The document discusses buybacks of shares by two companies, Binani Cement Ltd and Hindustan Unilever Ltd. Binani Cement Ltd is issuing a public announcement for a buyback of shares in compliance with SEBI regulations, with a closure date of August 10, 2010. Hindustan Unilever's board approved a share buyback of up to Rs. 280 per share not exceeding Rs. 630 crore, as announced last week. The company had cash and bank balances of Rs. 2102.38 crore as of March 31.
The document discusses share buybacks by companies. It defines a share buyback as a company repurchasing its own outstanding shares to reduce the number on the market. This can increase the value of remaining shares or eliminate threats from shareholders seeking control. The document outlines the objectives, conditions, sources of funding, procedures, and penalties for buybacks under Indian law. It notes buybacks can enable faster achievement of capital structure goals but may also signal mismanagement if overpaid for or cash is excessively eroded.
This document discusses the redemption of preference shares and bonus issues. It begins by defining preference shares and outlining their preferential rights over equity shares. It then describes the different types of preference shares, including cumulative, non-cumulative, participative, non-participative, convertible, redeemable, and irredeemable. The document focuses on redeemable preference shares, outlining the key provisions around their redemption according to the Companies Act. It discusses the conditions of redemption, including shares being fully paid, redeemed out of profits or fresh issue, and the creation of a capital redemption reserve. Finally, it provides journal entries for the redemption process.
Forfeiture of Shares : Company Accounts Guru Aarat
This document discusses the accounting treatment for forfeiture of shares that were originally issued at a premium or discount.
For shares issued at a premium, if the premium was received before forfeiture, the share capital account and unpaid calls account will be debited and the share forfeiture account credited. If the premium was not received, the share capital, security premium, unpaid calls, and share forfeiture accounts will be adjusted.
For shares issued at a discount, the share capital account will be debited and the discount on issue of shares, unpaid calls, and share forfeiture accounts will be credited upon forfeiture.
Any profit made upon reissuing forfeited shares is transferred to a capital reserve account through adjusting
(1) The document discusses various types of shares such as equity shares, preference shares, and their characteristics. It explains concepts like share capital, types of share capital, rights of shareholders, and types of preference shares.
(2) It also covers topics like allotment of shares, declaration of dividends, transfer of shares, transmission of shares, and increase of share capital. Methods to increase capital include further issue of shares, rights issues, and conversion of loans or debentures into equity.
(3) SEBI guidelines related to rights issues are also summarized, setting limits on fund raising and requiring measures like underwriting and minimum subscription.
The document defines and explains different types of share capital that a company may have:
Authorized capital is the maximum capital allowed by the company's Memorandum of Association. Issued capital is the shares offered to the public. Called-up capital is the issued capital that shareholders are required to pay. Paid-up capital is the amount actually paid by shareholders, while uncalled capital is the remaining amount that can be called later. Reserve capital refers to the portion of uncalled capital that can only be called in the event of winding up.
Redemption of debentures by N.Bala Murali Krishnabala13128
1. Redemption of debentures means repaying the amount owed to debenture holders when the debentures mature. There are various conditions that must be met like timing of payment, amount to be paid, mode of payment, and source of funds.
2. Companies must maintain a Debenture Redemption Reserve (DRR) to ensure they have adequate funds for redemption. The DRR is created out of profits and maintained until all debentures are redeemed.
3. Debentures can be redeemed through lump sum payment on maturity, in installments by lottery, or by purchasing debentures on the open market for cancellation. Journal entries are passed
A holding company owns shares of other companies to control them but does not produce goods or services itself. It allows ownership and control of multiple companies to reduce risk for owners. A holding company controls a subsidiary's board or holds over half its equity shares. Consolidating financial statements combines the holding company and subsidiaries' income statements and balance sheets, eliminating intercompany transactions and investments to show the group's overall operating results and financial position.
The document discusses share buybacks by companies. It defines a share buyback as a company repurchasing its own outstanding shares to reduce the number on the market. This can increase the value of remaining shares or eliminate threats from shareholders seeking control. The document outlines the objectives, conditions, sources of funding, procedures, and penalties for buybacks under Indian law. It notes buybacks can enable faster achievement of capital structure goals but may also signal mismanagement if overpaid for or cash is excessively eroded.
This document discusses the redemption of preference shares and bonus issues. It begins by defining preference shares and outlining their preferential rights over equity shares. It then describes the different types of preference shares, including cumulative, non-cumulative, participative, non-participative, convertible, redeemable, and irredeemable. The document focuses on redeemable preference shares, outlining the key provisions around their redemption according to the Companies Act. It discusses the conditions of redemption, including shares being fully paid, redeemed out of profits or fresh issue, and the creation of a capital redemption reserve. Finally, it provides journal entries for the redemption process.
Forfeiture of Shares : Company Accounts Guru Aarat
This document discusses the accounting treatment for forfeiture of shares that were originally issued at a premium or discount.
For shares issued at a premium, if the premium was received before forfeiture, the share capital account and unpaid calls account will be debited and the share forfeiture account credited. If the premium was not received, the share capital, security premium, unpaid calls, and share forfeiture accounts will be adjusted.
For shares issued at a discount, the share capital account will be debited and the discount on issue of shares, unpaid calls, and share forfeiture accounts will be credited upon forfeiture.
