KISHORE VADILAL PRIVATE LIMITED Vs. STATE

JUDGEMENT

(1.) THESE petitions have been filed under Sections 391 and 394 of the Companies Act, 1956 ("the Companies Act") to obtain the sanction of this Court to a Composite Scheme of Arrangement in the nature of Demerger and Transfer of demerged Undertakings II and III of Kishore Vadilal Private Limited (the Demerged Company who has filed Company Petition No.142 of 2012) to S.A.Innovations Private Limited (the First Resulting Company who has filed Company Petition No.143 of 2012) and Ratnamani Medi Service Private Limited (the Second Resulting Company) who has filed Company Petition No.144 of 2012).

(2.) THE objects for which the petitioner Demerged Company was incorporated are set out in the Memorandum and Articles of Association annexed at AnnexureA to the petition. It is stated in the petition filed by the Demerged Company, that it is engaged in the business of manufacture and marketing of Diamond Core/ Waterwell Drilling Equipments and accessories for Mineral Exploration Geotechnical uses. It has diversified in manufacturing of electronic items through another Unit and further intends to diversify into medical services. It is stated that it has been realized by the management of the petitioner Demerged Company that two of its operating divisions are quite different, involve distinct business dynamics, manufacturing methods and processes and third intended activity, namely medical sciences, which also requires altogether different focus. That, as the strategies for the development and growth of these unrelated businesses require different focus and may find different strategic/ financial investors in the long run, it is proposed to segregate the three activities and bifurcate its undertakings into three different Companies. It is, therefore, envisaged by the Companies that the resultant restructure of business would facilitate the rapid growth of the respective businesses with specific focus. This would be beneficial to its Shareholders as well as Creditors. The details of the commercial advantages that would flow by virtue of the proposed Demerger have been enumerated in the petition.

(3.) THE proposed Scheme provides that (i) UndertakingI, namely Vatva Unit to be retained with KVPL, (ii) UndertakingII, namely Electronics Division or Gandhinagar Unit to be demerged to SA Innovations Private Limited, (the First Resulting Company) and (iii) UndertakingIII, namely Residue Undertaking to be demerged to Ratnamani Medi Service Private Limited (the Second Resulting Company).