The summarised balance sheet of Swathi Ltd. as on 31st March, 2011 stood as follows:
|
Liabilities: |
Rs |
|
Share Capital 50,000 shares of 10 each |
5,00,000 |
|
General reserve |
7,50,000 |
|
Debenture Redemption Fund |
5,00,000 |
|
12% Convertible debentures |
|
|
10,000 debentures of 100 each |
10,00,000 |
|
Unsecured Loan |
5,00,000 |
|
Current liabilities |
12,50,000 |
|
45,00,000 |
|
|
Assets: |
|
|
Net fixed assets |
18,00,000 |
|
Debenture Redemption fund investment |
4,00,000 |
|
Cash at bank |
5,00,000 |
|
Other current assets |
18,00,000 |
|
|
45,00,000 |
The debentures are due for redemption on 1st April, 2011. According to the terms of issue of debentures, they were redeemable at a premium of 5% and also conferred option to the debenture holders to convert 20% of their holdings into equity shares at a predetermined price of Rs.15.75 per share and the payment in cash.
Assuming that:
(i) Except for 100 debenture holders holding 2,500 debentures, the rest of them exercised the option for maximum conversion.
(ii) The investments realise Rs.4,40,000 on sale and
(iii) All transactions are put through, on 1st April, 2011.
You are required to redraft the balance sheet of the company as on 1st April, 2011 after giving effect to the redemption. Also show the number of equity shares to be allotted and the cash payment necessary.