Allowed

Vst Distribution,Storage and Leasing Private Ltd. v. -

Telangana HC16 Mar 2011CP/15/2011

Case brief

AI extract

What is this about?

In a company petition for sanctioning a scheme of arrangement under Sections 391-394 of the Companies Act, 1956, between VST Distribution (Transferor) and VST Industries (Transferee), the court found the affairs of the Transferor not conducted prejudicially to member interests. With no objections raised and no creditors involved, the court approved the scheme of arrangement.

What did the court decide?

The Company Petition is allowed and the scheme of arrangement between the Transferor and Transferee Companies is approved/sanctioned.

Vst Distribution,Storage and Leasing Private Ltd. Vs - — Company and Corporate | Telangana HC (2011)

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THE HON’BLE Ms. JUSTICE G. ROHINI

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COMPANY PETITION No.15 of 2011

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Dated: 16.03.2011

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Between :

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VST Distribution, Storage & Leasing Company Private Limited

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…… Petitioner Company

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The Court made the following:-

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THE HON’BLE Ms. JUSTICE G. ROHINI

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COMPANY PETITION No.15 of 2011

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ORDER :

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The petitioner herein is VST Distribution, Storage and Leasing Company Private Limited (hereinafter referred to as the ‘Transferor Company). This petition is filed under Sections 391 to 394 of the Companies Act, 1956 (for short, ‘the Act’) with a prayer to sanction the scheme of arrangement of VST Distribution, Storage and Leasing Company Private Limited with VST Industries Limited (hereinafter referred to as the ‘Transferee Company’).

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The Transferor Company was incorporated under the provisions of the Act on 22.08.1981, vide Company Registration No. 3156 as evidenced by the certificate of incorporation dated 22.08.1981. The Transferor Company is a wholly owned subsidiary of the Transferee Company. The registered office of the Transferor Company is situated at 1-7-1063/1065, Azamabad, Hyderabad- 500 020. The authorised share capital of the Transferor Company as on 31.03.2010 was Rs.5,00,000/- divided into 50,000 equity shares of Rs.10/- each and Rs.25,000/- divided into 2,500 11% cumulative

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redeemable preference shares of Rs.10/- each. The issued, subscribed and paid-up capital of the Transferor Company as on 31.03.2010 was Rs.5,00,000 divided into 50,000 equity shares of Rs.10/- each, fully paid-up, which is entirely held by the Transferee Company. The objects for which the Transferor Company was incorporated as set out in its memorandum of association have been enumerated in Para No.5 of this company petition.

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The Transferee Company was incorporated under the Hyderabad Companies, Act No.IV of 1320 of Fasli on 10.11.1930 under the name of the Vazir Sultan Tobacco Company Limited with certificate of incorporation No.2. The name of the Transferee Company was changed to its present name i.e., VST Industries Limited and a fresh certificate of incorporation was issued by the Registrar of Companies, Andhra Pradesh on 15.09.1983 vide Company Registration No.576. The registered office of the Transferee Company is situated at 1-7-1063/1065, Azamabad, Hyderabad- 500 020, and is the holding company of the Transferor Company. The authorised share capital of the Transferee Company as on 31.03.2010 was Rs.50,00,00,000/- divided into 5,00,00,000 equity shares of Rs.10/- each and Rs.50,00,00,000/- divided into 50,00,000 cumulative redeemable preference shares of Rs.100/- each. The issued, subscribed and paid-up capital of the Transferee Company was Rs.15,44,19,200/- divided into 1,54,41,920 equity shares of Rs.10/each. The objects for which the Transferee Company was incorporated as set out in its memorandum of association have been enumerated in Para No.10 of this Company Petition.

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The Transferee Company is the 100% holding company of the Transferor Company and is interested in the acquisition of the business carried on by its wholly owned subsidiary ultimately through the scheme of arrangement. The Transferee Company is financially and technically sound and equipped to continue the business carried

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on by the company after the present scheme of arrangement is given effect to. The Transferee Company has recorded a turnover of Rs.1125.42 crores and a net profit after tax of Rs.62.05 crores during the financial year ended March 31,2010.

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The Board of Directors of the Transferor Company has at its meeting held on 12.01.2011 passed a resolution approving the scheme of arrangement between the Transferor Company and the Transferee Company and their respective shareholders. Similarly, the Board of Directors of the Transferee Company has approved the said scheme of arrangement in their meeting held on 13.01.2011. The salient features of the scheme of arrangement have been enumerated in para No.15 of this company petition and a copy of the scheme has also been annexed as Ex.IV.

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The financial year of the Transferor Company is the year ending with 31^st March of each year. The audited accounts of the Transferor Company for the year ending 31.03.2010 were duly approved by the shareholders at its Annual General Meeting held on 15.07.2010 and a certified copy of the Annual Report for the year ended on 31.03.2010 is annexed as Ex.V to this petition.

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The financial year of the Transferee Company is the year ending with 31^st March of each year. The audited accounts of the Transferee Company for the year ending 31.03.2010 were duly approved by the shareholders at its Annual General Meeting held on 16.07.2010 and a certified copy of the Annual Report for the year ended on 31.03.2010 is annexed as Ex.VI to this petition.

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The scheme neither proposes any arrangement with secured creditors nor unsecured creditors of the Transferor Company. The Transferor Company has no secured creditors or unsecured creditors as certified by M/s. M.Bhaskara Rao & Company, Chartered Accountants and Auditor of the Transferor Company vide their certificate dated 14.01.2011, a copy whereof is annexed as Ex.VII to

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this petition.

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The Transferor Company is an unlisted closely held public company. The Transferee Company being a listed company on Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE), the scheme of arrangement has been drawn up in consonance with the provisions of securities laws or the stock exchange requirements including the S E B I Act, 1992, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the provisions of the Act, which are administered by S E B I and the rules, regulations, guidelines etc., made under these Acts and the Listing Agreement. While stating that the sanctioning of the scheme of amalgamation will be for the benefit of the Transferor Company, the present Application has been filed to sanction the said scheme.

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I have heard the learned counsel for the petitioner and perused the material available on record.

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By order dated 07.02.2011, this Court directed notice to the Regional Director, Ministry of Corporate Affairs, Chennai; the Registrar of Companies, Andhra Pradesh at Hyderabad and the Official Liquidator, High Court of Andhra Pradesh.

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Pursuant thereto, the Official Liquidator filed a report dated 03.03.2011 stating that the affairs of the Transferor Company appear to have not been conducted in a manner prejudicial to the interest of the members or to public interest.

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The Registrar of Companies in his affidavit did not raise any objection for the sanction for the proposed scheme of arrangement.

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Having regard to the facts and circumstances noticed above and taking into consideration the fact that the scheme of arrangement is not opposed to any provision of law or public interest, and despite notice of the admission of the company petition by paper publication, no objection whatsoever have been received from any quarter, I am of

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the opinion that it is a fit case for granting sanction of the scheme of arrangement as sought by the petitioner.

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Accordingly, the Company Petition is allowed and the scheme of arrangement is approved. A copy of this order shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. No costs.

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__________ G. ROHINI, J

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Date: 16.03.2011 Note: Issue CC in one week (B/o) Ivd

Vst Distribution,Storage and Leasing Private Ltd. v. -

Case brief

What is this about?

What did the court decide?

Vst Distribution,Storage and Leasing Private Ltd. v. -

Case brief

What is this about?

What did the court decide?

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