ACCOUNTING TREATMENT IN THE BOOKS OF TRANSFEREE COMPANY. 3
39.1 The Transferee Company 3 shall record the assets and liabilities, if any, of the Part V Transferor Companies vested in it pursuant to this Scheme, at the respective book values as appearing in the books of the Part V Transferor Companies.
39.2 The identity of the reserves of the Part V Transferor Companies shall be preserved and shall appear in the financial statements of the Transferee Company 3 in the same form and at the same values as they appear in the financial statements of the Part V Transferor Companies.
39.3 Pursuant to the amalgamation of the Part V Transferor Companies with the Transferee Company 3, the inter-company balances between the Transferee Company 3 and the Part V Transferor Companies, if any, and inter-company balance amongst Part V Transferor Companies, if any, appearing in the books of the Transferee Company 3 and respective Part V Transferor Companies, shall stand cancelled.
39.4 The nominal value of Redeemable Preference shares issued by the Transferee Company 3 to the shareholders of the Part V Transferor Companies pursuant to Clause 38.1 of the Scheme shall be credited to the Preference Share Capital Account of the Transferee Company 3.
39.5 The surplus/deficit, if any arising after taking the effect of clause 39.1, 39.2 and 39.4 after giving the effect of the adjustments referred to in clause 39.3, shall be transferred to capital reserve in the financial statements of the Transferee Company 3 with disclosure of its nature and purpose in the notes.
39.6 In case of any difference in accounting policy between the Part V Transferor Companies and the Transferee Company 3, the accounting policies followed by the Transferee Company 3 will prevail to ensure that the financial statements reflect the financial position based on consistent accounting policies.
ACCOUNTING TREATMENT IN THE BOOKS OF TRANSFEREE COMPANY. 23.1 Upon the Scheme becoming effective and with effect from the Appointed Date, the demerger of the Demerged Undertaking 2 from the Transferor Company 2 to the Transferee Company shall be accounted for, in the books of the Transferee Company, in accordance with the Indian Accounting Standard 103 - Business Combinations and other applicable generally accepted accounting principles.
23.2 Upon the Scheme becoming effective, the intercompany balances between the Transferee Company and the Demerged Undertaking 2 of the Transferor Company 2, if any appearing in the books of the Transferee Company shall stand cancelled.
23.3 In case of any difference in accounting policy between the Demerged Undertaking 2 of the Transferor Company 2 and the Transferee Company, the accounting policies followed by the Transferee Company will prevail to ensure that the financial statements reflect the financial position based on consistent accounting policies.
ACCOUNTING TREATMENT IN THE BOOKS OF TRANSFEREE COMPANY. 13.1 Upon the Scheme becoming effective and with effect from the Appointed Date, the Transferee Company will account for the demerger of Demerged Undertaking 1 of the Transferor Company 1 in its books of accounts using the principles laid down in Indian Accounting Standard 103 - Business Combinations and other applicable generally accepted accounting principles as follows:
13.1.1 Upon the Scheme becoming effective, the Transferee Company shall record the assets and liabilities transferred to and vested in it pertaining to the Demerged Undertaking 1 of the Transferor Company 1 pursuant to this Scheme at the fair values as on the Appointed Date.
13.1.2 The shareholding in the Transferee Company held by Transferor Company 1 as on the Appointed Date shall stand cancelled. Upon cancellation, the Transferee Company shall debit to its equity share capital the aggregate face value of such cancelled equity shares with a corresponding credit to the investments recognised as part of 13.1.1. The difference (if any) would be adjusted against the securities premium of the Transferee Company.
13.1.3 The Transferee Company shall credit the aggregate face value of the equity shares of Transferee Company issued and allotted by it as per clause 11 above to the members of the Transferor Company 1, to its share capital in its books of account. The excess, if any, of the fair value of the equity shares over the face value of the equity shares shall be credited to the securities premium of the Transferee Company.
13.1.4 Upon the Scheme becoming effective, the intercompany balances between the Transferee Company and the Demerged Undertaking 1 of the Transferor Company 1, if any appearing in the books of the Transferee Company shall stand cancelled.
13.1.5 The excess/deficit of the fair value of net assets pertaining to the Demerged Undertaking 1, vested in the Transferee Company and the fair value of equity shares issued as per clause 13.1.3, after considering the effect of clause 13.1.2 above, shall be adjusted to the capital reserve/ goodwill of the Transferee Company, as applicable.
13.1.6 In case of any difference in accounting policy between the Demerged Undertaking 1 of the Transferor Company 1 and the Transferee Company, the accounting policies followed by the Transferee Company will prevail to ensure that the financial statements reflect the financial position based on consistent accounting policies.
ACCOUNTING TREATMENT IN THE BOOKS OF TRANSFEREE COMPANY. 3.3.1 The Brands of the Transferor Company are self generated and are not appearing in the financials of the Transferor Company. Hence Brands would not be recorded in the financials of the Transferee Company.
3.3.2 For the following expenses debited by the Transferee Company to its profit and loss account, the Board of Directors of the Transferee Company may either withdraw equivalent amount from the general reserve and credit to its profit and loss account or adjust such expenses directly against the general reserve, as the case may be: • costs, charges, taxes including duties, levies and all other expenses, if any, arising out of, or incurred in carrying out and implementing this Scheme and matters incidental thereto; • any depreciation / amortization / impairment or any other such charge by whatsoever name called that may be required to be charged, in any of the current or future years, in respect of such Brands. Such credit will be reflected in a manner considered appropriate or adjusted against the general reserve as considered appropriate, by the Board of Directors of the Transferee Company.