Any profit made upon reissuing forfeited shares is transferred to a capital reserve account through adjusting
(1) The document discusses various types of shares such as equity shares, preference shares, and their characteristics. It explains concepts like share capital, types of share capital, rights of shareholders, and types of preference shares.
(2) It also covers topics like allotment of shares, declaration of dividends, transfer of shares, transmission of shares, and increase of share capital. Methods to increase capital include further issue of shares, rights issues, and conversion of loans or debentures into equity.
(3) SEBI guidelines related to rights issues are also summarized, setting limits on fund raising and requiring measures like underwriting and minimum subscription.
The document defines and explains different types of share capital that a company may have:
Authorized capital is the maximum capital allowed by the company's Memorandum of Association. Issued capital is the shares offered to the public. Called-up capital is the issued capital that shareholders are required to pay. Paid-up capital is the amount actually paid by shareholders, while uncalled capital is the remaining amount that can be called later. Reserve capital refers to the portion of uncalled capital that can only be called in the event of winding up.
Redemption of debentures by N.Bala Murali Krishnabala13128
1. Redemption of debentures means repaying the amount owed to debenture holders when the debentures mature. There are various conditions that must be met like timing of payment, amount to be paid, mode of payment, and source of funds.
2. Companies must maintain a Debenture Redemption Reserve (DRR) to ensure they have adequate funds for redemption. The DRR is created out of profits and maintained until all debentures are redeemed.
3. Debentures can be redeemed through lump sum payment on maturity, in installments by lottery, or by purchasing debentures on the open market for cancellation. Journal entries are passed
A holding company owns shares of other companies to control them but does not produce goods or services itself. It allows ownership and control of multiple companies to reduce risk for owners. A holding company controls a subsidiary's board or holds over half its equity shares. Consolidating financial statements combines the holding company and subsidiaries' income statements and balance sheets, eliminating intercompany transactions and investments to show the group's overall operating results and financial position.
There are three main types of shares that can be issued by companies: equity shares, preference shares, and deferred shares. Equity shares do not have a fixed dividend rate and holders have voting rights. Preference shares have a fixed dividend rate and preferential rights to repayment of capital. There are various kinds of preference shares based on factors like cumulative/non-cumulative dividends and participation in profits. Deferred shares rank below equity and preference shares for dividend payments and repayment of capital.
This document discusses mergers and amalgamations under Indian law. It defines mergers as a transaction where one company's assets and liabilities are transferred to another company, which ceases to exist, while its shareholders become shareholders of the acquiring company. Amalgamations involve the transfer of two or more companies' assets and liabilities to a new or existing company, with the amalgamating companies' shareholders becoming shareholders of the transferee company. The document outlines the legal procedures for mergers and amalgamations under the Companies Act of 1956 and describes different types of mergers and amalgamations. It discusses the key motivations for companies to engage in mergers and amalgamations, such as economies of scale, increased market share and revenue, and resource transfers.
This document defines shares and share capital. It explains that a share represents ownership in a company and is offered when more capital is needed. There are equity shares, which are ordinary shares, and preference shares, which have priority rights. Share capital refers to the total capital raised through share issues. The document outlines the types of shares such as authorized, issued, subscribed and paid-up shares. It also describes the process of allotment of shares and differences between transferring and transmitting shares.
Redeemable preference shares are shares that must be repaid by the company according to the terms of issue. A company can only redeem preference shares from undistributed profits or through a fresh issue of shares. If shares are redeemed from profits, the nominal value must be transferred to a capital redemption reserve. Redeemable preference shares can be redeemed either entirely from a fresh issue, entirely from profits, or partially from both. A company cannot issue preference shares that are irredeemable or redeemable after 20 years.
Shares represent an ownership interest in a company. A share certificate is issued to evidence shares, and is signed by at least two directors and the secretary. Shares can be ordinary shares or preference shares, with preference shares having certain features like priority in dividends. Companies can issue shares at a premium, with premium amounts kept separately and only used for specific purposes like issuing bonus shares. Additional shares must generally be offered first to existing shareholders. Companies may pay dividends to shareholders from profits, and bonus shares can be issued to capitalize profits without shareholders paying additional amounts. Various rules must be followed regarding allotment, minimum subscriptions and deposits for share issuance. Shares can be transferred or transmitted to others according to company articles and
1. Allotment refers to the acceptance of an offer to purchase shares. For allotment to be valid, certain requirements must be met including delivery of a prospectus to regulators, minimum application amounts, and minimum subscription levels being received.
2. Shares must also be listed on the stock exchange(s) mentioned in the prospectus.
3. Companies must complete allotment within 30 days of the subscription closing and obtain stock exchange approval for the basis of allotment. They must also complete trading formalities within 7 days of finalizing the allotment basis.
The document discusses buy-back of shares by a company. It introduces buy-back and outlines the key reasons for companies to buy-back shares such as signaling effect and increasing earnings per share. It also discusses the provisions governing buy-back under the Companies Act, 2013 including conditions, process, restrictions and tax treatment. Finally, it describes various methods of buy-back for both listed and unlisted companies.
