The court approved the reduction of equity share capital of Wartsila India Limited (WIL) in accordance with the Special Resolution passed by the shareholders. The fair value of the fully paid-up equity share of WIL was valued at Rs. 377 by KPMG, but WIL proposed to pay Rs. 532 per share upon cancellation, which was at a premium of 41% over the fair value. The court found the valuation report fair, reasonable, and accepted by a majority of non-promoter shareholders.

By this Company Petition, Wartsila India Limited (“WIL”) seeks approval and confirmation by this Court in terms of the Special Resolution passed by the shareholders of WIL in its “Extraordinary General Meeting” (“EGM”) held on 10th November, 2009 for the reduction of its equity share capital.

2. The authorized, issued, subscribed and paid-up capital of WIL as on 31st December 2008 is as under:- Particulars Amount in Rs. AUTHORISED 15,000,000 Equity Shares of Rs.10/- each 150,000,000 TOTAL 150,000,000 ISSUED & SUBSCRIBED & PAID-UP 12,034,000 Equity Shares of Rs.10/- each fully paid-up 1,20,340,000 TOTAL 1,20,340,000

3. Of the above, 98.88% of the Paid-up Equity Share Capital of WIL is held by 6 Promoter Shareholders and the balance of 1.12% of the Paid-up Equity Share Capital of WIL is held by 1463 shareholders. There has been no change in the shareholding from 31st December, 2008 till the date of filing the present Petition.

4. WIL is engaged in the business of manufacture and sale of diesel engines and diesel generating sets and providing solutions to the Power and Shipping Industry. The equity shares of WIL were listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Subsequently, an open offer was made by the Promoters under SEBI (Delisting of Securities) Guidelines, 2003 for acquisition of Equity Shares at Rs.622/- per equity share. Since the public shareholding of the Petitioner Company fell below the 10% limit as provided under the Stock Exchange norms, the shares of WIL were delisted from the NSE and the BSE in June 2007.

5. According to WIL, subsequent to the delisting of its equity shares, there was no market to buy and sell the equity shares held by the holders of the equity shares (other than the promoters). The investments made by the public shareholders were locked up and they found it difficult to dispose off their shareholding. Many shareholders for various reasons including change of address, and expiry of offer date had missed the exit opportunity given by the promoters of WIL. Therefore in May 2009, after obtaining a valuation report from M/s. SSP and Company, Chartered Accountants, who valued the WIL Shares at Rs.162 per share, the promoters of WIL namely, Wartsila Technology Oy Ab had again made an offer to the holders of the equity shares (other than the promoters) to purchase their shares at a price of Rs.622/- per share between 15th May 2009 to 31st July, 2009 and thereafter, at a price of Rs.162/- per equity share, for the period 1st August to 15th August, 2009.

6. According to WIL, the holders of the equity shares (other than promoters) continued to face a lot of hardship and inconvenience in the absence of no liquidity/tradability to their shareholding. WIL was receiving requests from time to time from certain non-promoter shareholders to provide them with an exit opportunity. As an investor friendly gesture WIL decided to provide a one-time exit opportunity to the holders of the equity shares (other than the promoters) being the shareholders holding 1,34,769 shares representing 1.12% of the total issued, subscribed and paid-up equity share capital of the company by reducing the entire issued and paid-up equity share capital held by all the shareholders other than the promoters, in accordance with Article 62 of the Articles of Association of WIL and the provisions of Section 100 to 104 of the Companies Act, 1956 (“the Act”).

7. The Petitioner Company obtained Valuation Report from KPMG India Private Limited (KPMG), an independent Valuer for determining the fair value of the Equity Shares of WIL. As per the Report dated 30th September, 2009 of KPMG, the fair value of every one fully paid-up equity share of WIL is Rs.377/- (Rupees Three Hundred and Seventy-seven only).

8. The Board of Directors of the Petitioner Company at the meeting held on 6th October, 2009 inter alia passed the following Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 10