Prince TV Channels Ltd. had ₹ 7 crore as securities premium in its reserves and surplus account in Balance Sheet as at 31st March, 2017. The Company has incurred significant losses in preceding years and as on 31st March

The issue involved in question has been decided by Mumbai bench of NCLT in the matter of section 52 and 66 of the Companies Act 2013 with respect to Dish TV India Ltd. Section 53(1) of the Companies Act, 2013, inter alia provides that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premium received on those shares shall be transferred to a "securities premium account" and the provisions of this Act relating to reduction of share capital of a company shall, except as provided in this section, apply as if the securities premium account were the paid-up share capital of the company. Section 53(2) of the Companies Act, 2013, states that the securities premium account may be applied by the company- towards the issue of unissued shares of the company to the members of the company as fully paid bonus shares; in writing off the preliminary expenses of the company; in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company; or for the purchase of its own shares or other securities under section 68. In addition to the above as per Section 53(3) of the Companies Act, 2013, the securities premium account may also be applied by such class of companies, as may be prescribed and whose financial statement comply with the accounting standards prescribed for such class of companies under section 133,- in paying up unissued equity shares of the company to be issued to members of the company as fully paid bonus shares; or in writing off the expenses of or the commission paid or discount allowed on any issue of equity shares of the company; or for the purchase of its own shares or other securities under section 68. Therefore, in the given question, the utilization of securities premium account is not out the activities which are allowed under Section 53(2) and Section 53(3) of the Companies Act, 2013. Therefore, as per Section 53(1) of the Companies Act, 2013, in order to write off accumulated losses with the securities premium account, the provisions of reduction of share capital shall be complied with by the Company and thus, provisions of Section 66 of the Companies Act, 2013 shall be complied with by the Company.