SHARES - MEANING , DEFINITION , CHARACTERISTICS AND ITS TYPES.KhushiGoyal20
This document defines shares and discusses their key characteristics and types. Shares represent a portion of a company's total share capital and are divided into parts. Each part is called a share. There are two main types of shares: equity shares and preference shares. Equity shares constitute the major portion of a company's shares and holders have voting rights and rights to profits. Preference shares have preferential rights to dividends and repayment of capital over equity shares. Preference shares can be further classified as cumulative, non-cumulative, convertible, redeemable and participating.
This document summarizes key provisions around the appointment and removal of auditors under Section 139-140 of the Companies Act 2013. It discusses the periods of appointment for individual and audit firm auditors, requirements around rotation of auditors and filling casual vacancies. It also outlines the process for reappointing retiring auditors, circumstances allowing removal of auditors before the end of their term, requirements for auditor resignation, and removal of auditors by the central government.
A buyback, also known as a share repurchase, occurs when a company buys back its own outstanding shares from investors to reduce the number of shares available on the open market. Companies may do this to increase share value for remaining investors by reducing supply, or to prevent other shareholders from gaining control. The document outlines the legal provisions and process for companies in India to conduct a buyback according to the Companies Act and SEBI regulations, including establishing a capital redemption reserve and restrictions on further share issues. It provides examples of companies that have announced buybacks during the COVID-19 pandemic.
The document discusses a demerger, where an existing company splits into two separate companies. Shareholders of the original company receive equivalent stakes in the new companies. Reasons for demerging include allowing each company to focus on its core activities and comply with different regulations. The document then provides further details about Welspun Corp Ltd, an Indian pipe manufacturer, and its planned demerger into Welspun Corp Ltd and Welspun Enterprises Ltd to simplify its business structure and allow each entity to focus on different operations.
Amalgamation refers to the merger of two or more companies into one new company. It involves the transfer of two or more companies' businesses to a newly incorporated company. There are two types of amalgamation - amalgamation in the nature of merger and amalgamation in the nature of purchase. Amalgamation can be accounted for using either the pooling of interests method or the purchase method. Disclosures as per Accounting Standard 14 are required in the financial statements following an amalgamation.
The document discusses capital structure, which refers to the types of securities (debt vs equity) and their proportions that make up a company's total capital. An optimal capital structure minimizes a company's cost of capital. Factors that affect a company's capital structure choice include financial leverage, growth stability, cost of capital, risk tolerance, cash flow ability to service debt, firm size and nature, control and flexibility needs, and capital market conditions.
This document discusses different types of company shares. It defines a share and notes there are two main classes: preference shares and equity shares. Preference shares offer a fixed dividend rate and right to capital repayment before equity shares. Equity shares have voting rights but no fixed dividend. The document outlines various types of preference shares, including cumulative, participating, redeemable, and convertible varieties. It also describes employee shares and compares key characteristics of preference versus equity shares.
The document discusses the roles and responsibilities of company directors under Indian law. It defines a director and outlines their legal position as agents of the company. There are different types of directors such as executive, outside, and independent directors. All directors must obtain a Director Identification Number. Directors can be appointed through various means and removed by shareholders, government, or courts. Their duties include attending meetings, not contracting without board consent, disclosing property transfers, and acting with good faith and without negligence.
The document provides information on prospectuses under Pakistani law. It defines a prospectus as a document that invites the public to subscribe to shares or debentures in a company. It must include key details about the company's business, management, financials, and the offering. The summary also outlines the requirements for prospectus content, types of prospectuses including shelf and red herring prospectuses, parties responsible if misstatements are made, and liabilities that can arise from an inaccurate or misleading prospectus.
Investors Protection-Grievances and their Redressal for B.Com, M.ComDr. Toran Lal Verma
Investors in India face high risks of fraud and unethical practices. To address grievances, measures have been established to protect investors, including grievance cells in stock exchanges, the SEBI, and Company Law Board. Common grievances are against companies for issues like delayed payments or transfers, and against brokers for delayed deliveries or payments. Investors can seek resolution through these organizations, courts, or by reporting issues to the press. The SEBI and stock exchanges work to resolve complaints, including suspending trading or transferring stocks of non-compliant companies. This aims to restore investor confidence in India's financial markets.
This presentation is on Security Exchange Board (SEBI) which gives the brief about the SEBI with its objective, function, details about the chairman, rules
The document discusses various aspects of dividends, including:
1) Types of dividends such as interim, final, special dividends.
2) Sources of dividends including current year's profits, previous years' undistributed profits, and capital profits.
3) Procedures for declaring dividends including recommendation by the board of directors, approval by shareholders, payment within 30 days of declaration.
1) A buyback of shares allows a company to purchase its own shares from shareholders. This provides shareholders a way to sell shares back to the company.
2) Historically, companies could only buyback shares with court approval except for redeeming preferential shares. The 1999 Companies Act amendment introduced provisions allowing simpler buybacks.
3) Reasons for companies to buyback shares include returning surplus cash, increasing share value, supporting temporary weak share prices, maintaining capital structure, and preventing unwanted takeovers. Buybacks are funded from free reserves, securities premium, or share/security proceeds.
