ALEMBIC LTD. Vs. STATE

JUDGEMENT

(1.) THIS is a petition filed under Sections 78 and 100 to 103 of the Companies Act, 1956, seeking confirmation to the proposal of capital reduction of the company in the form of utilizing its securities premium account as well as general reserve.

(2.) THE petitioner -company herein is a listed public limited company and is engaged in the business of production and marketing of pharmaceutical products. The company generated a turnover of Rs. 721.83 crores during the financial year ending on March 31, 2007. It is a profit making company with substantial reserves. The company's growth efforts included acquisition of various intangible assets, such as trademarks, copyright, designs, technical know how, licenses, franchises, etc., aggregating to Rs. 176.83 crores. The management of the petitioner -company thought it appropriate to restructure the balance -sheet of the company so as to streamline its financial structure through elimination of intangible assets. The company has, therefore, proposed to adjust the debit balance of its intangible accounts against the credit balance of its share premium account and general reserve account under the provisions of the Companies Act. It is submitted that the restructuring will have no impact on the tangible net worth and tangible book value of the company's shares, while the apparent net worth and apparent book value will come down.

(3.) TO delegate all or any of the powers herein conferred to any committee of directors or any other director or any other officer of the company. 4. The petition was admitted by this Court on November 30, 2007, and the same was ordered to be advertised in Vadodara edition of Indian Express, English daily and Loksatta -Jansatta, Gujarati daily. The said direction has been complied with by the company and the notice of the petition has been duly advertised in the aforesaid dailies on December 5, 2007. The same is confirmed by the affidavit dated December 7, 2007, filed by the clerk of the learned advocate for the petitioner. Pursuant to the said advertisement no one has come forward to raise any objections opposing the sanction to the proposed capital reduction. It has also been pointed out that the proposed reduction of capital of the petitioner was approved by the Bombay Stock Exchange and National Stock Exchange respectively vide letters dated September 14, 2007 and September 19, 2007, as required under the listing agreement. These letters are produced on record of this petition along with additional affidavit dated December 25, 2007, filed by Shri Rajkumar Baheti, the director of the petitioner -company.