1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICITON COMPANY SCHEME PETITION NO.611 OF 2010 In the matter of Sections 100 to 104 of the Companies Act, 1956; And In the matter of Reduction of Equity Share Capital of Sikova Embroideries Limited Sikova Embroideries Limited, a Company } incorporated under the provisions of } Companies Act, 1956 having its Registered } Office at L.B.S. Marg, Damodar Park, } Ghatkopar (West), Mumbai 400086, } ….Petitioner CORAM: S. J. VAZIFDAR, J DATE: 19TH NOVEMBER 2010 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 Share Capital as approved by the Shareholders of the Petitioner Company in their Extra Ordinary General Meeting held on 16th August, 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 6 of the Petition, it is averred that the Petitioner Company 2 is engaged in the business of manufacturing embroideries cloth of all varieties. As per the Balance sheet and the profit and Loss account of the Petitioner Company for the financial year ended on 31st March 2010, the Petitioner has been incurring losses and as a consequence its accumulation shown in the Balance Sheet do not reflect the true potential of the company and hampers in raising funds and the said losses cannot be recovered by the company during its course of business and it would be apt for the company to write off the said losses in the Profit and loss account of the company against the paid up share capital of the company. As consequence thereof the board discussed at length the reduction of the capital of the Petitioner and writing off of the losses of the Company against the same. 5. Accordingly, an Extra Ordinary General Meeting of the Petitioner Company was held on 16th August 2010 and the following Resolution was unanimously passed as a Special Resolution: "RESOLVED THAT pursuant to the provisions of Section 100 to 104 (both inclusive) and other applicable provisions, if any, of the Companies Act, 1956, and subject to (a) the consent of the appropriate authorities, if any, and (b) the confirmation by the High Court of Judicature at Bombay and /or The National Company Law Tribunal and/or any other regulatory authority as may be prescribed under the Companies Act, 1956 in this regard and such other approvals as may be required the consent of the members of the company be and is hereby given for reduction of paid-up share capital of the company by adjusting the debit balance in profit & loss account amounting to Rs.3,50,00,000 (Rupees Three Crores Fifty Lacs only) as on 31st March 2010 against the issued subscribed and 3 paid up share capital of the company, by proportionately reducing shareholding of every shareholders of the company. RESOLVED FURTHER THAT forthwith upon reduction of capital taking effect, the paid up share capital of the company shall be Rs.1,50,00,000/- (Rupees One Crores Fifty lacs only) comprising of 1,50,000 (One Lac Fifty Thousand) Equity Shares of Rs.100/- each and that an amount of Rs.3,50,00,000/- (Rupees Three Crores Fifty Lacs only) represented by 3,50,000 (Three Lac Fifty Thousand) equity shares of Rs.100/- each be stand cancelled. RESOLVED FURTHER THAT subject to the confirmation of High Court of Judicature at Bombay and/or the National Company Law Tribunal and/or any other regulatory authority as may be prescribed under the Companies Act, 1956 in this regard, the Board of Directors of the company be and is hereby authorised to incorporate the aforesaid reduction/adjustment in the annual accounts of the Company. RESOLVED FURTHER THAT for effecting the said reduction of the paid-up share capital of the company Mr. Chandrakant Sanghavi, Chairman and/or Mr. Nimish Sanghavi, Managing Director of the company be and are hereby severally authorized to make such alterations, modification or amendments therein as may be expedient or necessary for complying with the requirement or condition imposed by the Hon’ble High Court of Judicature at Bombay and/or any other appropriate authorities. RESOLVED FURTHER THAT Mr. Chandrakant Sanghavi, Chairman and/or Mr. Nimish Sanghavi, Managing Director be and are hereby severally authorized to do all such acts, matters, deeds and things as may be necessary or desirable including any directions for settling any question or doubt or difficulty whatsoever that may arise, for the purpose of giving effect to the reduction of the share capital of the company as placed before the meeting or to any modification thereof, in particular : 4 i) To verify, sign deal, swear, affirm, declare, deliver, execute, make, enter into, acknowledge, record and perfect all deeds, declarations, instruments, affidavits, applications, petitions, objections, notices and writings whatsoever as may be usual, necessary, proper or expedite and all manner of documents, petitions, affidavits and applications in relation to the premises aforesaid; ii) To accept services of notices or other processes which may from time to time be issued in connection with the matter aforesaid; iii) To produce all documents, matters or other evidence in connection with the matters aforesaid and all and any of other proceedings incidental thereto or arising thereat; iv) To make, prepare any applications, petitions, appeals and judges summons before any court, tribunal, or all relevant authorities and respond to the appropriate authorities; v) To file the requisite applications in the Hon’ble High Court of Judicature at Mumbai for seeking directions if any required for the purpose of convening and holding a general meeting of the shareholders and / creditors whether secured or unsecured of the Company; vi) To file petitions, affidavits and / or other legal documents as may be required for confirmation of the reduction of the share capital of the Company by the Hon’ble High Court of Judicature at Mumbai; vii) To do and perform all such other acts, matters, deeds and things and sign all documents as may be necessary as may be considered or desirable to give effect to this resolution, including to appoint consultant(s) and counsel for the purpose.” 6. In light of the above, Mr. Sethi appearing for the Petitioner seeks sanction to the reduction of share capital. 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) to (c). 5 9 Petitioner to publish notices in the same newspapers 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. J. VAZIFDAR, J)