil refiners, manufacturers of hydrogenated ghee and all other similar and allied products etc., (morefully described in para-5 of C.P.No.192 of 2010). The petitioner in C.P.No.193 of 2010 is M/s. 3f Oil Palm Agrotech Private Limited (hereinafter referred to as ‘3f/Transferee Company’). The said company was incorporated as Private Limited Company under the name and style of M/s. 3f Oil Palm Agrotech Private Limited on 20.07.2010 in the State of Andhra Pradesh. Its Corporate Identity Number is U15400AP2010PTC069556. The registered office of the 3f/Transferee Company is situated at 6-3-569/2, First Floor, Rockdale, Somajiguda, Hyderabad. The authorised share capital of 3f/Transferee Company is Rs.7,00,00,000/- divided into 7000000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. The main objects of the 3f/Transferee Company is to carry on the business of oil seed growers, seed- crushers and other cereal millers, manufacture of oil cakes and oil extraction by crushing or by chemical or any other processes (morefully described in para-5 of C.P.No.193 of 2010). It is stated that the Transferor Company proposes to focus on the oil palm vertical in a professional and focused manner and thus proposes to demerge Oil Palm Division to the Transferee company. Subsequent to demerger, the Transferee Company would develop long term corporate strategies and financial policies specifically with respect to the Oil Palm business, thus enabling better management and accelerated growth of the Oil Palm business and provide better visibility to the shareholders of the businesses of the Transferor and Transferee Company thereby enhancing shareholder value. Further the proposed demerger would result in improving the operational efficiencies, provide better access to different financing avenues, for both Transferor and Transferee Company. Further the proposed demerger would act for the benefit of the shareholders, creditors and employees and would subserve their interests with further growth. In view of the advantages of Scheme of Arrangement, the Board of Directors of the Transferor and Transferee Companies at their meetings held on 2.8.2010 and 1.8.2010 respectively, have approved the Scheme of Arrangement between the Transferor Company and the Transferee Company and their respective shareholders w.e.f. 1.8.2010 and to do such acts and deeds as are necessary, subject to the approval/consent of the shareholders and confirmation by this Court. The Scheme of Arrangement has been enclosed to the Company Petitions and its salient features have been enumerated in para-14 of the Company Petitions. By order dated 23.08.2010 in C.A.No.667 of 2010, this Court directed the meeting of the shareholders, secured and unsecured creditors of the Transferor Company on 25.09.2010 for the purpose of considering the proposed Scheme of Arrangement and appointed a practising advocate as Chairman to preside over the meetings. Accordingly, notice was sent individually to all the equity shareholders, secured and unsecured creditors and meetings were held on 25.09.2010. The equity shareholders meeting was attended by 2 members personally holding shares valued at Rs.2670/- divided into 267 equity shares of Rs.10/- each and 18 members by proxies holding shares valued at Rs.4,99,74,460/- divided into 4997446 equity shares of Rs.10/- each aggregating to value of Rs.4,99,77,130/- divided into 49,97,713/- equity shares of Rs.10/- each out of the issued, subscribed and paid up capital of the company of Rs.10,61,67,250/- divided into 10616725 equity shares of Rs.10/- each fully paid up. The secured creditors meeting was attended by 6 secured creditors personally holding amount of Rs.7422.65 lakhs out of value of Rs.10934.30 lakhs. The unsecured creditors meeting was attended by 27 unsecured creditors personally holding amount of Rs.71,80,741/- and 22 unsecured creditors by proxies holding amount of Rs.24,67,000/- aggregating to amount of Rs.96,47,741/- out of total value of Rs.29,93,14,587/-. The shareholders, secured creditors and unsecured creditors of the Transferor Company had passed resolutions approving the proposed Scheme of Arrangement and the same was reported to this Court on 4.10.2010. So far as the Transferee Company is concerned, by order dated 23.08.2010 in C.A.No.668 of 2010 this Court had dispensed with the convening of the meeting of the shareholders as all the shareholders had given their no objection for the proposed Scheme of Arrangement by means of affidavits. It is stated that the Transferee Company had not borrowed any secured or unsecured loans. Both the Transferor and Transferee Companies are unlisted companies and no investigation or proceedings are pending under Sections 235 and 237 of the Companies Act, 1956 or other provisions of the Act against the Transferor or Transferee Companies. Hence the present petitions for sanction of the proposed Scheme of Arrangement. I have heard Sri V.S. Raju, the learned counsel for the petitioners as well as the Assistant Solicitor General of India; and perused the material placed before this Court. In response to the notice ordered by this Court, the Registrar of Companies filed a common affidavit raising only one objection as under: “The Transferee Company should pay the stamp duty as per the Regulations of the A.P. Stamp Act.” As could be seen from the material available on record, the shareholders as well as the secured and unsecured creditors of the Transferor Company as well as the shareholders of the Transferee Company had consented to the proposed Scheme of Arrangement. It is also relevant to note that despite the notice of admission of these company petitions by paper publication, no objections whatsoever have been received from any quarter. So far as the only objection raised by the Registrar of Companies regarding the stamp duty is concerned, it is made clear that the Transferee Company is bound to pay the stamp duty at appropriate time. Having regard to the facts and circumstances of the case, particularly keeping in view the Scheme of Arrangement is in the best interest of the petitioner companies and their respective shareholders and creditors and moreover it is not opposed to any provision of law or public interest, I am of the opinion that it is a fit case where the Scheme of Arrangement as proposed can be sanctioned. Accordingly, the Scheme of Arrangement as approved by the Board of Directors of the Transferor Company as well as the Transferee Company in the meeting of their respective Board of Directors is hereby sanctioned and it is declared that the same is binding on all the shareholders, creditors and employees of the companies. The parties to the Scheme of Arrangement or other persons interested shall be at liberty to apply to this Court for any directions that may be necessary in regard to the working of the Scheme of Arrangement. A certified copy of this order shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. The petitioner Companies shall pay a sum of Rs.3,000/- each to the Assistant Solicitor General of India towards fee. Both the Company Petitions are accordingly allowed. No costs. _____________ G. ROHINI, J. Dt. 22.12.2010 Ivd