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Unit 1: Share Capital – Issue of Shares

Notes

* Stock split from 10/share to 1/share
** Consolidated results from FY02 onwards
*** Dabur Pharma got de-merged.
# Bonus issue of 1:1 was issued during the year
^ Bonus Issue of 1:2 was issued during the year

1.7 Summary

 Share capital comprises the nominal values of all shares issued (that is, the sum of their
“par values”).

 In a wider sense, if the shares have no par value or the allocation price of shares is greater
than their par value, the shares are said to be at a premium (called share premium, additional
paid-in capital or paid-in capital in excess of par); in that case, the share capital can be said
to be the sum of the aforementioned “nominal” share capital and the premium.

 In the modern law of shares, the “par value” concept has diminished in importance, and
share capital can simply be defined as the sum of capital (cash or other assets) the company
has received from investors for its shares.

1.8 Keywords

Nominal Capital: Authorised capital of a company.
Convertible Shares: Share that can be easily converted.
Stipulated Rate: Formal agreement on your permanent disability rating.

1.9 Review Questions

1. ABC Limited was registered with an authorised capital of 1,00,000 shares of 100 each.
80,000 shares were issued to the public. The public subscribed for 60,000 shares. The company
called up 8 per share. All the money called up was duly received with exception of a call
of 2 per share on 500 shares. Show the amounts of various types of capital in the balance
sheet.
2. Authorised capital of Samraat Ltd. is 50,00,000 divided into 50,000 equity shares of 100
each. Out of these shares only 40,000 shares were issued to the public payable as follows:

With application 20
On allotment 25
On first call 30
On second and final call 25

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