Share capital is an essential part of a company. Share capital can be equity or preferential shares and must be subscribed to by one or more persons. After shares are allotted, shareholders only have rights like voting and dividends - they have no claim to the money paid for shares. A way for shareholders to realize the price of shares is to transfer them to another person. The Companies Act allows companies to buy back shares directly from shareholders in a process called buy back of shares. Prior to 1999, companies could only buy back shares with court approval but amendments now allow less complex buybacks. Companies must meet various conditions for buybacks like having authorization, passing a board or shareholder resolution, maintaining solvency, and completing the buy
There are three main types of shares that can be issued by companies: equity shares, preference shares, and deferred shares. Equity shares do not have a fixed dividend rate and holders have voting rights. Preference shares have a fixed dividend rate and preferential rights to repayment of capital. There are various kinds of preference shares based on factors like cumulative/non-cumulative dividends and participation in profits. Deferred shares rank below equity and preference shares for dividend payments and repayment of capital.
This document discusses mergers and amalgamations under Indian law. It defines mergers as a transaction where one company's assets and liabilities are transferred to another company, which ceases to exist, while its shareholders become shareholders of the acquiring company. Amalgamations involve the transfer of two or more companies' assets and liabilities to a new or existing company, with the amalgamating companies' shareholders becoming shareholders of the transferee company. The document outlines the legal procedures for mergers and amalgamations under the Companies Act of 1956 and describes different types of mergers and amalgamations. It discusses the key motivations for companies to engage in mergers and amalgamations, such as economies of scale, increased market share and revenue, and resource transfers.
This document defines shares and share capital. It explains that a share represents ownership in a company and is offered when more capital is needed. There are equity shares, which are ordinary shares, and preference shares, which have priority rights. Share capital refers to the total capital raised through share issues. The document outlines the types of shares such as authorized, issued, subscribed and paid-up shares. It also describes the process of allotment of shares and differences between transferring and transmitting shares.
Redeemable preference shares are shares that must be repaid by the company according to the terms of issue. A company can only redeem preference shares from undistributed profits or through a fresh issue of shares. If shares are redeemed from profits, the nominal value must be transferred to a capital redemption reserve. Redeemable preference shares can be redeemed either entirely from a fresh issue, entirely from profits, or partially from both. A company cannot issue preference shares that are irredeemable or redeemable after 20 years.
Shares represent an ownership interest in a company. A share certificate is issued to evidence shares, and is signed by at least two directors and the secretary. Shares can be ordinary shares or preference shares, with preference shares having certain features like priority in dividends. Companies can issue shares at a premium, with premium amounts kept separately and only used for specific purposes like issuing bonus shares. Additional shares must generally be offered first to existing shareholders. Companies may pay dividends to shareholders from profits, and bonus shares can be issued to capitalize profits without shareholders paying additional amounts. Various rules must be followed regarding allotment, minimum subscriptions and deposits for share issuance. Shares can be transferred or transmitted to others according to company articles and
1. Allotment refers to the acceptance of an offer to purchase shares. For allotment to be valid, certain requirements must be met including delivery of a prospectus to regulators, minimum application amounts, and minimum subscription levels being received.
2. Shares must also be listed on the stock exchange(s) mentioned in the prospectus.
3. Companies must complete allotment within 30 days of the subscription closing and obtain stock exchange approval for the basis of allotment. They must also complete trading formalities within 7 days of finalizing the allotment basis.
The document discusses buy-back of shares by a company. It introduces buy-back and outlines the key reasons for companies to buy-back shares such as signaling effect and increasing earnings per share. It also discusses the provisions governing buy-back under the Companies Act, 2013 including conditions, process, restrictions and tax treatment. Finally, it describes various methods of buy-back for both listed and unlisted companies.
SHARES - MEANING , DEFINITION , CHARACTERISTICS AND ITS TYPES.KhushiGoyal20
This document defines shares and discusses their key characteristics and types. Shares represent a portion of a company's total share capital and are divided into parts. Each part is called a share. There are two main types of shares: equity shares and preference shares. Equity shares constitute the major portion of a company's shares and holders have voting rights and rights to profits. Preference shares have preferential rights to dividends and repayment of capital over equity shares. Preference shares can be further classified as cumulative, non-cumulative, convertible, redeemable and participating.
This document summarizes key provisions around the appointment and removal of auditors under Section 139-140 of the Companies Act 2013. It discusses the periods of appointment for individual and audit firm auditors, requirements around rotation of auditors and filling casual vacancies. It also outlines the process for reappointing retiring auditors, circumstances allowing removal of auditors before the end of their term, requirements for auditor resignation, and removal of auditors by the central government.
A buyback, also known as a share repurchase, occurs when a company buys back its own outstanding shares from investors to reduce the number of shares available on the open market. Companies may do this to increase share value for remaining investors by reducing supply, or to prevent other shareholders from gaining control. The document outlines the legal provisions and process for companies in India to conduct a buyback according to the Companies Act and SEBI regulations, including establishing a capital redemption reserve and restrictions on further share issues. It provides examples of companies that have announced buybacks during the COVID-19 pandemic.
The document discusses a demerger, where an existing company splits into two separate companies. Shareholders of the original company receive equivalent stakes in the new companies. Reasons for demerging include allowing each company to focus on its core activities and comply with different regulations. The document then provides further details about Welspun Corp Ltd, an Indian pipe manufacturer, and its planned demerger into Welspun Corp Ltd and Welspun Enterprises Ltd to simplify its business structure and allow each entity to focus on different operations.
