New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Which among the following can be utilized for Buy Back

    of shares of an organisation?
    A Revaluation Reserve Correct Answer Incorrect Answer
    B Securities Premium Reserve Correct Answer Incorrect Answer
    C CRR Correct Answer Incorrect Answer
    D Debenture Redemption Reserve Correct Answer Incorrect Answer
    E Share Forfeiture Account Correct Answer Incorrect Answer

    Solution

    company may purchase its own shares or other specified securities out of: o   Its Free Reserves o   The Securities Premium Account, or o   The proceeds of any shares or any other securities §  No buy back shall be made out of the proceeds of an earlier issue of the same kind of shares or other specified securities Reserves which are not available as sources of Buy Back o   Revaluation Reserve o   CRR o   Debenture Redemption Reserve o   Share Forfeiture Account o   Capital Reserves   Note – ·         a company cannot withdraw buy-back offer, once made ·         Company cannot use borrowed funds from bank to make buyback

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