STATEMENT OF AFFAIRS AND LISTS TO BE ANNEXED

STATEMENT OF AFFAIRS AND LISTS TO BE ANNEXED :

Statement as to the affairs of…. Ltd .• on the …… day of… 20 , being the date of the winding up order [or order appointing Provisional Liquidator or the date directed by the Official Liquidator as the case may be] showing assets at estimated realisable values and liabilities expected to rank :

Assets not specifically pledged (as per List ‘A ‘)

Estimated realisable values

Rs.Balance at bank Cash in hand …. …. …. …. …. ….

Marketable Securities …. …. …. …. …. ….
Bills Receivable …. …. …. …. …. ….
Trade Debtors …. …. …. …. …. ….
Loans and Advances Unpaid Calls …. …. …. …. …. ….
Stock in Trade …. …. …. …. …. ….
Work in progress …. …. …. …. …. ….
………………………. …. …. …. …. …. ….
………………………. …. …. …. …. …. ….
………………………. …. …. …. …. …. ….

Freehold property. Land & Buildings …. …. …. …. …. ….
Leasehold property …. …. …. …. …. ….
Plant & Machinery …. …. …. …. …. ….
Furniture. Fittings. Utensils. etc. …. …. …. …. …. …
Investments other than marketable securities …. …. …. …. …. ….
Livestock …. …. …. …. …. ….
Other property.etc. …. …. …. …. …. ….
………………………. …. …. …. …. …. ….
………………………. …. …. …. …. …. ….

Asset specifically Pledged

(as per list ‘B’)

(a) Estimated

realisable

values

(b) Due to

Secured

Creditors

(c) Deficiency

ranking

as unsecured

(d) Surplus

carried

to last column

……………………….

………………………

Estimated surplus from assets specifically pledged …………………
Estimated total assets available for preferential creditors,
debenture holders secured by a floating charge, and unsecured …………………
creditors (carried forward)
`
Summary of Gross Assets (d)
Gross realisable value of assets specifically pledged
Other assets — — — — ———————
Gross Assets ` ———————
Estimated total assets available for preferential creditors,
debenture holders secured by a floating charge, and unsecured
creditors] (brought forward).

Liabilities

(e)
Gross Liabilities (to be deducted from surplus or added to deficiency as the case may be). Secured creditors (as per List ‘B’) to extent to which claims are estimated to be covered by assets specifically pledged [item (a) or (b) on preceding page, whichever is the less][Insert in ‘Gross Liabilities’ column only]Preferential creditors (as per List ‘C’)

Estimated balance of assets available for debenture holders secured by a floating charge and unsecured creditors

Debenture holders secured by a floating charge (as per list ‘D’)

Estimated Surplus/Deficiency as regards Debenture holders

Unsecured creditors (as per list ‘E’)

”Estimated unsecured balance of claims of creditors partly secured on specified assets, brought

from preceding page (C)

Trade Accounts

Bills Payable

Outstanding Expenses
………………………….
………………………….
Contingent liabilities (state nature)

Estimated Surplus/Deficiency as regards creditors] [being difference between Gross Assets broughtfrom preceeding page (d) andGross Liabilities as per column (e)]Issued and Called up Capital:

………………….. preference shares of ………. each

`…………………. Called up (as per List ‘F’)

………………….. equity shares of…………………… each

`………………… Called up (as per List ‘G’)

Estimated Surplus/Deficiency as regards Members] (as per List ‘H’)

Lists A to G containing details of assets and liabilities and supplementary schedules are not given. Their contents is as given below

1. List A gives a complete list of assets which are not in the hands of or pledged in favour of secured creditors

2. List B gives the details of assets which are specifically pledged with creditors both fully secured and partly secured

3. List C is a list of preferential creditors and the amount due

4. List D is the details of debenture holders having a floating charge

5. List E contains names of unsecured creditors and the amount due

6. List F gives the details and holding of preference shareholders

7. List G is a list of equity shareholders together with the amount of shares held

List H is a statement showing how the surplus or deficiency in the statement of affairs arose as a result of profits and losses of the given.

Illustration

The following information is extracted from books of Mehsana Limited on 31st July, 2012 on which date a winding up order was made.

