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TMI Blog2020 (10) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... even after the lapse of the prescribed period of 90 days for filing the objections. Reduction of share capital allowed - application approved. - C. P. No. 13/66/NCLT/AHM/2020. - - - Dated:- 3-9-2020 - Madan B. Gosavi (Judicial Member) And Virendra Kumar Gupta (Technical Member) For the Petitioner-Company : Mrs. Swati Soparkar ORDER 1. This is a petition filed under section 66 read with section 52 of the Companies Act, 2013 seeking confirmation to the proposed reduction of equity share capital of M/s. Shreno Ltd., the petitioner-company, by repayment of the fair value of the shares to the small equity shareholders. 2. It has been submitted that the petitioner-company was incorporated on the December 19, 1944 under the provisions of the Companies Act, 1913 as a company limited by shares, in the name and style of Alembic Glass Industries Ltd. Pursuant to and as part of the scheme of merger of erstwhile Shreno Ltd., with erstwhile Alembic Glass Industries Ltd., approved by the hon'ble High Court of Gujarat vide its order dated July 21, 2006 the name of the company was changed to Shreno Ltd., and fresh certificate of incorporation dated September 19, 2006 (C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this, many public shareholders have expressed their desire by means of written/oral communications to monetize/liquidate their investment in the equity share capital of the company. The proposed capital reduction will provide an opportunity to the public shareholders of the company to exit from the company at a fair valuation as the equity shares held by them in the company are otherwise not marketable or tradable and the investment is locked up since the delisting of the shares of the company in the year 2007. 5. In view of the facts and circumstances, the board of directors of the petitioner-company thought it appropriate to remit back, an amount equivalent to the fair value of the equity shares, as determined by an independent valuer, to the public shareholders and cancel and extinguish the paid-up equity share capital of the company to such extent. It has been clarified that this capital is in excess of the needs of the company. Accordingly, the board of directors of the petitioner-company, at its meeting held on November 27, 2019 passed the resolution, for in principle approval of the proposal for reduction of equity share capital of the petitioner-company as envisaged und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. At both these meetings, facilities for remote e-voting and voting by ballot paper at the venue of the meeting were provided : (i) Cumulative result of voting by the equity shareholders indicate that 319 (three hundred and nineteen) equity shareholders representing the aggregate value of their shares at ₹ 47,27,01,800 (rupees forty seven crores twenty seven lakhs one thousand and eight hundred only) voted in favour of the proposal. 96 (ninety six) equity shareholders representing the aggregate value of their shares at ₹ 11,81,000 (rupees eleven lakhs and eighty one thousand only) voted against the proposal. Hence, the resolution approving the proposed reduction of equity share capital was passed by the requisite majority of 76.87 per cent. in number and 99.75 per cent. in value of the equity shareholders casting valid votes. (ii) Cumulative result of voting by the preference shareholders indicate that 112 (one hundred and twelve) preference shareholders representing the aggregate value of their shares at ₹ 34,97,04,568 (rupees thirty four crores ninety seven lakhs four thousand five hundred and sixty eight only) voted in favour of the proposal. 42 (for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancelling and extinguishing, in aggregate, 6.92 per cent. of the total issued, subscribed and paid-up equity share capital of the company, comprising of 3,41,369 (three lakhs forty one thousand three hundred and sixty nine only) equity shares of ₹ 100 (Indian rupees hundred only) each amounting to ₹ 3,41,36,900 (Indian rupees three crores forty one lakhs thirty six thousand and nine hundred only) held by the public shareholders of the company, i. e., the holders of the equity shares of the company other than the promoters and promoter group of the company ('public shareholders') by paying to such public shareholders, the fair value (as determined by RBSA Valuation Advisors LLP, independent registered valuers) amounting to ₹ 2,005 (Indian rupees two thousand and five only) including premium amounting to ₹ 1,905 (Indian rupees one thousand nine hundred and five only) for each equity share held by such public shareholders amounting to a total sum of ₹ 68,44,44,845 (Indian rupees sixty eight crores forty four lakhs forty four thousand eight hundred and forty five only) ('capital reduction'). Resolved further that upon the capital reducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree