The document discusses buyback of shares by various companies. It provides details such as company name, buyback price per share, meeting date for approval and record date for various companies. It then provides more details about Indiabulls Real Estate's buyback offer including offer size, number of shares, buyback price and type of buyback. Finally, it discusses the concept of buyback of shares by a company in general and some objectives and advantages of share buyback.
Introduction and Accounting for Buy-back of Shares in India as per the Companies Act 2013 and other rules.
It will be useful for the students of B. Com., B.Com.(H), CA, CS and other professional courses, studying Corporate Accounting.
Introduction and Accounting for Buy-back of Shares in India as per the Companies Act 2013 and other rules.
It will be useful for the students of B. Com., B.Com.(H), CA, CS and other professional courses, studying Corporate Accounting.
1. Origin Of Companies Act in India
2. What is a Company?
3. Definition & Characteristics
4. Different Type Of Entities:
a. On Basis Of Liability
b. On Basis Of Registration
5. Small Company
6. Private Company
7. Public Company
8. Unlimited Company
9. Foreign Company
10. Government Company
11. Holding, Subsidiary, Associate Company
12. Investment Companies
13. Promoters
14. Incorporation Of Registration
15. MOA, AOA
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DO YOU HAVE A DIN ? THEN UPDATE YOUR DETAILS WITH MCA
DIR-3 KYC (DO YOU HAVE A DIN? THEN UPDATE YOUR DETAILS WITH MCA!!) CS SAVEESH K.V, COMPANY SECRETARY IN CALICUT FOR CORPORATE SOLUTIONS WORLD AHEAD
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1. Origin Of Companies Act in India
2. What is a Company?
3. Definition & Characteristics
4. Different Type Of Entities:
a. On Basis Of Liability
b. On Basis Of Registration
5. Small Company
6. Private Company
7. Public Company
8. Unlimited Company
9. Foreign Company
10. Government Company
11. Holding, Subsidiary, Associate Company
12. Investment Companies
13. Promoters
14. Incorporation Of Registration
15. MOA, AOA
16. Tata Sons Vs Cyrus Mistry
17. Vodafone Tax Case
DO YOU HAVE A DIN ? THEN UPDATE YOUR DETAILS WITH MCA
DIR-3 KYC (DO YOU HAVE A DIN? THEN UPDATE YOUR DETAILS WITH MCA!!) CS SAVEESH K.V, COMPANY SECRETARY IN CALICUT FOR CORPORATE SOLUTIONS WORLD AHEAD
OBJECTIVE
Merger and Amalgamation (M&A) is one of the forms of Corporate Restructuring. M&A transactions are generally done to diversify the business, reduce competition, exercise increased scale of operations, to focus on core businesses to streamline costs and improve profit margins, etc. Provisions for merger and amalgamation under Companies Act, 2013 also includes demerger. The webinar deals with the provisions of merger and amalgamation enshrined in Companies Act, 2013 read with Rules made there under, legal formalities involved and judicial precedents.
OBJECTIVE
Winding up is the final stage in the business cycle of a Company. It is the process of closing down the legal existence of a company. It can be done either by the Company on its own (voluntary winding up) or by an order passed by the Tribunal (compulsory winding up). The webinar covers the aspects of various provisions involved in winding up as enshrined in Companies Act, 2013 along with judicial precedents.
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This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
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• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
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Buy back of shares
1. Buy back of Shares
Presented by:
Harshit Garg
Assistant Professor
IBM (UG)
BCCC 0011 Company Accounts And
Practices
1
2. Company Buyback Price Meeting Date Record Date
JB Chemicals ₹330 12 Nov 19 22 Nov 19
Welspun Corp ₹140 15 May 19 05 Jul 19
Star Cement ₹130 21 Jun 19 05 Jul 19
Smartlink Holdings ₹130 14 Jun 19 01 Nov 19
Adani Ports ₹500 04 Jun 19 21 Jun 19
Triveni Eng. ₹100 03 Jun 19 19 Jun 19
FDC ₹350 24 May 19 07 Jun 19
BSE India ₹680 07 May 19 -
Greaves Cotton ₹175 02 May 19 -
KPR Mills ₹702 29 Apr 19 19 Jun 19
SKP Securities ₹70 27 Apr 19 -
Sasken ₹850 23 Apr 19 05 Jul 19
Balrampur Chini ₹175 05 Apr 19 18 Apr 19
Wipro ₹325 16 Apr 19 21 Jun 19
Mindtree Buyback - 26 Mar 19 PostPoned
Aarti Drugs ₹900 15 Mar 19 29 Mar 19
BCCC 0011 Company Accounts And
Practices
2
3. Indiabulls Real Estate Buy Back 2019
Offer Details
Buyback Record Date: -
Board Meeting Approval: 11-Oct-2019
Public Announcement: 11-Oct-2019
Buyback Offer: ₹500 Crore
Buyback Offer Size: 11%
Number of Shares: 50000000
Share Face Value: ₹2
Buyback Price: ₹100
Buyback Type: Tender Offer
BCCC 0011 Company Accounts And
Practices
3
4. Indiabulls Real Estate buyback
• Indiabulls Real Estate buyback of 50000000 equity shares which is
around 11% of all the existing number of equity shares at a price
of ₹100 per equity share. The buyback offers not exceeding ₹500
crores of total buyback offer size
• Indiabulls Real Estate is one of the leading real estate developers in
India. Their gross development value is around ₹32000 crore. Their
net worth is around ₹7000 crore in March 2018. They have around
15 ongoing projects with a total area of around 34 million square
feet. IBREALEST has been assigned a credit rating of AA- for long
term debt, one of the highest in the industry. Indiabulls Real Estate
NSE Code is IBREALEST and BSE Code is 532832.