Amalgamation refers to the merger of two or more companies into one new company. It involves the transfer of two or more companies' businesses to a newly incorporated company. There are two types of amalgamation - amalgamation in the nature of merger and amalgamation in the nature of purchase. Amalgamation can be accounted for using either the pooling of interests method or the purchase method. Disclosures as per Accounting Standard 14 are required in the financial statements following an amalgamation.
The document discusses capital structure, which refers to the types of securities (debt vs equity) and their proportions that make up a company's total capital. An optimal capital structure minimizes a company's cost of capital. Factors that affect a company's capital structure choice include financial leverage, growth stability, cost of capital, risk tolerance, cash flow ability to service debt, firm size and nature, control and flexibility needs, and capital market conditions.
This document discusses different types of company shares. It defines a share and notes there are two main classes: preference shares and equity shares. Preference shares offer a fixed dividend rate and right to capital repayment before equity shares. Equity shares have voting rights but no fixed dividend. The document outlines various types of preference shares, including cumulative, participating, redeemable, and convertible varieties. It also describes employee shares and compares key characteristics of preference versus equity shares.
The document discusses the roles and responsibilities of company directors under Indian law. It defines a director and outlines their legal position as agents of the company. There are different types of directors such as executive, outside, and independent directors. All directors must obtain a Director Identification Number. Directors can be appointed through various means and removed by shareholders, government, or courts. Their duties include attending meetings, not contracting without board consent, disclosing property transfers, and acting with good faith and without negligence.
The document provides information on prospectuses under Pakistani law. It defines a prospectus as a document that invites the public to subscribe to shares or debentures in a company. It must include key details about the company's business, management, financials, and the offering. The summary also outlines the requirements for prospectus content, types of prospectuses including shelf and red herring prospectuses, parties responsible if misstatements are made, and liabilities that can arise from an inaccurate or misleading prospectus.
Investors Protection-Grievances and their Redressal for B.Com, M.ComDr. Toran Lal Verma
Investors in India face high risks of fraud and unethical practices. To address grievances, measures have been established to protect investors, including grievance cells in stock exchanges, the SEBI, and Company Law Board. Common grievances are against companies for issues like delayed payments or transfers, and against brokers for delayed deliveries or payments. Investors can seek resolution through these organizations, courts, or by reporting issues to the press. The SEBI and stock exchanges work to resolve complaints, including suspending trading or transferring stocks of non-compliant companies. This aims to restore investor confidence in India's financial markets.
This presentation is on Security Exchange Board (SEBI) which gives the brief about the SEBI with its objective, function, details about the chairman, rules
The document discusses various aspects of dividends, including:
1) Types of dividends such as interim, final, special dividends.
2) Sources of dividends including current year's profits, previous years' undistributed profits, and capital profits.
3) Procedures for declaring dividends including recommendation by the board of directors, approval by shareholders, payment within 30 days of declaration.
1) A buyback of shares allows a company to purchase its own shares from shareholders. This provides shareholders a way to sell shares back to the company.
2) Historically, companies could only buyback shares with court approval except for redeeming preferential shares. The 1999 Companies Act amendment introduced provisions allowing simpler buybacks.
3) Reasons for companies to buyback shares include returning surplus cash, increasing share value, supporting temporary weak share prices, maintaining capital structure, and preventing unwanted takeovers. Buybacks are funded from free reserves, securities premium, or share/security proceeds.
Share capital is an essential part of a company. Share capital can be equity or preferential shares and must be subscribed to by one or more persons. After shares are allotted, shareholders only have rights like voting and dividends - they have no claim to the money paid for shares. A way for shareholders to realize the price of shares is to transfer them to another person. The Companies Act allows companies to buy back shares directly from shareholders in a process called buy back of shares. Prior to 1999, companies could only buy back shares with court approval but amendments now allow less complex buybacks. Companies must meet various conditions for buybacks like having authorization, passing a board or shareholder resolution, maintaining solvency, and completing the buy
This document provides an overview of buybacks of shares and securities under various legal frameworks. It begins with definitions of key terms like "buyback" and discusses the history and rationale of buybacks in India. It then compares buyback regulations in the US, UK, and India. The US section outlines the main methods of open market, private, and tender offer repurchases allowed under SEC Rule 10b-18. Benefits of buybacks for companies and shareholders are increasing share price and EPS while returning excess cash. Overall the document provides a comprehensive introduction and comparison of buyback laws and practices.
The document discusses buyback of shares by a company. It defines buyback as a company repurchasing its own shares. The objectives of buyback include increasing promoter holdings, improving earnings per share, and paying surplus cash. Companies can buyback shares through tender offers to shareholders, purchasing on the open market, or through book building. Strict conditions apply, including board and shareholder approvals, maintaining debt-equity ratios, and extinguishing repurchased shares within 7 days. Regulations cover pricing, timelines, disclosure requirements, and prohibitions.
This document defines shares and share capital, and outlines the key types of each. It discusses equity shares, preference shares, authorized share capital, issued share capital, subscribed share capital, called-up share capital, and paid-up share capital. The document also describes the procedures for issuing shares, including prospectus, application, allotment, calls on shares, and transfers/transmissions of shares.
This document discusses buybacks of shares by companies. It begins by providing context on internal restructuring and how section 100-105 of the Companies Act governs capital reduction. It then explains that section 77A, 77B, and 77AA now allow companies to buy back their own shares. The rest of the document defines various terms related to share buybacks and discusses the advantages and mechanics of companies conducting share buybacks.
