Allowed

Moschip Semiconductor Technology Limited, v. -

Telangana HC3 Dec 2014CP/233/2014

Case brief

AI extract

What is this about?

Allowed confirmation of the reduction of share capital of the petitioner company to write off accumulated losses under Section 101 of the Companies Act, 1956, and granted permission to add 'and reduced' to the company name.

What did the court decide?

Confirmation of reduction of paid up share capital allowed; direction to add 'and reduced' to company name for six months; permission to publish confirmation in newspapers.

Moschip Semiconductor Technology Limited, Vs - — Company and Corporate | Telangana HC (2014)

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HON’BLE SRI JUSTICE A.RAJASHEKER REDDY

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C.P.No.233 OF 2014

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O R D E R

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This Company Petition is filed under Section 101 of the Companies Act, 1956 seeking confirmation of the reduction of share capital.

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The facts of the case are that the petitioner company was incorporated as private limited company on 27.07.1999 under certificate of incorporation No.01-32184 of 1999-2000 and its registered office is situated at Plot No.83 & 84, 2^nd Floor, Punnaiah Plaza, Road No.2, Banjara Hills, Hyderabad, Telangana-500034.

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The main objects of the petitioner company are to carry on the business of providing value added services in VLSI design, Software development and development of SOC (System on a Chip) for consumers, Industrial applications.

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Its authorised share is Rs.550,000,000/-(Rupees Fifty Fice Crore Only) divided into 55,000,000 (Five crore fifty lakhs only) equity shares of Rs.10/-each. The issued share is Rs.477,505,890/-(Rupees Forty Seven Crore Seventy Five Lakhs Five Thouand eight Hundred Ninety only) divided into 47,750,589 (Four Crore Seventy Seven Lakhs Fifty thousand Five Hundred and Eighty Nine only) equity shares of Rs.10/- each and subscribed and paid up share capital is Rs.460,355,170/-(Rupees Forty Six Crore Three Lakhs Fity Five Thousand and one Hundred and Seventy only) divided into 46,035,517 (Four crore sixty Lakhs Thirty Five Thousand Five Hundred and Seventeen only) equity shares of Rs.10/- each.

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The share premium and accumulated losses as per the balance sheet on 31.03.2013 is Rs.666,633,920/-(Rupees Sixty Six Crores Sixty Six Lakhs Thirty Three Thousand Nine Hundred only) and the accumulated losses of Rs.1,098,166,005 (Rupees One Hundred Nine Crores Eighty One Lakhs Sixty Six Thousand and Five only)

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The reasons mentioned for reduction of share capital are as follows: The Board of Directors of the petitioner company at its meeting held on 26.02.2014 approved a resolution to reduce the paid up equity share

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capital of the company subject to approval of the shareholders of the company by special resolution at General Meeting to be convened and further subject to the confirmation of this Court.

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Accordingly, the Annual General Meeting was held on 11.09.2014 and the equity shareholders who had attended the meeting approved the resolution of reduction of share capital.

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Learned counsel for the petitioner has also filed a memo dated 26.11.2014 stating that he has not received any objections.

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That the petitioner company is a fabless semiconductor company which develops several IO bridging products in PCI, USB, Ethernet & PCIe space which normally has long lead times for development with larger capital outlay. The successful sale of these products is contingent on the company customers introducing new models. Due to the extended period of downturn in global economy and recession in US & Europe, the Company’s customers skipped new product introduction which inturn has drastically affected the sale of new chips developed. The company has therefore been incurring losses over the past few years resulting the accumulation of substantial losses.

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The petitioner company envisages to restructure the capital position by means of accounting adjustment in the books of account of the company by reducing the paid up share value of the shares and also by utilising share premium for writing off the accumulated losses.

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The reduction of share capital would cause the balance sheet to bring in true and fair representation of the company by the available assets of the company and reflect the real financial position of the company.

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The reduction of share capital would place the company in a position to pay dividend in future or raise further capital.

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In view the above reasons mentioned for reduction of share capital, there is no impediment for confirmation of reduction of share capital, which is also approved at Board Resolution dated 11.09.2014.

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Since it is stated that the reduction of share capital is on account of running losses in the company, I feel that the words ‘and reduced’ be added in the company’s name as per Section 102 of the Companies Act in

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the interest of public and future investors for a period of six months. In view of above facts and circumstances, this Company Petition is allowed and the learned counsel for the petitioner is permitted to publish the confirmation of reduction of share capital in two daily newspapers i.e., Financial Express (English) and Prajashakti (Telugu) and the same shall be communicated to the Registrar of Companies within thirty (30) days from the date of receipt of the order.

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A.RAJASHEKER REDDY,J Date: 03.12.2014 dv

Moschip Semiconductor Technology Limited, v. -

Case brief

What is this about?

What did the court decide?

Moschip Semiconductor Technology Limited, v. -

Case brief

What is this about?

What did the court decide?

What the court decided

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