1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO 706 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO 760 OF 2010 In the matter of Companies Act, 1956 (1 of 1956) And In the matter of Sections 100 to 103 read with Section 78 of the Companies Act, 1956 And In the matter of Reduction of Equity Share Capital and Share Premium Account of Gunnebo India Limited Gunnebo India Limited, a company incorporated ) under the provisions of the Indian Companies Act, ) 1913, having its registered office at Unit No.102, ) Akruti SMC, LBS Road, Khopat, ) Thane West – 400 601 )……Petitioner Company CORAM: S. C. DHARMADHIKARI, J DATE: 28TH JANUARY 2011 Mr. Hemant Sethi i/b Hemant Sethi & Co., Advocates for the Petitioner P.C.: 1. Heard the learned counsel for the Petitioner. 2. This is a petition for seeking approval for reduction of Equity Share Capital and Share Premium Account as approved by the Equity Shareholders of the Petitioner Company in their Annual General Meeting 2 held on 2nd November, 2010. 3. The Petitioner has complied with all statutory requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, the Petitioner Company undertakes to comply with statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made thereunder. The undertaking is accepted. 4. In paragraph 7 of the Petition, it is averred that the Petitioner Company is engaged in the business of selling physical security products, fire extinguishers, fire fighting equipment and electronic security systems. The Petitioner Company has accumulated losses in its books of accounts as on 31st March, 2010. In view of the accumulated losses the management of the Petitioner Company proposed capital restructuring. 5. Accordingly, at an Annual General Meeting of the Petitioner Company held on 2nd November 2010 following Resolution was unanimously passed as a Special Resolution: RESOLVED THAT pursuant to provisions of Section 78 and Sections 100 to 103 of the Companies Act, 1956 (including any statutory modification or re-enactment thereof, for the time being in force) and other applicable provisions, if any of the Companies Act, 1956, enabling provisions in the Memorandum and Articles of Association of the Company and subject to the confirmation by the Hon’ble High Court of Judicature at Bombay and consent/approval of other concerned authorities, if any: a) the issued, subscribed and paid-up equity share capital of the Company as on the date of approval of this resolution by the shareholders in the General Meeting and the 12,000,000 equity shares of Rs. 10/- each fully paid-up issued pursuant to conversion of 7% Fully Convertible Cumulative Preference Shares of Rs. 120,000,000/- aggregating to 14,971,655 equity shares of Rs. 10/- each fully paid-up, shall stand reduced from Rs. 149,716,550/- 3 (divided into 14,971,655 equity shares of Rs. 10/- each fully paid- up) to Rs. 598,866.20 (divided into 14,971,655 equity shares of Rs. 0.04 each paid-up) and that such reduction be effected by cancelling the paid-up equity share capital which have been lost or is unrepresented by available assets, to the extent of Rs. 9.96 per share upon each of the 14,971,655 equity shares which have been issued and by reducing the paid-up value of all the equity shares in the Company’s paid-up share capital from Rs. 10/- to Rs. 0.04 per share, and the same be utilized together with; b) the amount standing to the credit of General Reserve Account of Rs. 110,193,925/- as on 31st March 2010; and c) the amount standing to the credit of Share Premium Account of Rs. 18,551,398/- as on 31st March 2010; be utilized to set-off the accumulated losses of Rs. 277,863,006.80 of the Company (the debit balance in the Profit & Loss Account), which stood at Rs. 278,135,547/- as on 31st March 2010. RESOLVED FURTHER THAT subject to the necessary provisions of the Companies Act, 1956, and upon approval of the Hon’ble High Court of Judicature at Bombay to the capital reduction and the approval of the Reserve Bank of India for modification of the terms of issue of 7% Fully Convertible Cumulative Preference Shares (‘CCPs’), thereby 12,000,000 CCPs of Rs. 10/- each be converted into 12,000,000 equity shares of Rs.10/- each. RESOLVED FURTHER THAT the Company shall, simultaneously with the reduction of equity capital consolidate 250 numbers of equity shares of Rs. 0.04 each into 1 equity share of Rs. 10/- each fully paid- up, the equity share capital of the Company, ignoring fractional entitlement upon, consolidation shall stand at Rs. 598,800/- divided into 59,880 equity shares of Rs. 10/- each fully paid-up. RESOLVED FURTHER THAT no part of the aforesaid reduction in the Equity Capital, Share Premium Account and General Reserve Account, as mentioned above shall be refunded/returned/paid to any of the shareholder or any other person in cash or in kind (except shareholders entitled to fractional entitlement) nor will there be any diminution of liability in respect of unpaid capital, if any. RESOLVED FURTHER THAT the shareholders becoming entitled to fractional shares pursuant to aforesaid reduction and consolidation in capital will be eligible to receive cash consideration of Rs. 10/- each per share on every one equity share held by such fractional shareholders, before giving effect to the aforesaid consolidation and 4 such payment shall be in pursuant to the provisions of Sections 100 to 103 of the Companies Act, 1956. RESOLVED FURTHER THAT on approval of the reduction as above by all the relevant authorities, the Board of Directors be and is hereby authorised to issue fresh share certificates in accordance with Companies (Issue of Share Certificate) Rules, 1960 to the members entitled thereto and upon such issue or on dispatch of consideration to the fractional entitlement holder, all the existing share certificates of the Company shall stand cancelled without any further act or deed RESOLVED FURTHER THAT consequential amendments to the capital clauses of the Memorandum and Articles of Association of the Company be made after the said resolution becomes operative and effective. RESOLVED FURTHER THAT any one Director or Secretary of the Company be and is hereby authorised on behalf of the Board of Directors, inter alia, to: a) do all such acts, deeds and things as may be expedient or necessary, particularly for satisfying the requirements or conditions imposed by any authorities including, the Hon’ble High Court of Judicature at Bombay; b) file all necessary documents with the relevant / concerned authorities for the purpose of complying with the applicable laws; c) settle any question or difficulty that may arise with regard to the implementation of the above reduction, and to give effect to the resolution; d) sign and file any and all application(s) / petition(s) to the Hon’ble High Court of Judicature at Bombay for necessary directions confirming the reduction; e) file all pleadings, reports, and sign and issue public advertisements and notices; and f) to do all such other acts, deeds, matters and things incidental to the above and to engage any legal advocate(s) / counsel(s) and to remunerate them. 6. In light of the above, Mr. Sethi appearing for the Petitioner seeks sanction to the reduction of Equity Share Capital and Share Premium Account. 7. All the provisions of law appear to have been complied with. 8. The Petition is accordingly made absolute in terms of prayer clauses (a) & 5 (b). 9. Petitioner to publish notices in the “Free Press Journal” and “Maharashtra Times”, Mumbai Editions and also in the Maharashtra Government Gazette about the registration of Order and minutes of reduction by the concerned Registrar of Companies. 10. Filing and issuance of drawn up order is dispensed with. 11. All concerned parties to act on an ordinary copy of this order and the Form of Minutes annexed to this Petition. (S. C. DHARMADHIKARI, J)