THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Company Petition No.179 of 2011 12th December, 2011 Between :- M/s.Radix Industries (India) Limited, Regd.Office at 4-243, Chivatam, Near NH-5 Road, Tanuku, West Godavari District, Andhra Pradesh, Rep.by its Managing Director – G.Raghu Rama Raju .. Petitioner THE HON'BLE SRI JUSTICE B.SESHASAYANA REDDY Company Petition No.179 of 2011 ORDER:- This petition has been taken out by M/s.Radix Industries (India) Limited under Sections 391 and 394 of the Companies Act, 1956 for sanction of the Composite Scheme of Arrangement. The petitioner – Company was incorporated on 23-12-1993 under the name and style of M/s.Ragsan Petrochem Limited in the State of Andhra Pradesh under the Companies Act, 1956. The Company obtained Certificate for Commencement of Business on 3-1- 1994. The Company changed its name to “Radix Industries (India) Ltd.” and obtained fresh Certificate of Incorporation from the Registrar of Companies, Andhra Pradesh, Hyderabad, on 24-8-2010. The Registered Office of the Company is situated at Door No.4-243, Chivatam, Near NH-5 Road, Tanuku, West Godavari District, Andhra Pradesh. The Authorized Share capital of the Company is Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/- each. The Issued and Subscribed capital of the Company is Rs.7,70,08,000/- divided into 77,00,800 equity shares of Rs.10/- each. The Paid-up capital of the Company is Rs.3,54,78,000/- divided into 35,47,800 equity shares of Rs.10/- each. The objects of the Company are:- to carry on the business as manufactures, producers, processors, makers, inventors, designers, converters, repairers, cleaners, importers, exporters, traders, buyers, sellers, retailers, wholesalers, suppliers, indenters, packers, sockiest, agents, sub-agents, merchants, distributors, consignors, jobbers, brokers, concessionaires or otherwise deal in all kings of Hair, Hair Products, Wigs, Hairdressing, Hair nets etc., producing oils from any kind of hair. The Company had incurred losses from the year 1995 to 2000. The entire Net Worth was eroded. As on 30-4-2011 the Accumulated Losses stood at Rs.5,52,92,658/-. Therefore the Company proposed restructure of the share capital by reducing the share value of Rs.10/- to Rs.1/- and consolidate the same after reduction into shares of Rs.10/- each. The proposed arrangement/restructuring, according to the applicant Company, is to start commercial operations and improve its net worth to raise capital both in the form of Equity through Preferential Allotment and Debt from financial institutions and Banks. In view of the advantages of the composite scheme of arrangement, the Board of Directors of the petitioner – Company in the meeting held on 11-5- 2011 approved the Composite Scheme of Arrangement w.e.f, 1-4-2010 subject to the approval/consent of the shareholders and confirmation by this Court. The meeting of the shareholders has been convened by the Chair Person appointed by this Court as per orders in C.A.No.953 of 2011 and proceedings of the meeting have been placed on record. As per the report of the Chair Person, dated 28-9-2011, all the shareholders voted in favour of the Scheme of Arrangement. There are no secured creditors of the petition – Company. Unsecured creditors of the petitioner – Company placed on record their affidavits consenting for the proposed Scheme of Arrangement. Photostat copies of the affidavits find place at page Nos.81 to 88. Hence, this petition seeking the prayer stated supra. The Company Petition came to be admitted on 20-10-2011. The petitioner was directed to take out notice of hearing of the petition by way of publication in “The Indian Express” (English Daily, published from Rajahmundry and “Eenadu” (Telugu Daily) of West Godavari edition, published from Eluru and file proof of publication. Accordingly, the petitioner took out publication and filed copies of the same as proof. The petitioner was also directed to take out notice to the Regional Director, South Eastern Region, Ministry of Corporate Affairs, Kendriya Sada, Sultan Bazar, Koti, Hyderabad. The Regional Director, South Eastern Region, Ministry of Corporate Affairs, Hyderabad, has placed on record his affidavit. No objections have been raised for the proposed Scheme of Arrangement. Heard learned Counsel appearing for the petitioner and perused the material brought on record. Learned Counsel appearing for the petitioner submits that as per the Scheme of Arrangement, the share capital of the petitioner Company has been reduced to Rs.35,47,800/-. Para 5 of Part-III (Reduction of Capital) of the Scheme reads as hereunder:- “As this is a scheme of arrangement under Section 391 to 394 of the Act between the Company and its members and on approval of the said scheme by the shareholders, it is deemed that the special resolution under Article 3 of the Articles of Association of the Company and Section 100 of the Companies Act, has been passed and all the procedure required under Section 100 for reduction of share capital has been deemed to have been complied with by the Company and it shall not be required to add the words “and reduced” as suffix to the name of the Company.” Since the reduction of share capital is part and parcel of the Scheme, it is deemed that provisions of Section 100 of the Companies Act, 1956 have been complied with. No objections have been received from any quarter opposing the proposed Scheme of Arrangement. The scheme appears to be fair and reasonable and it does not contravene any of the provisions of the Companies Act, 1956 or Rules framed there- under. Accordingly, the Company Petition is Allowed. The parties to the Scheme of Arrnagement or other persons interested shall be at liberty to apply for any directions that may be necessary in regard to the working of the Scheme of Arrangement. The petitioner do lodge an authenticated copy of the scheme and copy of this order with the Registrar of Companies within 30 days from the date of the order. The petitioner shall pay a sum of Rs.5,000/- (Rs.Five thousand only) to the Regional Director, Ministry of Corporate Affairs, South East Region, Hyderabad. __________________________ B.Seshasayana Reddy, J 12th December, 2011 smr