THE HON'BLE Ms. JUSTICE G.ROHINI Company Petition Nos. 13 and 14 of 2011 Dated: 15.03.2010 Company Petition No.13 of 2011 Between: Gulf Oil Corporation Limited, Hyderabad. … petitioner company Company Petition No.14 of 2011 IDL Explosives Limited, Hyderabad. … petitioner company THE HON’BLE Ms. JUSTICE G.ROHINI Company Petition Nos. 13 and 14 of 2011 COMMON ORDER: These two petitions are filed by Gulf Oil Corporation Limited and IDL Explosives Limited, respectively under Sections 391 to 394 of the Companies (Court) Rules, 1959 for sanction of the Scheme of Arrangement between the applicant companies. The petitioner in C.P.No.13 of 2011 is Gulf Oil Corporation Limited. The said company was incorporated as Indian Detonators Limited on 20.04.1961 under the provisions of the Companies Act, 1956. Thereafter, the name of the petitioner company was changed to IDL Chemicals Limited vide a certificate o incorporation consequent to a change of name issued on 14.05.1974. On 31.10.1995, the name of the petitioner company was changed from IDL Chemicals Limited to IDL Industries Limited. On 22.08.2002 the name of the petitioner company was changed from IDL Industries Limited to its present name, Gulf Oil Corporation Limited. The registered office of the petitioner company is situated at Kukatpally, Post Bag No.1, Sanathnagar (I.E.) P.O., Hyderabad, 500018. The authorized share capital of the petitioner company as on 31.03.2010 is Rs.25,00,00,000/- divided into 12,50,00,000 equity shares of Rs.2/- each. The issued, subscribed and paid-up share capital of petitioner company as on 30.09.2010 is Rs.19,82,89,960/- divided into 9,91,44,980 equity shares of Rs.2/- each. The main objects of the said company as set out in the memorandum of association are mentioned in para 5 of C.P.No.13 of 2011. The petitioner in C.P.No.14 of 2011 is IDL Explosives Limited. The said company was incorporated under the provisions of the Companies Act, 1956 on the 33.09.2010 The registered office of the petitioner company is situated at Kukatpally, P.O.Bag No.1, Sanathnagar (IE) PO, Hyderabad-500018. The Authorised share capital of petitioner company as on 30.09.2010 is Rs.5,00,000/- divided inot 50,000 equity shares of Rs.10/- each. The issued, subscribed and paid up share capital of the petitioner company as on 30.11.2010 is Rs.5,00,000/- divided into 50,000 equity shares of Rs.10/- each. The entire issued, subscribed and paid up share capital is held by Gulf Oil and its nominees. The main objects of the said company as set out in the memorandum of association are mentioned in para 5 of C.P.No.14 of 2011. It is stated that Gulf Oil Corporation Limited is engaged in various business activities comprising manufacture of explosives and detonators, lubricants, speciality chemicals, contract mining and infrastructures, floriculture and property development. The nature of competition and risk involved in each of the business is distinct from each other and each business is capable of attracting strategic partners, investors and lenders. In order to enable distinct focus to the operation of speciality chemicals business of Gulf Oil, Gulf Oil proposes to reorganize and segregate by way of demerger its speciality chemicals business to IDL Explosives Limited and take over the agro business of IDL Explosives Limited as it will synergise the operations with its earlier floriculture business activity and would improve administrative efficiency. It is submitted that to ensure accelerated growth and improved profitability in the specific areas of operation, it would be advantageous to reorganize the company and demerge the specific business undertakings. The demerger of the Explosives undertaking will provide as a measure of corporate restructuring and to develop potential for future growth and diversification to have better synergy and optimisation of resources as well as to facilitate fund raising and development of the Explosives undertaking both vertically and laterally in related sectors. In view of the advantages of the scheme of arrangement, the Board of Directors of both the companies at their respective meetings held on 30.10.2010 approved the scheme of arrangement between the companies and their respective shareholders and creditors subject to the approval/consent by the shareholders and confirmation by this Court. The copies of the resolutions passed by the Board of Directors of both the companies are enclosed to the company petitions. It is stated that by order dated 22.12.2010 in C.A.No. 1493 of 2010, this Court directed the meeting of the equity shareholders of the Gulf Oil Corporation Limited for the purpose of consideration of Scheme of Arrangement. Accordingly, the meeting of the equity shareholders was held on 21.01.2011 and the Scheme of Arrangement was approved by a majority of 97.8%. A copy of the report filed by the Chairperson appointed for the said meeting was enclosed to the company petition as Annexure P.11. Similarly, so far as the unsecured creditors are concerned, this Court by order dated 22.12.2010 in C.A.No.1494 of 2010 directed that the meeting shall be held on 21.01.2011 at 2.00 P.M. Accordingly, the meeting was held on 21.01.2011 after serving individual notices to the unsecured creditors apart from publication in the “Business Standards” and “Andhra Bhumi”. The proposed Scheme of Arrangement was approved by the unsecured creditors in the said meeting unanimously. A copy of the report filed by the Chairperson of the said meeting has been enclosed to the company petition as Annexure P.12. It is further stated that this Court by order dated 22.12.2010 made in C.A.No.1495 of 2010 dispensed with the meeting of the secured creditors of the petitioner company having regard to the fact that there are only 9 secured creditors and all of them had given their consent to the proposed Scheme of Arrangement. In C.P.No.14 of 2011 filed by the IDL Explosives Limited, it is explained that this Court by order dated 20.12.2010 in C.A.No.1496 of 2010 dispensed with the convening of the meeting of the shareholders of the said company on the basis of the consent given by all the shareholders. It is further stated that M/s. IDL Explosives Limited has no secured or unsecured creditors since the said company was incorporated only in the month of September, 2010. In the light of the facts and circumstances narrated above, these applications are filed with a prayer to sanction the proposed Scheme of Arrangement since the same is bound to benefit the shareholders and other stakeholders of the petitioner companies. I have heard Sri Ravi, learned senior counsel appearing for the applicants and perused the affidavits filed in support of the company applications as well as the annexures enclosed to the applications. As noticed above, the Board of Directors of both the companies had approved the scheme of arrangement in view of the advantages of the scheme. A perusal of the enclosures shows that the shareholders of both the companies as well as the creditors of the Gulf Oil Corporation Limited had approved the proposed Scheme of Arrangement and there are no secured or unsecured creditors to the IDL Explosives Limited. In view of the fact that the proposed Scheme of Arrangement has been approved by the Board of Directors, shareholders as well as the creditors and more over no objections have been received in response to the paper publication given, particularly the scheme being in the best interest of the companies and is not opposed to any provision of law or public interest, I am of the considered opinion that this is fit case where the Scheme of Arrangement can be sanctioned. Accordingly, the proposed Scheme of Arrangement is hereby sanctioned and the same shall be binding on all the shareholders. 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. The certified copy of this order shall be filed before the Registrar of Companies within 30 days from the date of this order. Accordingly, the company applications are allowed. No costs. _____________ G. ROHINI, J Date: 15.03.2011 KLP