hundred and sixty nine only) equity shares of ₹ 100 (Indian rupees hundred only) each of the company held by the public shareholders shall stand can celled, extinguished and rendered invalid. Resolved further that Mr. Chirayu Amin, Ms. Yera Amin, directors, Mr. Shaunak Amin, managing director, Mr. Nitin Bhave, whole-time director, Mr. Rahul Mukadam, Dy. CFO and Mr. Sagar Gandhi, deputy company secretary, be and are hereby severally authorized to take all necessary steps and do all such acts, deeds, matters and things, as they may, in their absolute discretion deem necessary, expedient, usual or proper in the best interest of the company and its members in connection with and relating to the capital reduction, including issuing any directions for settling any question or doubt or difficulty whatsoever that may arise, for the purpose of giving effect to the capital reduction, or to any modification thereof without being required to seek any further consent or approval of the members or otherwise (including but not limited to the following) : (1) To verify, sign, deal, swear, affirm, declare, deliver, execute, make, enter into, acknowledge, record and perfect all deeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke any alterations/changes, modification or amendments in the application/petition as may be expedient or necessary, including any alteration, modification or amendment required to be made for complying with the requirements or conditions imposed by the NCLT and/or any other appropriate authorities, if any. (12) To prepare or get the interim financial statements prepared, if required, along with relevant annexures, schedules and other necessary supporting and to pass such accounting entries and/or making such other adjustments in the books of account, as are considered necessary to give effect to the above resolution. (13) To discharge the payment, net of taxes if any, due to the public shareholders of the company in lieu of and for cancellation and extinguishment of the equity shares of the company held by such public shareholders pursuant to the capital reduction, in accordance with applicable laws, by payment through any of the permissible modes, after payment of appropriate taxes by the company, as may be applicable. (14) To call for the bank account details and other personal details of the public shareholders of the company for discharging consideration (viz., KYC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under the National Company Law Tribunal (Procedure for Reduction of Share Capital of Company) Rules, 2016, viz., certificate from directors as well as the statutory auditor confirming the list of secured and unsecured creditors of the company ; certificate from the chartered accountant confirming no arrears of public deposits as well as declaration by a director to that effect. The certificate from the statutory auditor confirming the proposed accounting treatment being in compliance with the applicable Accounting Standards was also placed on record. The said petition was admitted by this Tribunal on March 4, 2020 and the signed copy was made available on March 11, 2020. Pursuant to the directions issued vide the said order, the individual notice for ascertainment of claims of the creditors were dispatched to all the secured and unsecured creditors of the company by the registered post on March 13, 2020. The public notice was advertised in Indian Express, English daily, Sandesh Gujarati daily, both Vadodara editions as well as Economic Times, Ahmedabad edition on March 14, 2020. The notices were served on the regulatory authorities, viz., the Central Government, through Regional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further affidavit dated July 15, 2020 it has clarified the latest status with regard to the claims of the said creditors. Perusal of the same indicate that in case of one of them, the amount has been reconciled and the claim of the creditor is accepted. Substantial payments have been made in the month of May and June, 2020 in regular course of business and the balance amount shall be paid in due course. The claim of the second creditor, though a small amount is disputed and the petitioner-company has undertaken to pay the same as and when the dispute is resolved. 14. Heard Mr. Saurabh Soparkar, the learned senior advocate appearing with Mrs. Swati Soparkar, the learned advocate for the petitioner. After the first hearing of the petition further clarifications were sought by this Tribunal vide order dated July 16, 2020. The further affidavit dated August 4, 2020 provided the detailed working of the valuation report as well as other clarifications sought. Having perused the petition and more particularly the reasons given in support of the proposed reduction, in our view there is no reason not to confirm the proposed action of the petitioner to reduce its capital. The said propos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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