Apirock Limited is a public company that has been performing well financially and has accumulated a substantial amount of cash reserves. The…

(a) (i) As per the provision of section 68 (1) of the Companies Act, 2013, subject to the provisions of sub-section (2) , a company may purchase its own shares or other specified securities (hereinafter referred to as buy-back) out of: (a) its free reserves; (b) the securities premium account; or (c) the proceeds of the issue of any shares or other specified securities: As per the provision of section 68 (2) , no company shall purchase its own shares or other specified securities under sub-section (1) , unless: (a) the buy-back is authorised by its articles; (b) a special resolution has been passed at a general meeting of the company authorising the buy-back: Provided that nothing contained in this clause shall apply to a case where: (i) the buy-back is ten per cent or less of the total paid-up equity capital and free reserves of the company; (ii) such buy-back has been authorised by the Board by means of a resolution passed at its meeting; Analysing the above provisions we can conclude that Apirock Limited can buy-back 10% of its shares under the given circumstances since it is well within the stipulated limit of 10% of its the total paid-up equity capital and free reserves, which has been authorised by the Board by means of a resolution passed at its meeting and here passing of a special resolution is not required in terms of the proviso to section 68 (2) . (ii) As per the provision of section 68 (2) (c) of the Companies Act, 2013, no company shall purchase its own shares or other specified securities under sub-section (1) , unless the buy-back is twenty-five per cent or less of the aggregate of paid-up capital and free reserves of the company. Provided that in respect of the buy-back of equity shares in any financial year, the reference to twenty-five per cent in this clause shall be construed with respect to its total paid-up equity capital in that financial year. In terms of the above provisions, the maximum eligible amount allowed to be used by Apirock Limited for buy-back of shares is: 25% of ₹ (50+100) crore = 37.5 crore subject to passing of a special resolution. Note for (ii) - Assumption 1. - Only ordinary resolution has been passed. In this case, authorisation by a resolution passed at a meeting of the Board of Directors authorising the same is sufficient when the buyback amounts are up to 10% of the total paid-up equity capital and free reserves of the company, then the answer will be 10% of paid-up equity share capital and free reserves i.e., 10% of ₹ (50+100) crore i.e.15 crore. Assumption 2- A special resolution has been passed. In this case, the maximum amount of buyback shall be 25% of the paid-up equity share and free reserves, i.e., 25% of ₹ (50+100) crore i.e.37.5 crore. Assumption 3- When the buy-back is of only equity shares. If all the shares in the question are assumed to be equity shares, the maximum amount of buyback shall be 25% of the paid-up equity share, i.e., 25% of 50crore i.e.12.5 crore in that financial year.