INDIA SECURITIES LIMITED 2

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INDIA SECURITIES LIMITEDIndia Securities Limited, )a Company incorporated under the Companies )Act, 1956 and having its Registered Office at )New no. 77/56, C.P. Ramaswamy Road, )Abhirampuram, Chennai 600 018, )represented by Mr. V Parthasarathy, )IN THE HIGH COURT OF JUDICATURE AT MADRAS(Ordinary Original Civil Jurisdiction)COMPANY APPLICATION NO. 442 OF 2011In the matter of the Companies Act, 1956 (1 of 1956)AndIn the matter of Sections 391 to 394 of the Companies Act, 1956AndIn the matter of Scheme of Amalgamation ofETHL Communications Holdings LimitedwithIndia Securities LimitedAuthorised Signatory ) … APPLICANT / TRANSFEREE COMPANYEXPLANATORY STATEMENT UNDER SECTION 393 OF THE COMPANIES ACT, 19561. By an order dated 21 st June 2011, the Hon’ble High Court ofJudicature at Madras has directed that a meeting of EquityShareholders of the Applicant Company be held on Tuesday,26 th July, 2011 at 10.30 A.M. at Chennai House, 5 th Floor, 7,Esplanade, Chennai – 600 108 for the purpose of considering,and if thought fit, approving with or without modification, thearrangement embodied in the Scheme of Amalgamation of ETHLCommunications Holdings Limited with India Securities Limited.2. This statement explaining the terms of the scheme is beingfurnished as required under section 393(1) (a) of the CompaniesAct, 1956. In this Statement, the Applicant Company, IndiaSecurities Limited, is hereinafter also referred to as “TransfereeCompany”, and ETHL Communications Holdings Limited ishereinafter referred to as “Transferor Company”.3. The Transferee Company was originally incorporated under thename “Dear Leasing and Finance Limited” on 20 th July, 1984 in theUnion Territory of Delhi. The name of the Company was changedas “India Factors Limited” after obtaining necessary approval on1 st May, 1987. The registered office of the Applicant Companywas shifted to the state of Tamilnadu w.e.f. 28 th November, 1988and the name of the Company was changed as “India SecuritiesLimited” on 23 rd May, 1990. Subsequently, the registered office ofthe Company was shifted to the state of Maharashtra, with dueapprovals, w.e.f. 22 nd July, 1998. And finally w.e.f. 14 th May, 2010the registered office was shifted back to the State of Tamilnadu,after obtaining due approvals.4. The Registered Office of the Applicant Company is situated atNew no. 77/56, C.P. Ramaswamy Road, Abhirampuram, Chennai600 018.5. The Capital Structure of the Applicant Company as on 31 st March2010 is as follows:ParticularsAmount (Rs.)Authorised Share Capital:100,00,00,000 equity shares of Re.1 each 100,00,00,0005,00,000 preference shares of Rs. 2,000 100,00,00,000eachIssued, Subscribed and Paid-up ShareCapital:19,95,66,310 equity shares of Re.1 eachfully paid up2,00,000 1% Non - Cumulative CompulsorilyConvertible Preference Shares of Rs. 2,000each fully paid up19,95,66,31040,00,00,000Pursuant to the amalgamation of Essar TelecommunicationsHoldings Private Limited, a company incorporated under theAct and having its Registered Office at New No. 77/56, C. P.Ramaswamy Road, Abhirampuram, Chennai 600 018 with theTransferee Company approved by the High Court of Judicature atMadras by its order dated 21 st April 2011, the Share Capital of theTransferee Company is as follows:ParticularsAuthorised Share Capital:Amount (Rs.)90,00,00,000 equity shares of Re.1 each 90,00,00,00015,50,000 preference shares of Rs. 2,000eachIssued, Subscribed and Paid-up ShareCapital:87,57,96,310 equity shares of Re.1 eachfully paid up15,41,000 Non - Cumulative PreferenceShares of Rs. 2,000 each fully paid up310,00,00,00087,57,96,310308,20,00,0002
6. The Applicant Company obtained the Certificate forCommencement of Business on 27 th July, 1984 and commencedits business activities soon thereafter and is presently engaged inthe business of consulting and advisory services.7. ETHL Communications Holdings Limited, (“the TransferorCompany” or ECHL”) was incorporated on October 8, 2007 underthe Companies Act, 1956, in the State of Maharashtra.8. The Registered Office of the Transferor Company is situated atEssar House, 11,K.K. Marg, Mahalaxmi, Mumbai - 400 034.9. The Authorised Capital of the Transferor Company as on 31 stMarch 2010 is as follows:-ParticularsAuthorised Share Capital:Amount (Rs.)16,00,00,000 equity shares of Rs.10 each 160,00,00,000Issued, Subscribed and Paid-up ShareCapital:156,544,000 equity shares of Rs. 10 each 1,565,440,000Subsequent to March 31, 2010, there has been no change in theAuthorized, Issued, Subscribed and Paid up Capital.10. The Transferor Company commenced its business activities soonafter incorporation and is presently engaged in the business asinvestment holding company.11. The amalgamation of the Transferor Company with the TransfereeCompany will be effected by a Scheme of Amalgamation(hereinafter