1. Buy Back of Shares or Other Specified Securities

2.  Private Companies  Unlisted Public Companies

3.  out of— a) Free reserves b) Securities Premium Account or a) Proceeds of issue of any shares  No buy-back - out of proceeds of an earlier issue of same kind of shares “Free Reserves” includes Securities Premium Account.

4.  Buy-back is authorized by its articles  Board Resolution – If 10% or less of total paid-up equity capital and free reserves  Special Resolution - More than 10% of total paid-up equity capital and free reserves **Paid-up equity capital of that FY in which buy back is made and not in totality

5.  Existing shareholders/security holders on a proportionate basis;  Open market;  By purchasing securities issued to employees pursuant to scheme of stock option or sweat equity.

6.  Maximum Buy-back - 25% or less of aggregate of paid-up capital and free reserves **If buy-back of equity shares - 25% of total paid-up equity capital

7.  Ratio of secured and unsecured debts after buy-back - not more than twice paid-up capital and its free reserves  All shares are fully paid-up Subsequent offer of buy back – after 1 year from date of closure of preceding offer of buy-back

8.  Hold BM and Pass resolution if less than 10%  Hold GM and Pass Special Resolution if more than 10%  File Form No. MGT – 14  File with ROC a declaration of solvency with an affidavit – Form SH-9

9.  File letter of offer with ROC Form No. SH.8  Dispatch Letter of offer to shareholders/security holders within 20 days from filing with ROC.  Offer remain open for 15 to 30 days from date of dispatch of letter of offer.  Immediately after closure of offer - open a separate bank account and deposit such sum, as would make up entire sum due and payable as consideration for shares tendered

10.  complete verifications of offers received within 15 days from date of closure of offer  shares lodged shall be deemed to be accepted unless a communication of rejection is made within 21 days from date of closure of offer.  within 7 days after end of 21 days - Make payment and Return share certificates

11.  Extinguish & physically destroy shares so bought back within 7 days  Make entries in Register of Buy Back - Form No. SH.10  File return of buy-back within 30 days of completion - Form No. SH.11 along with a certificate in Form No. SH.15

12.  After BM obtain Report addressed to BOD by company’s auditors – To be annexed with Notice stating that- a) They have inquired into company’s state of affairs; b) Amount of permissible capital payment for securities in question is in their view properly determined; c) Audited accounts on the basis of which calculation with reference to buy back is done is not more than 6 months old from date of offer document; and d) BOD have formed opinion as specified in clause 17(1)(m) of Rules and company shall not be rendered insolvent within a period of 1 year from that date

13.  Transfer sum equal to nominal value of shares so purchased and details of such transfer disclose in Balance Sheet.  CRRA may applied, in paying up unissued shares to be issued as fully paid bonus shares.  Company shall not utilize any money borrowed from banks/FI for buying back its shares

14.  Through any subsidiary including its own subsidiary companies  Through any investment /group of investment companies or  if a default, is made in repayment of deposits accepted & interest payment thereon, redemption of debentures/preference shares/payment of dividend /repayment of any term loan/interest payable thereon to any FI or banking company  NA above – if default is remedied and 3 years has lapsed after such default ceased to subsist.

15.  No company shall, directly/indirectly, purchase its own shares if not complied with : a) Section 92 - Annual Return b) Section 23 - Declaration of dividend c) Section 127 - Punishment for failure to distribute dividends and d) Section 129 - Financial Statement

16.  No further issue of same kind of shares including allotment of new shares u/s 62(1) (a) - for 6 months of completion-u/s 62(1) (a) - Except bonus issue/in discharge of subsisting obligations such as conversion  Not issue new shares/bonus shares from passing resolution till date of closure of offer- - Except those arising out of any outstanding convertible instruments;

17.  Accompanied by an explanatory statement u/s. 102 stating-  a full and complete disclosure of all material facts;  the necessity for the buy-back;

18.  the class of shares or securities intended to be purchased under the buy-back;  the amount to be invested under the buy- back; and  the time-limit for completion of buy-back.

19.  within a period of 1 year from date of passing of special resolution/passed by Board

20.  If a company makes default - punishable with fine Rs.1,00,000/- to Rs. 3,00,000/-  Every officer who is in default - punishable with imprisonment for term up to 3 years or fine Rs. 1,00,000/- to Rs. 3,00,000/-  or with both.

21.  Form No. MGT – 14- Special Resolution  Form No. SH- 9- declaration of solvency  Form No. SH- 8- Letter of Offer  Form No. SH- 10 Format of Buy Back Register  Form No. SH- 11- Return of Buy Back