• Price oct 19 Rs.53
BCCC 0011 Company Accounts And
Practices
4
5. Buy back of shares
• Buy back of shares means purchase of its own
shares by a company.
• When shares are bought back by a company,
they have to be cancelled by the company.
• Thus, shares buy back results in decrease in
share capital of the company.
• A company cannot buy its own shares for the
purpose of investment.
BCCC 0011 Company Accounts And
Practices
5
6. • Q. Write the name of the process in which a
company purchase of its own shares ?
• ANS-
BCCC 0011 Company Accounts And
Practices
6
7. Q. Which are the features of buyback
A. When shares are bought back by a company,
they have to be resale by the company.
B. Thus, shares buy back results in Increase in
share capital of the company.
C. A company can buy its own shares for the
purpose of investment
D. None of the above
BCCC 0011 Company Accounts And
Practices
7
8. Objectives/Advantages of Buy-Back of
shares
• To improve Earning per Share;
• To use ideal cash;
• To give confidence to the Shareholders at the
time of falling price;
• To increase promoters shareholding to reduce
the chances of takeover;
• To improve return on capital ,return on net-
worth;
• To return surplus cash to the Shareholder.
BCCC 0011 Company Accounts And
Practices
8
9. Q. Which is the objectives of buyback
A. To improve Earning per Share;
B. To use ideal cash;
C. It motivates employees
D. To improve return on capital
ANS –A,B,D
BCCC 0011 Company Accounts And
Practices
9
10. The Companies Act, 2013 under
Section 68 (1)
• permits companies to buy back their own
shares and other specified securities out of:
• (i) its free reserves; or
• (ii) the securities premium account; or
• (iii) the proceeds of the issue of any shares or
other specified securities.
However, no buy-back of any kind of shares can
be made out of the proceeds of an earlier issue
of the same kind of shares.
BCCC 0011 Company Accounts And
Practices
10
11. Q. What are the sources of buy back of share of
a company
A. its free reserves; or
B. the securities premium account; or
C. the proceeds of the issue of any type of
securities
D. All of the above
BCCC 0011 Company Accounts And
Practices
11
12. Conditions of Buy-back:-
• As per Section 68 of the Companies Act, 2013 the conditions for Buy-back of
shares are-
• Articles must authorise otherwise Amend the Article by passing Special
Resolution in General Meeting.
• For buy-back we need to pass Special Resolution in General Meeting, but if the
buy-back is upto 10%, then a Resolution at Board Meeting need to be passed .
• Maximum number of Shares that can be brought back in a financial year is
twenty-five percent of its paid up share capital.
• Maximum amount of Shares that can be brought back in a financial year is
twenty-five percent of paid up share capital and free reserves (where paid up
share capital includes equity share capital and preference share capital; & free
reserves includes securities premium). Post buy-back debt-equity ratio cannot
exceed 2:1.
• Only fully paid up shares can be brought back in a financial year.
• Company must declare its insolvency in Form SH-9 to Register of Companies,
signed by Atleast 2 Directors out of which one must be a Managing Director, if
any. BCCC 0011 Company Accounts And
Practices
12
13. • The notice of the meeting for which the Special Resolution is proposed to
be passed shall be accompanied by a explanatory statement stating
• 1. a full and complete disclosure of all the material facts;
• 2. the necessity of buy-back;
• 3. the class of shares intended to be bought back;
• 4. the amount invested under the buyback;
• 5. the time limit for completion of buyback;
• The Company must maintain a Register of buy-back in Form SH-10.
