MNP Tech Ltd., a fast-growing start-up in Bangalore, recently issued equity shares at a premium of 200 per share, raising a Securities Premium…

(a) As per Section 52 (2) of the Companies Act, 2013, the securities premium account may be applied by the company: (a) towards the issue of unissued shares of the company to the members of the company as fully paid bonus shares. (b) in writing off the preliminary expenses of the company. (c) in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company. (d) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company; or (e) for the purchase of its own shares or other securities under section 68 (Buy-back). In view of the provisions of the Act and facts of the question: (1) Securities Premium Account cannot be utilized to write off advertisement expenses as they are not in the nature of preliminary expenses of the company. (2) Securities Premium Account can be utilized to issue fully paid bonus shares worth 2crore to the existing shareholders. (3) Securities Premium Account can be utilized to provide - 1.5 crore for the premium payable on redemption of preference shares. (4) Securities Premium Account cannot be utilized to distribute 1crore as interim dividend (in case of inadequate profits).