Unsecured creditors	3,50,000
Salaries due for five months	20,000
Managing director’s remuneration	30,000
Bills payable	1,06,000
Debtors — good 4,	30,000
doubtful (estimated to produce rs. 62,000)	1,30,000
— bad	88,000
Bills receivable (good ` 10,000)	16,000
Bank overdraft	40,000
Land (estimated to produce Rs.5,00,000)	3,60,000
Stock (estimated to produceRs.5,80,000)	8,20,000
Furniture and fixtures	80,000
Cash in hand	4,000
Estimated liability for bills discounted	60,000
Secured creditors holding first mortgage on land	4,00,000
Partly secured creditors holding second mortgage on land	2,00,000
Weekly wages unpaid	6,000
Liabilities under workmen’s compensation Act,1925	2,000
Income tax due	8,000
5000 9% Mortgage debentures of 100 each interest payable to 30th June and 31st December, paid 30th June, 2012	5,00,000
Share capital :
20,000 10% preference share s of ` 10 each	2,00,000
50,000 Equity shares of ` 10 each	5,00,000
General reserve since 31st December, 2004	1,00,000

In 2009, the company earned profit of Rs. 4, 50,000 but thereafter it suffered trading losses totaling Rs. 5,84,000. The company also suffered a speculation loss of Rs. 50,000 during the year 2010. Excise authorities imposed a penalty of Rs. 3,50,000 in 2011 for evasion of tax which was paid in 2012.

From the foregoing information, prepare the Statement of Affairs and the Deficiency Account.

Solution

Unsecured Creditors as per List E :	Rs.
Unsecured creditors	3,50,000
One month’s Salaries (4 month’ salaries are preferential)	4,000
Managing Director’s Remuneration	30,000
Bills Payable	1,06,000
Bank Overdraft	40,000
Liability on Bills Discounted	60,000
Amount uncovered in respect of partly secured creditors
(` 2,00,000 – ` 1,00,000 value of security of second mortgage on land)	1,00,000
	6,90,000
Preferential creditors as per List C: `	Rs.
Salaries for 4 months	16,000
Weekly wages	6,000
Liabilities under Workmen’s Compensation Act, 1925	2,000
Income Tax due	8 ,000
	32,000

LUCKY LTD (IN LIQUIDATION)
STATEMENT OF AFFAIRS
As on July, 2008

Estimated
realisable
value

Assets
Assets not specifically pledged (as per list A)
Cash in hand	4,000
Bills Receivable	10,000
Trade Debtors	4,92,000
Stock	5,80,000
Furniture and Fixtures	80,000

Assets specifically pledged (as per List B estimated

(a) Estimated realisable values

Rs.

(b) Due to Secured Creditors

Rs.

(d) Surplus carried to last colum

Rs.

Land 5,00,000 6,00,000 1,00,000

Estimated total assets available for preferential creditors, debenture holders 11,66,000
secured by a floating charge and unsecured creditors

Summary of Gross Assets:	Rs.
Specifically pledged	5,00,000
Others	11,66,000
	16,66,000

	Estimated total assets available for Preferential Creditors, Debenture Holders secured by floating charge and other creditors carried forward		11,66,000
Gross Liabilities Rs.	Liabilities (to be deducted from surplus or added to deficiency as the case may be )
5,20,000	Secured creditors (as per list B ) to the extent to which claims are estimated to be covered by assets specifically pledged
32,000	Preferential Creditors (as per list C)		32,000
	Estimated balance of assets available for debenture holders secured by a floating charge and unsecured creditors		11,34,000
5,00,000	Debenture holders secured by a floating charge (as per list D)	5,00,000
3,750	Interest due for 1 month (july, 2010) @ 9% p.a.	3,750	5,03,750
	Estimated surplus as regards debenture holders		6,30,250
6,90,000	Unsecured creditors (as per list E)		6,90,000
——————–	Estimated deficiency as regards creditors, being the difference between gross liabilities and gross assets		59,750
17,25,750
	Issued and called up capital:
	20,000 10% Preference shares of Rs. 10 each fully paid (as per list F)		2,00,000
	50,000 equity shares of Rs.10 each fully paid (as per list G)		5,00,000
	Estimated Deficiency as regards contributories (as per list H)		7,59,750

