THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Petition Nos.146 and 147 of 2011 (Dated :05-09-2011) Between: M/s. Biological E Limited, rep. by its Chairman & Managing Director Dr.Vijay Kumar Datla (Petitioner ion Company Petition No.146 of 2011) M/s. Biona Health Care Private Limited Rep. by its Retainer Ms.T.Chaityanya (Petitioner ion Company Petition No.147 of 2011) ….Petitioners THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Petition Nos.146 & 147 of 2011 COMMON ORDER: These two Company Petitions have been filed under Sections 391 and 394 of the Companies Act, 1956 seeking sanction to the scheme of arrangement. 2. More precisely; Company Petition No.146 of 2011 is filed by M/s. Biological E Limited (in short, `Transferor Company’) and Company Petition No.147 of 2011 is filed by M/s. Biona Health Care Private Limited ( in short, `Transferee Company’). 3. The Transferor Company was originally incorporated as a private limited company under the name and style of M/s. Biological Products Private Limited on 10th December 1953 in the State of Maharashtra at Bombay. Later, the Transferor Company changed its name to Biological Evans Private Limited and obtained a fresh certificate of incorporation. Subsequently, the Transferor Company had changed its registered office from the State of Maharashtra to the State of Andhra Pradesh and obtained a fresh certificate of incorporation. 4. The authorized share capital of the Transferor Company is Rs.50,000,000/- divided into 500,000 equity shares of Rs.100/- each. The issued, subscribed and paid up share capital of the Transferor Company is Rs.4,95,00,000/- divided into 4,95,000 equity shares of Rs.100/- each. The main objects of the Transferor Company are to carry on business as manufacturers of and dealers in pharmaceutical, medicinal, herbal, bacteriological, biological, chemical, industrial and other preparations, articles and compounds etcetera, more fully described in para (5) of the company Petition No.146 of 2011. 5. The Transferee Company was incorporated as a Private Limited Company under the name and style of M/s. Biona Healthcare Private Limited on 10th December 1999 in the State of Andhra Pradesh under Corporate Identity Number U24230AP1999PTC033023. The authorized share capital of the Transferee Company is Rs.5,00,000/- divided into 50,000 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 Transferee Company are to carry on all or any of the business of manufacturing chemicals, wholesale and retail druggists, exporters and manufacturers, makers , refiners, processors of formulations of, and traders and dealers and therapeutic preparations, substances, materials and articles of all kinds and classes, etcetera, more fully described in para (5) of the company petition No.147 of 2011. 6. Both the Transferor and Transferee companies are engaged in the business of similar activity. The Transferor company is engaged in the business of pharmaceuticals, drugs, intermediates drugs, formulations, vaccines etcetera. PV Vaccine business, according to the petitioners, being a high growth business requires focused leadership and management attention for development and needs further investment to utilize its full potential. In order to enable PV Vaccine to raise funds and make its business independent, it is proposed to demerge the business of Vaccine business into transferee company. Further, the demerger will also provide greater business focus to both the Companies and would assist in induction of joint venture partner and pursue organic and inorganic growth opportunities in vaccine industry. 7. The Board of Directors of the Transferor and Transferee Companies in their respective meetings held on 24-3-2011, have approved the scheme of arrangement, subject to the approval/consent of the shareholders and confirmation by this Court. 8. A Chairperson came to be appointed to convene the meeting of the shareholders and unsecured creditors of the Transferor Company, as per the orders dated 30-04-2011 passed in Company Application No.578 of 2011. The chair-person conducted the meeting and placed on record his report. The report of the Chairperson indicates that the shareholders as well as unsecured creditors proposed to amend Clause 3.1.2 under Part.II of the scheme, i.e., the appointed date as 1st of April, 2011 instead of 1st of April, 2010 and Clause 11.1 (i) and 11.2(i) under Part III of the scheme, i.e., Accounting treatment, the words March 31, 2010 shall be substituted with words March 31, 2011 since the financial year 2010-2011 has already come to a close. The report of the Chairperson has been taken on record. 9. The secured creditors of the Transferor Company have placed on record their consent letters, which find place at Page No.160 to 163 of the Company Petition No.146 of 2011. 10. The meeting of the shareholders of the Transferee Company came to be dispensed with, as per the orders dated 30-4-2011 passed in Company Application No.579 of 2011. The Transferee Company had no secured creditors and it placed on record No Objection letters from the unsecured creditors along with a Memo dated 5-9-2011. The unsecured creditors of the Transferee Company are M/s. Biotech Medicals Pvt. Ltd., M/s. V.R.Investments and Finance Pvt. Ltd., and Mahima Trust. These three unsecured creditors consented to the proposed scheme of arrangement. 11. These two company petitions came to be admitted on 27.7.2011. The petitioners were directed to take out notice to the Regional Director, South East Region, Ministry of Corporate Affairs, Kendriya Sadan, Sultan Bazar, Koti, Hyderabad. The petitioners were also directed to take out publication in “BUSINESS STANDARD” English daily, Andhra Pradesh and of “ANDHRA BHOOMI” telugu daily of Hyderabad edition indicating the date of hearing as 29-8- 2011. The petitioners took out publication and placed on record copies of proof publication. 12. The Regional Director, (South Eastern Region), Hyderabad has placed on record a common affidavit. It is stated in the affidavit that the Transferee Company shall pay stamp duty under the provisions of Andhra Pradesh Stamp Act, and regulations therein read with Articles 20(d) of Schedule 1-A of the Indian Stamp Act, 1899, as applicable to the State of Andhra Pradesh. 13. Heard learned Counsel appearing on behalf of the petitioners and the learned Assistant Solicitor General appearing on behalf of the Central Government. 14. The scheme as proposed is beneficial to the Transferor Company as well as the Transferee Company and to their shareholders and employees. From the material on record, the scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to the public policy. 15. Having considered the report of the Regional Director, South Eastern Region and there being no opposition from any quarter for the proposed scheme and as all the statutory compliances have been fulfilled, I do not see any impediment in granting sanction to the scheme of arrangement as proposed by the petitioners. 16. Accordingly, these Company Petitions are allowed sanctioning the scheme of arrangement, subject to the Transferee Company paying stamp duty as per the provisions of the Andhra Pradesh Stamp Act read with Article 20(d) of Schedule 1-A of the Indian Stamp Act, 1899. The parties to the scheme or other persons interested shall be at liberty to apply to this Court for any directions that may be necessary in regard to working of the scheme and the petitioners do lodge an authenticated copy of this order with the Registrar of Companies within 30 days from today. The petitioners in both the company petitions are to pay costs of Rs.5,000/- each to the Regional Director (South Eastern Region), Hyderabad. Costs are to be paid within four weeks from today. _____________________ B.SESHASAYANA REDDY, J Dt.05-09-2011 RAR