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conversion of preference shares into equity shares

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(Querist)
04 June 2010 AUTHORISED CAPITAL=4,25,00,000
equity shares: 10,50,000 @ 10 each
preference shares: 3,20,000 @ 100 each

PAID UP CAPITAL=38,683,000
equity shares= 7,28,300 @ 10 each
convertible preference shares=3,14,000 @ 100 each

Now the company pans to convert the preference shares into equity shares at 10 + 90(premium) each. In this case what will be my new paid up equity capital? will it remain same or there will be a reduction of capital?
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Vignesh

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Vignesh (Expert)
05 June 2010 1. New Eq. PU Capital = 1042300 eq. shrs @ Rs. 10 each.(Rs.1,04,23,000) (Below AU Cap of Rs.1,05,00,000)

2. Pref. PU Capital = Nil (AU Cap. same)

3. Securities Premium Account (on liabilty side of BS = Rs.2,82,60,000)(i.e.314000 @ Rs.90)

No reduction of capital.

Regards,

Vignesh J
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