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2021 (1) TMI 574 - Tri - Companies LawReduction in share capital - cancellation/extinguishment of shares as approved by the share-holders at their annual general meeting - section 66 read with section 52 of the Companies Act, 2013 read with the National Company Law Tribunal (Procedure for reduction of share capital of Company) Rules, 2016 and the Rules framed thereunder - HELD THAT:- From the balance-sheets submitted by the company, it is noted that as on August 24, 2020 as per books, the company is having negative net worth/shareholders funds of ₹ 1,609.66 lakhs (share capital of ₹ 698.50 lakhs + other equity of Rs. (-) 2,308.16 lakhs) and borrowings and inter corporate loans are to the tune of ₹ 11,354.43 lakhs. Other equity consists of share premium account and accumulated losses. The book value per share as on August 24, 2020 is Rs. (-) 23.04. Further, for the previous financial year 2019-20, the company's total income is ₹ 1,962.45 lakhs and interest payments (finance cost) is ₹ 1,019.37 lakhs - Based on the accounting treatment, on capital reduction, the negative net worth/shareholders funds of the company as per books may go to ₹ 7,014.59 lakhs (share capital of ₹ 1 lakh + other equity of Rs. (-) 7,015.59 lakhs), the book value per share to Rs. (-) 70,110.81 and the companies borrowings and inter corporate loans to the tune of ₹ 11,354.43 lakhs. In view of negative net worth as per books, and negative book value per share, this Adjudicating Authority is of the considered view that the proposed capital reduction by way of return of capital to its shareholders is not in the overall interest of the company and its stakeholders - Petition allowed.
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