This document discusses various types of corporate actions and provides details on dividends. It defines corporate actions as events that materially impact a company's shareholders or bondholders. Different types of corporate actions covered include dividends, bonus issues, rights issues, mergers and acquisitions, spin-offs, and buybacks. Dividends are defined as a share of company profits distributed to shareholders. There are three types of dividends: cash dividends, stock dividends, and property dividends. The objectives of dividends are to earn profits for shareholders and distribute some profits while reinvesting others in the business. Accounting treatment requires dividends be declared from profits and reduces profits by the dividend amount.
1. Amalgamation is the combination of two or more companies into a new entity, where the combining companies cease to exist. Absorption and external reconstruction are other forms of business combination where an existing company takes over another company.
2. The objectives of amalgamation include achieving economies of scale, eliminating competition, building goodwill, risk diversification, and improved management effectiveness.
3. The procedure of amalgamation includes finalizing terms by boards, preparing a scheme of amalgamation, obtaining shareholder and regulatory approvals, forming a new company, transferring assets and liabilities, and liquidating transferor companies.
This document outlines the contents of a corporate accounting course. The 5 units cover topics like issue of shares, underwriting and redemption of preference shares, issue of debentures, valuation methods, company final accounts, and amalgamation.
Key points from Unit 1 include definitions of shares and types of shares, the procedure for issuing shares including prospectus, minimum subscription, allotment, and calls. Journal entries are provided for issues of shares at par, premium and discount. Forfeiture and reissue of shares is also covered.
Redemption of preference shares is discussed, noting the provisions under company law. Capital redemption reserve is explained as a reserve created out of profits when preference shares are redeemed from profits
A bonus share is a free share given to existing shareholders without requiring additional payment. It increases the number of shares a shareholder owns but does not change the overall value of their stake. Companies issue bonus shares to capitalize profits and reserves, increasing issued share capital without changing assets. The process involves board and shareholder approval, maintaining sufficient reserves, and filing necessary forms. Key conditions include having authorization in the articles of association and no payment defaults.
1) A buyback of shares refers to a company repurchasing its own outstanding shares from investors in order to reduce the number of shares available on the market.
2) Companies buy back shares to increase the value of remaining shares by reducing supply, or to prevent hostile takeovers by shareholders seeking control.
3) Legal regulations in India require companies to follow procedures such as board resolutions, public announcements, and time periods when conducting a share buyback.
1. Amalgamation is the combination of two or more companies into a new entity, where the combining companies cease to exist. Absorption and external reconstruction are other forms of business combinations where an existing company takes over another company.
2. The objectives of amalgamation include achieving economies of scale, eliminating competition, building goodwill, risk diversification, and improved management effectiveness.
3. The procedure of amalgamation involves finalizing terms, obtaining approvals, issuing shares to transferring shareholders, and liquidating the transferor company.
Fundraising for businesses was an arbitrary practice without any formal guidelines and regulations before Companies Act 2013. Due to lacunae of legal provisions in Companies Act 1956, many a times, corporate with fraudulent mindset have found their way to dupe investors and public of their hard-earned money. It has created many legal disputes and controversies.
Now, new Companies Act and the consequent rules have formally covered all the modes of fund-raising and have tried to fill in the loopholes of old law. Stringent rules and cumbersome compliances are to ensure safeguard of the public money and restrict the malpractices. But these provisions have created confusion in respect of implementation and compliances. The easy availability of funds for businesses in real need has also dried up. MCA must come out some clarification to give breathing time to companies specifically for private companies.
Fund Raising: A Ladder for Corporate GrowthFund raisingPavan Kumar Vijay
This document discusses private placement of securities under the Companies Act, 2013. It defines private placement and outlines the types of securities that can be issued through private placement, including preferential shares, redeemable debentures, and redeemable preference shares. It discusses the regulatory framework, including investor limits, pricing requirements, timelines for allotment, and disclosures. It also highlights additional rules for listed companies and preferential allotments. Finally, it discusses some industry concerns regarding conflicts between the Companies Act and SEBI rules as well as FEMA.
This document discusses methods of funding acquisitions. It outlines various payment methods like issuing equity or preference shares, debt instruments, or cash. Key challenges with share swaps include determining accurate swap ratios and company valuations. Debt instruments are more likely to be accepted with differential pricing or listing. Cash offers are generally preferred by shareholders. Domestic funding sources include internal accruals, IPOs, rights issues, PE funds, bank/FI loans, and ECBs. Cross-border deals have size and structure peculiarities and are subject to RBI regulations and 400% net worth limits. Foreign exchange can be drawn from AD banks or through capitalization, share swaps, ECBs/FCCBs, A
This document discusses various methods that companies can use to raise capital, including issuing different types of shares and financial instruments. It provides details on:
1) Equity shares, which provide ownership rights and the ability to participate in company profits but are high risk. Preference shares provide fixed dividends but no voting rights.
2) Other methods like debentures, bonds, and long-term loans from banks that provide borrowed capital.
3) The process for rights issues of shares, which allows existing shareholders first rights to purchase new shares issued.
