president & cfo - UB Group

Consolidated Financial StatementSchedules forming part of account for the year ended March 31, 2009 (Contd.)2. A. (Contd.)(II) Pursuant to the Scheme, Equity Shares to be issued as above include 4,925,231 Equity Shares of Rs.10/- eachfully paid up to be issued to Palmer Investment Group Limited (Palmer), R.G.Shaw & Company Limited (R GShaw), JIHL Nominees Limited (JIHL Nominees), Shaw Scott & Company Limited (Shaw Scott), Shaw Darby &Company Limited (Shaw Darby) and Thames Rice Milling Company Limited (Thames Rice), subsidiaries of theCompany, in exchange for the 20,932,244 Equity Shares of Rs.10/- each fully paid up held by them in the sharecapital of SWCL, in the proportion of Equity Shares held by them respectively.(III) Pursuant to the Scheme, 10,282,553 Equity Shares of Rs.10/- each fully paid up held by SWCL and 1,306,431Equity Shares of Rs.10/- each fully paid up held by Primo in the share capital of the Company were to betransferred to the SWCL Benefit Trust and the Primo Benefit Trust established by virtue of trust deeds datedJuly 25, 2008 for the benefit of SWCL and Primo respectively. Upon the Scheme becoming effective, thebeneficial interest in SWC Benefit Trust and Primo Benefit Trust stands transferred and vested in the USLBenefit Trust established by virtue of trust deed dated September 26, 2006 for the benefit of the Company.Subsequent to the year end, on June 30, 2009 SWCL has sold 10,282,553 Equity Shares held by it in theCompany in the open market, through the stock exchanges and 1,306,431 Equity shares held by Primo in theCompany has been transferred to Primo Benefit Trust on July 6, 2009 which stands vested with USL BenefitTrust in terms of the scheme.(IV) Pursuant to the scheme, the Authorised Share Capital of the Company stands increased and reclassified,without any further act or deed on the part of the Company, including payment of stamp duty and Registrarof Companies fees, by the authorised share capital of the transferor companies amounting to Rs 2,092 Millionand the Memorandum of Association and Articles of Association of the Company stand amended accordinglywithout any further act or deed as the part of the Company.(V) Accounting for AmalgamationThe amalgamation of the Transferor Companies with the Company is accounted for on the basis of thePurchase Method as envisaged in the Accounting Standard (AS) -14 on Accounting for Amalgamationsspecified in the Companies (Accounting Standard) Rules 2006 and in terms of the Scheme, as below:a. All tangible assets [excluding investment in shares held by the Transferor Companies in the Company andthe interest in the USL Benefit Trust in accordance with the terms of the Scheme as explained in Note 2(A) (III) above] and liabilities of the Transferor Companies at their respective fair values.b. Interest in USL Benefit Trust, arising from the terms of the Scheme as explained in Note 2 (A) (III) above,has been accounted as Investment, valued and recorded, in the manner prescribed in the Scheme, at theaverage of the weekly high and low of the closing price of the Company, on the stock exchange wherethe shares of the Company are more frequently traded in terms of turnover, for the period ended sixmonths preceding the Appointed Date, i.e. April 1, 2007, aggregating to Rs. 9,256.006 Million.c. The equity shares directly held by the Company in the Transferor Companies stand cancelled and debitedto General Reserve of the Company. [refer (d) below].d. Rs.7,860.187 Million being the difference between the value of net assets of the Transferor Companiestransferred to the Company (determined as stated above) and the face value of equity shares to be issuedand after adjusting for the equity shares directly held by the Company in the Transferor Companieswhich are cancelled, is credited to General Reserve of the Company. This accounting treatment of thereserve has been prescribed in the Scheme. Had the Scheme not prescribed this treatment, this amountwould have been credited to Capital Reserve.101