Pioneer Distilleries Limited manufacturing ethanol and industrial alcohol is listed on the Bombay Stock Exchange. For the accounting year ended 31st March of 2010, Pioneer Distilleries came out with its annual report.

The following are excerpts forming part of the schedules related to shareholders funds portion of Pioneer Distilleries Limited.

“On 24th July 2010, remaining 8,00,000 convertible warrants of ₹10 each issued at a premium of ₹26.10 per warrant were converted into 8,00,000 equity shares of ₹10 each, resulting in increase in the paid-up capital of the Company from ₹12,58,82,000 to ₹13,38,82,000.” Based on the above information, please answer the following questions:

(a) During FY2009 and 2010, please explain the differences between the Pioneer Distilleries authorized capital, issued and subscribed capital and paid-up capital.

(b) Was there any issue of shares by Pioneer Distilleries Limited during the two financial years? If so, please prepare journal entries related to same? Make relevant assumptions.

(c) Is the company expanding or declining? Is the company having any future plans related to the share capital? Discuss and take a call on the same.

(d) Why has the company created Capital Redemption Reserve?

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SCHEDULE 1: SHARE CAPITAL Authorized: 25,00,000 1,75,00,000 Issued and Subscribed: 23,50,000 1,26,50,600 Paid up: 23,50,000 1,25,88,200 Preference Shares of 10 each Equity Shares of 10 each (Previous year 1,75,00,000 @ 10 each 5% Redeemable Preference Shares of 10 each Equity Shares of 10 each (Previous year 1,18,20,600 @ 10 each) 5% Redeemable Preference Shares of 10 each Equity Shares of 10 each (Previous year 1,17,58,200 @ 10 each) Current year 2,50,00,000 17,50,00,000 20,00,00,000 65,00,000 12,65,06,000 13,30,06,000 65,00,000 12,58,82,000 Previous year 2,50,00,000 17,50,00,000 20,00,00,000 2,35,00,000 11,82,06,000 14, 17,06,000 2,35,00,000 11,75,82,000