• Now, Submit Return of buy-back in Form SH-11 Annexed with Compliance
Certificate in Form SH-15, Signed by 2 Directors out of which One must be
a Managing Director, if any.
• A Company should extinguish and physically destroy shares bought back
within 7 days of completion of the buy-back.
• Observe 6 months cooling period i.e. no fresh issue of share is allowed.
• No offer of buy-back should be made by a company within a period of one
year from the date of the closure of the preceding offer of buy-back.
• The buy-back should be completed within a period of one year from the
date of passing of Special Resolution or Board Resolution, as the case may
be
BCCC 0011 Company Accounts And
Practices
13
14. Restrictions on Buy-back of Securities
in certain circumstances According to section 70 of the
Companies Act, 2013, A Company should not buy-back its
securities or other specified securities , directly or indirectly
• Through any subsidiary including its own subsidiaries; or
• Through investment or group of investment Companies; or
• When Company has defaulted in repayment of deposits or
interest payable thereon, or in redemption of debentures
or preference shares or repayment of any term loan. The
prohibition is lifted if the default has been remedied and a
period of 3 years has elapsed after such default ceased to
subsist.
• When Company has defaulted in filing of Annual Return,
declaration of dividend & financial statement.
BCCC 0011 Company Accounts And
Practices
14
16. (a) Free Reserves:
• If buy-back is made from free reserves a sum
equal to the nominal value of shares so
bought must be transferred to Capital
Redemption Reserve.
BCCC 0011 Company Accounts And
Practices
16
17. However, free reserve
includes:
Free Reserve means the reserve which is free for
distribution of dividend as per last Balance Sheet
(a) credit Balance of General Reserve
and Profit and Loss Account;
(b) Realised Capital Profit
(which arises from the sale of investment or fixed assets);
(c) Dividend Equalisation Reserve;
(d)Dividend Fluctuation Reserve;
(e) Subsidy receive from the Government in cash;
(f) Sinking Fund.
BCCC 0011 Company Accounts And
Practices
17
18. Q. -In which account the nominal value of shares
so bought must be transferred?
BCCC 0011 Company Accounts And
Practices
18
19. • Q. which is the free reserves among the
followings
A. General Reserve
B. PBDD
C. Profit and Loss Account;
D. Dividend Fluctuation Reserve;
ANS – C,d,a
BCCC 0011 Company Accounts And
Practices
19
20. • Illustration 1 (Buy-Back at Par):
• ‘X’ Co. Ltd., buys back its own 1,50,000 equity
shares of Rs. 10 each, at par. The company has
sufficient profits otherwise available for
dividend besides general reserve. No fresh
issue of shares is made for this purpose. The
shares are fully paid up. Journalise the
transactions.
BCCC 0011 Company Accounts And
Practices
20
21. IN THE BOOKS OF S CO.LTD
JOURNAL ENTRIES
Dr Cr
Equity share capital A/c (150000x10) Dr 1500000
To Equity shareholder 150000
(Being amount due on equity shares holders)
Equity shareholder A/c Dr 1500000
To Bank A/c 1500000
(Being company buyback 150000 equity shares @Rs 10 each)
General Reserve A/c Dr 1500000
To Capital Redemption Reserve A/c 1500000
(Being journal entry of transferring
nominal value of share bought back into
capital redemption reserve)
BCCC 0011 Company Accounts And
Practices
21
22. Question -3
• (Where Shares are Partly Paid Up):
• The Evergreen Co. Ltd., resolved by a special
resolution, to buy-back 1,00,000 of its equity
shares of the face value of Rs. 10 each, on
which Rs. 8 has been paid up. no fresh issue of
shares was made. Journalise the transactions.
BCCC 0011 Company Accounts And
Practices
22
23. IN THE BOOKS OF Evergreen Co. Ltd.
JOURNAL ENTRIES
Dr Cr
Equity share final call A/c Dr(100000x2) 200000
To Equity share capital a/c 200000
(Being Making a final call on 100000 shares)
Bank A/c Dr 200000
To Equity share final call A/c 200000
(Being final call money received)
Equity share capital A/c (100000x10) Dr 1000000
To Equity shareholder 1000000
(Being company buyback 100000 equity shares
@Rs 10 each)
Equity shareholder A/c Dr 1000000
To Bank A/c 1000000
(Being payment made to equity shares holders)
General Reserve A/c Dr 1000000
To Capital Redemption Reserve A/c 1000000
(Being transferring nominal value of share bought
back into capital redemption reserve)
BCCC 0011 Company Accounts And
Practices
23
24. Ques.- Can a company buyback a party paid up
equity share?