DEFICIENCY ACCOUNT (LIST H)

Particulars	Amount	Particulars	Amount
TO EXCESS OF ASSET OVER CAPITAL	1,00,000	BY NET TRADING LOSSES AFTER	5,87,750
TO NET TRADING ASSSET	4,50,.000	DEPRICIATION , TAXATION ETC
TO PROFITS AND INCOME OTHER	1,40,000	BY LOSSES OTHER THAN
THAN TRADING PROFITS		TRADING LOSSES
TO DEFICENCY	7,59,750	SEPECULATION LOSS 50,000
		PENALTY IMPOSED BY
		EXISCE AUTORITIES 3,50,000	4,00,000
		BY ASTIMATED LOSSES NOW
		WRITTEN OFF
		B/R 6,000
		DEBTORS 1,56,000
		STOCK 2,40,000
	———————	CONTIGENT LIABILTY 60,000	4,62,000
	14,49,750		14,49,750

LIQUIDQTORS FINAL STATEMENT OF ACCOUNTS

The main job of the liquidator is to collect the assets of the company & realise them & distribute the money realised among right claimants. For this purpose he maintains a cash book for recording the receipts & payments & is required to submit an abstract of the cash book to the court in case of compulsory winding up & to the company in case of voluntary winding up. The liquidator is also required to prepare an account known as the Liquidator’s Final Statement of accounts after the affairs of the company are fully wound up.

FORMAT OF LIQIDATOR’S FINAL STATEMENT OF ACCOUNT

Receipts	Amount	Payment
To Assets Realised :-		By Legal Charges
– Cash at Bank		By Liquidation Expenses
– Cash in Hand		By Liquidator Remuneration
– Marketable Securities		By Preferential Creditors
– Bills Receivable		By Debenture-holders (having a floating charge on the assets of the co.)
– Trade Debtors		By Unsecured Creditors
– Stock		By Preference Shareholders
– Freehold property		By Equity Shareholders
– Plant and Machinery
– Furniture and Fittings
To Surplus from Securities held by Secured Creditors
To Proceeds of calls made on contributories

Illustration :

The position of Valueless Ltd. on its liquidation is as under:
Issued and paid up Capital:

5,000 10% preference shares of Rs.100 each fully paid.

7,000 Equity shares of Rs.100 each fully paid.

6,000 Equity shares of Rs.50 each Rs. 30 per share paid.

Calls in Arrears are Rs. 20,000 and Calls received in Advance Rs.17,000. Preference Dividends are in arrears for one year. Amount left with the liquidator after discharging all liabilities is Rs.8,27,000. Articles of Association of the company provide for payment of preference dividend arrears in priority to return of equity capital. You are required to prepare the Liquidators final statement of account.

Solution

LIQUIDATOR FINAL STATEMENT OF ACCOUNT

Receipt	Amount (Rs.)		Amount (Rs.)
Cash	8,27,000	Calls in advance	17,000
Realisation from calls in arrears	20,000	Preference dividend	50,000
		Preference shareholders	5,00,000
		Equity share holders of Rs 100 each (` 40 per share)	2,80,000
	8,47,000		8,47,000

Working Note Rs.

Cash account balance		8,27,000
Less: Payment for dividend	50,000
Preference shareholders	5,00,000
Calls in advance	17,000	5,67,000
		2,60,000
Add: Calls in arrears		20,000
		2,80,000
Add: Amount to be received from equity shareholders of ` 50 each (6,000 X 20)		1,20,000
Amount disposable		4,00,000

Number of equivalent equity shares:
7,000 shares of Rs.100 each = 14,000 shares of Rs. 50 each
6,000 shares of Rs. 50 each = 6,000 shares of Rs.50 each
= 20,000 shares of Rs. 50 each

Final payment to equity shareholders

= Total number of equivalent equity shares

Amount left for distribution

=Rs. 4,00,000 / 20,000 shares

=Rs. 20 per share to equity shareholders of ` 50 each.

Therefore for equity shareholders of Rs.100 each , the amount payable would be
=Rs. 40 per share.

Calls in advance would be paid first for paying the shareholders on prorata basis. Equity shareholders of Rs.50 each have to pay Rs.20 and receive Rs.20 each. As a result, they would be getting nothing in return.

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