referred to as “the Scheme”) under Sections 391 to394 of the Companies Act, 1956 (hereinafter referred to as “theAct”).12. The Board of Directors of the Transferor Company and theTransferee Company have in their respective Board Meetings,held on 10 th May, 2011 and 16 th May 2011, approved and adoptedthe proposed Scheme of Amalgamation, a copy whereof is sentherewith. The proposed Scheme of Amalgamation under Sections391 and 394 of the Companies Act, 1956 is deemed to form partof this statement.13. The salient features of the Scheme are as follows:a) The Appointed date for this Scheme is 1 st April 2010 orsuch other date as the High Court of Judicature at Madrasmay direct or fix.b) Upon coming into effect of this Scheme and with effectfrom the Appointed Date, subject to the provisions of thisScheme in relation to the mode of transfer and vesting,the entire business and Undertaking of the TransferorCompany shall, without any further act or deed, be andstand transferred to and vested in or be deemed to havebeen transferred to and vested in the Transferee Companyas a going concern, pursuant to the provisions of Sections391 to 394 and other applicable provisions of the Act andthe provisions of this Scheme in relation to the mode oftransfer and vesting of assets.Provided that for the purpose of giving effect to the vestingorder passed under Sections 391 to 394 in respect ofthis Scheme, the Transferee Company shall at any timepursuant to the orders on this Scheme be entitled to get therecord of the change in the title and the appurtenant legalright(s) upon the vesting of such assets of the TransferorCompany in accordance with the provisions of Sections 391to 394 of the Act, at the office of the respective Registrarof Assurances or any other concerned authority, where anysuch property is situated.c) All assets, estate, rights, title, interest and authoritiesaccrued to and/or acquired by the Transferor Company afterthe Appointed Date and prior to the Effective Date shall bedeemed to have been accrued to and/or acquired for andon behalf of the Transferee Company and shall, upon thecoming into effect of the Scheme and with effect from theAppointed Date pursuant to the provisions of Sections 391to 394 and other applicable provisions of the Act, withoutany further act, instrument or deed, be transferred toand vested in and/or be deemed to be transferred to andvested in the Transferee Company so as to become as andfrom the Appointed Date, the estate, assets, rights, title,interests and authorities of the Transferee Company. Uponcoming into effect of this Scheme and with effect from theAppointed Date, all movable assets including cash in hand,if any, of the Transferor Company, capable of passing bymanual delivery or possession or by endorsement anddelivery, shall be so delivered or endorsed and delivered,as the case may be, to the Transferee Company upon thecoming into effect of the Scheme, without requiring anydeed or instrument of conveyance for transfer of the same.Such delivery shall be made on a date mutually agreedupon between the Board of Directors of the TransferorCompany and the Transferee Company.d) In respect of movables other than those specified in clause13 (c) above, including sundry debtors, outstanding loansand advances, if any, recoverable in cash or in kind or forvalue to be received, bank balances and deposits, if any,with Government, Semi-Government, local and otherauthorities and bodies, customers and other persons, thefollowing modus operandi for intimating to third partiesshall, to the extent possible, be followed:(i)(ii)The Transferee Company shall give notice in suchform as it may deem fit and proper, to each person,debtor, loanee or depositee as the case may be,that pursuant to the Courts having sanctioned theScheme, the said debts, loans, advances, bankbalances or deposits be paid or made good orheld on account of the Transferee Company as theperson entitled thereto to the end and intent that theright of the Transferor Company to recover or realisethe same stands extinguished and that appropriateentry should be passed in its books to record theaforesaid change;The Transferor Company shall also give notice insuch form as they may deem fit and proper to eachperson, debtor, loanee or depositee that pursuant tothe Courts having sanctioned the Scheme the saiddebt, loan, advance or deposit be paid or made goodor held on account of the Transferee Company andthat the right of the Transferor Company to recoveror realise the same stands extinguished.e) In relation to the assets, if any, belonging to the TransferorCompany, which require separate documents of transfer,the Transferor Company and the Transferee Company willexecute necessary documents, as and when required.3
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INDIA SECURITIES LIMITED 2

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