the freehold premises to be revalued at 20 more the value of machinery to be reduced 620704

Model: External reconstruction–Dissenting shareholders The abridged balance sheet of H Ltd. as at 31 December 2010 is as follows:

Liabilities		Assets
20,000 Equity Shares of ,T. 100 Each Fully	20,00,000	Patents	2,80,000
Paid		Freehold Premises	10,00,000
8,000, 10% Preference Shares of f. 100	8,00,000	Machinery	5,40,000
Each Fully Paid		Stock	8,00,000
15% Debentures	8,00,000	Debtors	7,20,000
Unsecured Loan	4,00,000	Bank	2,00,000
Creditors	6,00,000	Profit	11,80,000
Accrued Interest on Debentures	1,20,000
	47,20,000		47,20,000

The following scheme of reconstruction was approved by the Court:

A new company L Ltd. is to be formed to take over the entire business of H Ltd.
L Ltd. to issue one equity share of Rs.100, Rs.60 to be paid up in exchange of every two shares in H Ltd. to the shareholders who agree with the scheme; shareholders who do not agree with the scheme are to be paid @ Rs.20 per share in cash. Such shareholders hold 1,600 equity shares.
Preference shareholders to get 15, 11% preference shares of Rs.10 each in exchange of two preference shares of H Ltd.
Liability in respect of 15% debentures and interest accrued thereon to be taken over and discharged directly by L Ltd. by issue of equity shares of Rs.100 each fully paid up.
The creditors of H Ltd. will get from L Ltd. 50% of their dues in cash and 25% in equity shares of 100 each and the balance to be forgone by them.
The freehold premises to be revalued at 20% more. The value of machinery to be reduced by Rs.and to Rs.6,40,000. Patents to have no value.
The preliminary expenses amounted to Rs.20,000.

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