AI Drafter 
TaxTMI 
TaxTMI 
2019 (5) TMI 1894
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....Company ) was incorporated on April 14, 1987 under the Companies Act, 1956, as a Company limited by shares, in name and style of Yokogawa Keonics Limited. The name of the Company was changed to Yokogawa Blue Star Limited on November 16, 1992 and thereafter, on April 16, 2004, the name of the Company was changed yet again to Yokogawa India Limited. (2) The Authorised Capital of the Company as on March 31, 2018 is Rs. 10,00,00,000 divided into 1,00,00,000 equity shares of Rs. 10 (Rupees Ten). The issued, subscribed and fully paid up capital of the Company as on March 31, 2018 was Rs. 8,75,00,000 (Rupees Eight Crore, Seventy Five Lakhs) divided into Rs. 8,75,00,000 equity shares of Rs. 10 (Rupees Ten) each, wherein Promoter Group holding is 97.21%. (3) The main objects of the Company, in brief, are to assemble, manufacture, design, develop, engineer, service, buy, sell, import, export and otherwise to deal in Industrial Process Control Instruments, Instrumentation and Systems, Test and Measuring Instruments and to undertake turn-key jobs or divisible or indivisible works contracts in which the parts LCD accessories, components, products, systems and instruments are t....
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....ein it was resolved as follows: "RESOLVED THAT pursuant to Sections 66 of the Companies Act, 2013, read with Section 52 & other applicable provisions of the Companies Act, 2013. If any, the Rules prescribed thereafter, provisions of the Memorandum ("MOA") and Articles of Association ("AOA") (Article 41 & 42) of the Company, and subject to sanction by the NCLT, Bengaluru Bench ("Tribunal"), consent of the members be is and hereby accorded for the cancellation and reduction of the issued, subscribed and paid up equity share capital consisting of 244,531 (Two Lakh Forty four thousand five hundred and thirty one) equity shares of Rs. 10 (Rupees Ten) each fully paid up along with the securities premium/free reserves held by shareholders belonging to the non-promoter group of the Company, by returning the paid-up equity share capital along with proportionate amount of the securities premium lying to the credit of the securities premium amount and free reserves to each of the shares held by the respective shareholders at Rs. 10 (Rupees Ten) per paid up equity share capital along with the premium amount of Rs. 913.20 (Rupees Nine Hundred and Thirteen and paise twenty) in cash (her....
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....nt to give effect to this resolution of cancellation and hence reduction of the Share Capital of the Company under the directives of the appropriate authorities and without being required to seek any further consent or approval of the Company in this regard. RESOLVED FURTHER THAT any Director or the Company Secretary of the Company be and are authorised severally to circulate the certified true copy of this resolution to all such authorities as may be necessary" (10) The details about the number of members present and voted in Extraordinary General Meeting of the Company in relation to the approval of reduction of equity share capital of the Company is summarized below: (i) The number of members present (including proxy) and voting at such meeting and number of shares or voting power held by them 33 (ii) The number of members (including proxy) who voted in favor of the resolution for reduction of equity share capital and the number of shares or voting power held b them 28 (iii) Number of votes casted in favor of the resolution 85,06,955 (iv) Percentage of votes casted in favor of the resolution 99.99% (v) The number ....
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....bility of the Company to honor its commitments or to repay its debts in the ordinary course of business. (13) The form of the minutes proposed to be registered under Section 66(5) of the Companies Act, 2013 is as follows: "Approval is hereby accorded pursuant to the provisions of Section 66 read with Section 52 of the Companies Act, 2013, to the Special resolution of Yokogawa India Limited passed on 11 th January, 2018 at the Extra Ordinary General Meeting approving the reduction in the paid up equity share capital from the Company be reduced from Rs. 8,75,00,000 divided into Rs. 8,50,54,690 equity share of Rs. 10 each to Rs. 8,50,54,690 divided into 85,05,469 shares of Rs. 10 each. 3) The Registrar of Companies, Karnataka, has filed a report dated 19.02.2019, by inter alia contending as follows: (1) The Company is an unlisted public limited Company. It had delisted its shares from the National Stock Exchange of India Limited, Mumbai Stock Exchange and Bangalore Stock Exchange in 2007, under the Securities and Exchange Board of India (Delisting of Equity Shares) Guidelines 2003. Post delisting, the shareholding of non-promoter group of shareholders in ....
