Following information and figures are noticed from the Annual Accounts for the year ended 31st March, 2019 of MNP Limited, a listed company: Authorized Shares Capital ₹10 crore comprising of one crore Equity shares of ₹1

Answer 1(b)(2) In the above stated problem, MNP Ltd, authorized capital is ₹10 Crores and proposes to issue bonus shares in the ratio of 1:1, which means the authorized capital after bonus issue is to be increased by passing a special resolution. In the said problem, MNP Ltd has: Particulars Amount Shares Fully paid up share capital ₹4.0 Crore 40,00,000 shares of ₹10 each Partly paid-up capital (to be made fully paid-up before bonus issue) ₹1.0 Crore 10,00,000 shares of ₹10 each, ₹5 paid-up 2,50,000 convertible debentures of ₹100 each convertible into fully paid up shares of ₹10 each in the ratio of 2 equity shares for every 1 debenture ₹0.50 Crore 5,00,000 shares of ₹10 each. Total capital after conversion ₹5.50 Crore 5,50,000 shares of ₹10 each In all the company will be having 40,00,000 + 10,00,000 + 5,00,000 shares of ₹10 each amounting to ₹5.5 Crore paid-up capital. If the company proposes to issue bonus shares in the ratio of 1:1, then post-issue capital will be ₹11 Crore (₹5.5 Crore + ₹5.5 Crore), bringing the authorized capital to ₹11 Crore. Bonus shares only against reserves, etc. if capitalized in cash (Regulations 94) The bonus issue shall be made out of free reserves built out of the genuine profits or securities premium collected in cash only and reserves created by revaluation of fixed assets shall not be capitalized for the purpose of issuing bonus shares. Without prejudice to the provisions of sub-regulation (1), the bonus share shall not be issued in lieu of dividend. Applying the above regulations, MNP Ltd, currently has ₹24.50 Crore (general reserve of ₹14.50 Crores and ₹10 Crores as securities premium amount) which can be utilized for the purpose of bonus issue amounting to ₹5.5 Crores. Completion of bonus issue (Regulation 95) An issuer, announcing a bonus issue after the approval of its board of directors and not requiring shareholders' approval for capitalization of profits or reserves for making the bonus issue, shall implement the bonus issue within fifteen days from the date of approval of the issue by its Board of directors. Provided that where the issuer is required to seek the shareholders' approval for capitalization of profits or reserves for making the bonus issue, the bonus issue shall be implemented within two months from the date of the meeting of its Board of directors wherein the decision to announce the bonus issue was taken subject to shareholders' approval. Once the decision to make a bonus issue is announced, the issue cannot be withdrawn. As per regulation 92 of SEBI (ICDR) Regulations 2009, if company defaulted in payment of interest on fixed deposit it cannot issue bonus shares.