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2. BINANI CEMENTBINANI CEMENT
Keynote corporate services Ltd on behalfKeynote corporate services Ltd on behalf
Binani Cement Ltd has issued this PublicBinani Cement Ltd has issued this Public
Announcement to the Equity ShareholderAnnouncement to the Equity Shareholder
owners of the equity shares of target co.owners of the equity shares of target co.
is in compliance with SEBI Regulation ,is in compliance with SEBI Regulation ,
1999 & subsequent amendments thereof.1999 & subsequent amendments thereof.
closure of the offer –August 10,2010.closure of the offer –August 10,2010.
3. HUL BOARD OKAYS SHAREHUL BOARD OKAYS SHARE
BUYBACKBUYBACK
The board of Hindustan Unilever (HUL) hasThe board of Hindustan Unilever (HUL) has
approved the buyback of shares announced lastapproved the buyback of shares announced last
week at a maximum of Rs 280 apiece . Theweek at a maximum of Rs 280 apiece . The
company outgo would not exceed Rs 630 crore.company outgo would not exceed Rs 630 crore.
HUL shares closed at Rs 252.50HUL shares closed at Rs 252.50
on the Bombay Stock Exchange todayon the Bombay Stock Exchange today
.According to HUL consolidated balance sheet.According to HUL consolidated balance sheet
dated March 31 ,cash and bank balances stooddated March 31 ,cash and bank balances stood
at Rs 2102.38 crore ,while networth was at Rsat Rs 2102.38 crore ,while networth was at Rs
2668.93 crore .2668.93 crore .
4. BUY-BACK OF SHARESBUY-BACK OF SHARES
(a) Meaning of buy-back(a) Meaning of buy-back
(b) Advantages of buy-back(b) Advantages of buy-back
(c) disadvantages of buy-back(c) disadvantages of buy-back
(d) sources of buy-back(d) sources of buy-back
(e) conditions which are required in buy-(e) conditions which are required in buy-
backback
(f) Accountings entries(f) Accountings entries
5. Meaning of Buy-BackMeaning of Buy-Back
The companies (Amendment) Act 1999 has introducedThe companies (Amendment) Act 1999 has introduced
Section 77a in the companies Act, 1956 permittingSection 77a in the companies Act, 1956 permitting
companies to buy-back their own shares and othercompanies to buy-back their own shares and other
securities. Prior to the introduction of this Section, thesecurities. Prior to the introduction of this Section, the
buy-back of shares in India was totally prohibited.buy-back of shares in India was totally prohibited.
Buyback of share means repurchase of its own share byBuyback of share means repurchase of its own share by
a company .A company having substantial casha company .A company having substantial cash
resources may like to buy its own share from the marketresources may like to buy its own share from the market
when the prevailing market price of its share is muchwhen the prevailing market price of its share is much
lower than its book value or what the company perceiveslower than its book value or what the company perceives
to be its true value .This is called buy-back of shares.to be its true value .This is called buy-back of shares.
6. Advantages Of Buy-Back OfAdvantages Of Buy-Back Of
SharesShares
Companies having large amount of freeCompanies having large amount of free
reserves are free to use funds to acquire sharesreserves are free to use funds to acquire shares
and other specified securities under the buy-and other specified securities under the buy-
back process.back process.
Buy-back of shares is helpful to a company toBuy-back of shares is helpful to a company to
reduce its share capital which is bloatedreduce its share capital which is bloated
unnecessarily for the time being.unnecessarily for the time being.
Buy-back of shares results in lower capitalBuy-back of shares results in lower capital
base , enhances post-buyback earning perbase , enhances post-buyback earning per
share and appreciates the price-earning ratio .share and appreciates the price-earning ratio .
7. Disadvantages Of Buy-back OfDisadvantages Of Buy-back Of
SharesShares
The buybacks imply under valuation ofThe buybacks imply under valuation of
companies stock .the companies plough backcompanies stock .the companies plough back
some of the outstanding shares thereby creatingsome of the outstanding shares thereby creating
a shortage of shares in the market .a shortage of shares in the market .
Companies go for announcing buyback whenCompanies go for announcing buyback when
they can’t find anything better to do with theirthey can’t find anything better to do with their
cash .cash .
Well timed buyback of share is a clever way forWell timed buyback of share is a clever way for
managers to invest cheaply in a company theymanagers to invest cheaply in a company they
know rather than expensively in a company theyknow rather than expensively in a company they
don’t know .don’t know .
8. SOURCESSOURCES
A Company can purchases its own shares out ofA Company can purchases its own shares out of
its following sources :its following sources :
(a)(a) Free ReservesFree Reserves
(b)(b) Securities Premium AccountSecurities Premium Account
(c)(c) The proceeds of any shares or other specifiedThe proceeds of any shares or other specified
securitiessecurities
provided that no buyback of any kind ofprovided that no buyback of any kind of
shares or other specified securities shall beshares or other specified securities shall be
made out of the proceeds of an earlier issue ofmade out of the proceeds of an earlier issue of
the same kind of shares or same kind of otherthe same kind of shares or same kind of other
sspecified securities .sspecified securities .
9. CONDITIONSCONDITIONS
Shares for buyback must be fully paid upShares for buyback must be fully paid up
Buy-back must be authorized by articles ofBuy-back must be authorized by articles of
association of the companyassociation of the company
Special ResolutionSpecial Resolution
Limit on buyback of sharesLimit on buyback of shares
Debt-Equity RatioDebt-Equity Ratio
To comply with regulation made by SEBITo comply with regulation made by SEBI
Time limit for buybackTime limit for buyback
Declaration of insolvencyDeclaration of insolvency
Restriction on further issue of same kind ofRestriction on further issue of same kind of
sharesshares
10. ACCOUNTING ENTRIESACCOUNTING ENTRIES
1)FOR SALE OF INVESTMENT :1)FOR SALE OF INVESTMENT :
Bank A/c Dr.Bank A/c Dr.