• Ans- NO
• Ques. What is the journal entry of payment to
shareholders
• Ans-
• Quest –What is the journal entry of transferring
nominal value of share bought back is ?
• Ans-
BCCC 0011 Company Accounts And
Practices
24
25. Question -2
• ABCD Ltd. has the balance in its Securities
Premium Account and General Reserve Account
were Rs. 40,00,00,000 and 50,00,00,000,
respectively. The company bought back
1,00,00,000 shares at a price of Rs. 30 each, face
value Rs. 10 and issued cheques for this purpose
from its bank account:
• What will be the journal entries for such a deal?
BCCC 0011 Company Accounts And
Practices
25
26. IN THE BOOKS OF Y Ltd.
JOURNAL ENTRIES
Dr Cr
Equity share capital A/c (10000000x10) Dr 100000000
Security Premium A/c (10000000x20) Dr 200000000
To Equity shareholder(10000000x30) 300000000
(Being company buyback 10000000 equity shares @Rs 30 each)
Equity shareholder A/c Dr 300000000
To Bank A/c 300000000
(Being payment made to equity shares holders)
Security Premium A/c Dr 100000000
To Capital Redemption Reserve A/c 100000000
(Being transferring nominal value of share
bought back into capital redemption reserve)
BCCC 0011 Company Accounts And
Practices
26
27. • X Ltd. Already have issued 2,00,000 Equity
shares of Rs. 10 each. It wanted to buy back
40,000 equity shares at par. It issued 8%,
4,000, Preference Shares of Rs. 100 each, the
proceeds being utilised for the purpose of
buy- back. Expenses relating to the buy-back
amounted to Rs. 25,000:
• Show the entries.
BCCC 0011 Company Accounts And
Practices
27
28. IN THE BOOKS OF X. Ltd.
JOURNAL ENTRIES
Dr Cr
Bank A/c (4000x100) Dr 400000
To 8% Prefernce Share Capital A/c 400000
(Being Prefernce Shares issued)
Equity share capital A/c (40000x10) Dr 400000
To Equity shareholder 400000
(Being company buyback 40000 equity shares @Rs 10 each)
Equity shareholder A/c Dr 400000
To Bank A/c 400000
(Being payment made to equity shares holders)
General Reserve A/c Dr 400000
To Capital Redemption Reserve A/c 400000
(Being transferring nominal value of share bought back into
capital redemption reserve)
Buy back expenses A/c Dr 25000
To Bank A/c 25000
(Being buyback expenses are paid)BCCC 0011 Company Accounts And
Practices
28
29. Y Ltd. presented the following
Balance Sheet as on 31.12.2007:
On 1.1.2008 the company bought back 25,000 equities shares @ Rs.
20 each. The company issued 2,000, 10% Preference shares of Rs. 100
each for the purpose.
Show the entries.
BCCC 0011 Company Accounts And
Practices
29
30. In the books of Y ltd
JOURNAL ENTRIES
Dr Cr
Bank A/c (2000x100) Dr 200000
To 10% Prefernce Share Capital A/c 200000
(Being Prefernce Shares issued)
Equity share capital A/c (25000x10) Dr 250000
Security Premium A/c Dr 200000
General Reserve A/c Dr 50000
To Equity shareholder(25000x20) 500000
(Being company buyback 25000 equity shares @Rs
20 each)
Equity shareholder A/c Dr 500000
To Bank A/c 500000
(Being payment made to equity shares holders)
General Reserve A/c Dr 50000
To Capital Redemption Reserve A/c 50000
(Being transferring nominal value of share bought back into
capital redemption reserve)
BCCC 0011 Company Accounts And
Practices
30
31. Illustration 3 (Buy-Back of Shares):
The following is the Balance Sheet of
Ramco as on 31st Dec.:
On 1st April, the share-holders of the company have approved the scheme
of buy-back of equity shares as under:
(a) 20% of the equity shares would be bought back at Rs. 16 per share.
(b) General Reserve balance may be utilised for the purpose.
(c) Premium paid on buy-back of shares should be met from the Securities Premium
Account.
(d) Investments would be sold for Rs. 7, 80,000.
Pass journal entries to record the above transactions and prepare the Balance Sheet of
the Company immediately after the buy-back of shares.BCCC 0011 Company Accounts And
Practices
31
33. • Long Ltd. issued 1,00,000 equity shares of Rs.
10 each, of which 20,000 shares were bought
back @ Rs. 90 per share. The company issued
1,000, 8% Preference shares of Rs. 100 per
share. The company had Rs. 50,000 in
Securities Premium A/c and Rs. 80,000 in
General Reserve A/c. Show the entries:
BCCC 0011 Company Accounts And
Practices
33