Forward Troopers Ltd. is engaged in the manufacturing of wearable protective gear and accessories including helmets and shields for supply to the armed forces in the country. Following are the extracts of the audited fin

CS Executive · Company Law and Practice · PYQS · June 2026
Forward Troopers Ltd. is engaged in the manufacturing of wearable protective gear and accessories including helmets and shields for supply to the armed forces in the country. Following are the extracts of the audited financial statement of the company as on 31st March, 2026: Liabilities Amount (in ₹) Equity shares of ₹ 10 each fully paid 20,00,000 Reserves & surplus 7,00,000 Foreign exchange fluctuation reserve 1,00,000 Profit & loss account 3,00,000 8% debenture (issued to twenty five persons) 25,00,000 Unsecured loan (from a related party) 15,00,000 The company is considering buy-back of its shares without using any proceeds of shares or other securities. Ascertain the maximum quantum of buy-back of shares with shareholders' approval as on 1st April, 2026.

Answer & Explanation:

The maximum quantum of buy- back that company in question can make as on 1st April, 2026, in pursuance of section 68 of Companies Act, 2013 is 25% of aggregate of paid-up capital and free reserves of the company. Further provided that the reference to twenty-five per cent shall be construed with respect to its total paid-up equity capital in that financial year and the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back should not be more than twice the paid-up capital and its free reserves.

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