Profit & Loss A/c Dr.Profit & Loss A/c Dr.
To investment A/cTo investment A/c
To capital reserve A/cTo capital reserve A/c
2) FOR ISSUE OF ANY SHARES OR OTHER SPECIFIED2) FOR ISSUE OF ANY SHARES OR OTHER SPECIFIED
SECURITIES :SECURITIES :
Bank A/c Dr.Bank A/c Dr.
To pref. share capital A/cTo pref. share capital A/c
To securities premium A/cTo securities premium A/c
3) FOR CANCELLATION OF SHARES BOUGHT BACK3) FOR CANCELLATION OF SHARES BOUGHT BACK
Equity share capital A/c Dr.Equity share capital A/c Dr.
Free Reserves A/c Dr.Free Reserves A/c Dr.
To Shareholders A/cTo Shareholders A/c
11. Further Accounting entriesFurther Accounting entries
4)FOR MAKING PAYMENTS TO EQUITY SHAREHOLDERS FOR4)FOR MAKING PAYMENTS TO EQUITY SHAREHOLDERS FOR
SHARE BOUGHT BACK:SHARE BOUGHT BACK:
Equity shareholders A/c Dr.Equity shareholders A/c Dr.
To Bank A/cTo Bank A/c
5) FOR TRANSFER OF FREE RESERVES TO CAPITAL5) FOR TRANSFER OF FREE RESERVES TO CAPITAL
REDEMPTION RESERVE A/C TO MEET THE REQUIREMENT OFREDEMPTION RESERVE A/C TO MEET THE REQUIREMENT OF
LAW FOR BUYBACK OF SHARESLAW FOR BUYBACK OF SHARES
Free Reserves A/c Dr.Free Reserves A/c Dr.
To Capital Redemption Reserve A/cTo Capital Redemption Reserve A/c
12. BUYBACK OF SHARES UNDER THEBUYBACK OF SHARES UNDER THE
COMPANIES ACT,1956-AN INSIGHTCOMPANIES ACT,1956-AN INSIGHT
The provision regulating buy back ofThe provision regulating buy back of
shares are contained in Section 77A,shares are contained in Section 77A,
77AA and 77B of the Companies77AA and 77B of the Companies
Act,1956. These were inserted by theAct,1956. These were inserted by the
Companies ( Amendment ) Act ,1999Companies ( Amendment ) Act ,1999
.The Securities.The Securities
and Exchange Board of India (SEBI)and Exchange Board of India (SEBI)
framed the SEBI (Buy Back of Securities).framed the SEBI (Buy Back of Securities).
13. OBJECTIVES OF BUY BACKOBJECTIVES OF BUY BACK
To increase promoters holdingTo increase promoters holding
Increasing earning per shareIncreasing earning per share
Support share valueSupport share value
To thwart takeover bidTo thwart takeover bid
To pay surplus cash not required byTo pay surplus cash not required by
businessbusiness
14. REGISTER OF SECURITIESREGISTER OF SECURITIES
BOUGHT BACKBOUGHT BACK
The consideration paid for the securities ,The consideration paid for the securities ,
The date of cancellation of securities ,The date of cancellation of securities ,
The date of extinguishing & physicallyThe date of extinguishing & physically
destroying of securities &destroying of securities &
Such other particulars as may beSuch other particulars as may be
prescribed .prescribed .
15. ISSUE OF FURTHERISSUE OF FURTHER
SHARES AFTER BUYSHARES AFTER BUY
BACKBACK
Every buy back shall beEvery buy back shall be
completed within twelve monthscompleted within twelve months
from the date of passing thefrom the date of passing the
special resolution or boardspecial resolution or board
resolution as the case may be .resolution as the case may be .
16. BUY BACK OFFER BY MNCSBUY BACK OFFER BY MNCS
In the financial year 2001-2002, twenty MNCs madeIn the financial year 2001-2002, twenty MNCs made
buyback offers .Some of the well-known MNCS whichbuyback offers .Some of the well-known MNCS which
offered to buy back their shares were Philips Indiaoffered to buy back their shares were Philips India
Limited (Philips), Cadbury India Limited (Cadbury)Limited (Philips), Cadbury India Limited (Cadbury)
,Britannia Industries Ltd (Britannia) ,Carrier Aircon,Britannia Industries Ltd (Britannia) ,Carrier Aircon
(Carrier) and otis Elevators (otis) . All these companies(Carrier) and otis Elevators (otis) . All these companies
made open offers for the non-promoters shareholding inmade open offers for the non-promoters shareholding in
their Indian subsidiaries . To buy back shares ,Cadburytheir Indian subsidiaries . To buy back shares ,Cadbury
paid Rs 9 billon, philips Rs 2 billion ,and carrier , otis andpaid Rs 9 billon, philips Rs 2 billion ,and carrier , otis and
Reckitt Benkiser all paid over Rs 1 billion .Reckitt Benkiser all paid over Rs 1 billion .