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....any. 4) Sri B.S.Srinivasa, Company Secretary has filed reply Affidavit to the Affidavit filed by the ROC, Karnataka on behalf of Central Government, by inter alia stating are as follows: (1) The observation made by the Regional Director that "(i) The Company be directed to state as to whether any share valuation certificate is obtained and whether the valuation of Goodwill/Future earning is taken care therein". It is submitted that, the Company has obtained a report on the valuation of the equity shares of the Company from an independent valuer "M/S. Grant Thornton India LLP", where the value of the Company is determined by considering the future earning (including the enhancement to the business on account of goodwill) of the Company. The Board of Directors of the Company during the 147th Board Meeting held on November 13, 2017 resolved that the value of per equity shares as reported by the independent valuer is Rs. 923.20/- inclusive of Rs. 10/- towards the face value per share and Rs. 913.20/- towards the premium per equity share. (2) With respect to the observation made by the Regional Director "(ii) The Company be directed to place on record as to how many....
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....rtisement in English daily "Hindu" and in Kannada Daily (vernacular language where the registered office of the Company is situated) "Kannada Prabha". (4) It is also stated that Rule 4 of NCLT (Procedure for Reduction of Share Capital of a Company) Rules, 2016, will provide for how the representations/ objections shall be filed by the creditors as "provided that the objections, if any shall be filed in the Tribunal within three (3) months from the date of publication of the notice with a coy served on the Company." The Company has served notice on each creditor individually vide Form RSC-3 and vide newspaper circulation. Also, it may be noted that Company is not in receipt of representation or objections from the creditors during the period of three (3) months from the date of circulation of individual notices as well as the notice by newspaper circulation. In the absence of provisional requirement under the Companies Act, 2013 read with related rules, the Company has not initiated to convene a meeting of the creditors which is not within the frame work prescribed by the law. The Company has already submitted affidavit as stated under Rule 5 of NCLT (Procedure for Reductio....
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....ect to the observation made by the Registrar of Companies, Karnataka, that "(iii) The Company proposed to return the capital to the outgoing members out of the securities premium account. As per Section 52(2) and (3) of the Companies Act, 2013, the securities account can be used only for the purpose stated therein and not for otherwise. In this case, the Company is not proposing to compensate/ reward the benefit of the Company to its shareholders by way of announcing buy back of shares. That alternatively, the Company can go for buyback of securities by complying with section 68 of the Companies Act, 2013, if the intention of the Petitioner is to do away with the non-promoter/public shareholders. Since the Company received requests from the public shareholders time and again to provide an opportunity to exit and liquidity to the respective holdings in any way legally framed, the Company is entitled to take appropriate option as per the circumstances. (8) In the present case, the option of the reduction of the share capital was considered and approved by the Board of Directors (during the 147th meeting held on 13th November 2017) and then by the shareholders (during an Extr....
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....pany has received request for exit by the shareholders by paying off the portion of the paid up share capital which the Company has in excess of the wants of the Company by requested to be returned by the shareholder. It may further noted that Section 66(6) also states that "nothing in this section shall apply to buy back of its own securities by company under section 68" as the objective of both the provisions are to provide opportunity for exit to the shareholders by respective process of reducing the paid up share capital. (3) Therefore, the learned Senior Counsel has asserted that it is a well settled position of law that a Company has freedom to choose the procedure laid down in the law. As stated supra, all the stake holders have accepted the reduction in question and all the extant provisions of law are duly followed. (4) The learned Counsel has relied upon the following judgments in support of his case: Miheer H Mafatlal vs. Mafatlal Industries Ltd (SC) (1996) 23 CLA 1 (SC)/(1996) 10 SCL 70 (SC) Zee Interactive Multimedia Ltd. In re (Bombay) (2002) 39 SCL 534 / 111 compcase 733 (Bombay) Lanco Kalahasthi Castings....