The Boards of directors of Music India Ltd. (MIL) and Sound India Ltd. (SIL) have decided a scheme of arrangement. The scheme has been approved with adequate majority. As per the scheme of arrangement, the 'software unde
CS Professional · Corporate Restructuring, Valuation and Insolvency · PYQS · June 2014
The Boards of directors of Music India Ltd. (MIL) and Sound India Ltd. (SIL) have decided a scheme of arrangement. The scheme has been approved with adequate majority. As per the scheme of arrangement, the 'software undertaking' of MIL is proposed to be transferred to SIL under sections 391 to 394. One of the conditions of the scheme is that any excess in the value of net assets of 'software undertaking' transferred to SIL shall be available for distribution to the shareholders of SIL. Regional Director, Ministry of Corporate Affairs, has raised objection in his affidavit filed with the High Court stating that excess, if any, in the value of the net assets of the 'software undertaking' should be adjusted to the capital reserve as prescribed in AS-14 and not to the general reserve as proposed in the scheme of arrangement. Examine the applicability of AS-14 and give your opinion whether contention raised by the Regional Director holds good in law.
Topics: Corporate Restructuring
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