Balance Sheet of XYZ Ltd. as on March 31, 2024 is as follows: Liabilities Amount (₹) Assets Amount (₹) Paid up capital 1,20,000 equity shares of ₹ 10 each 12,00,000 Fixed Assets 36,00,000 Free reserves 18,00,000 Stock 10

The amount of buyback of shares will be the least of the following two amounts: Paid up capital before buyback ₹12,00,000 Free reserves ₹18,00,000 Total paid up capital & free reserves ₹30,00,000 (1) 25% of free reserves & paid-up capital = 25% of ₹30,00,000 = ₹7,50,000 (2) Amount of equity available after satisfying minimum post buyback debt/equity ratio is ₹18,00,000 Post buyback debt/equity ratio is calculated as follows: Debt/equity ratio = debt (after buyback) / equity (after buyback) Given debt/equity ratio = 2 Debt = Debentures + Creditors = ₹25,00,000 + ₹11,00,000 = ₹36,00,000 So, 2 = ₹36,00,000 / equity Equity required after buyback = ₹36,00,000 / 2 = ₹18,00,000 Equity before buyback = Paid up capital + Free reserves + Securities premium = ₹12,00,000 + ₹18,00,000 + ₹6,00,000 = ₹36,00,000 Amount of equity available for buyback = equity before buyback - equity required after buyback. = ₹(36,00,000 - 18,00,000) = ₹18,00,000 Amount of buyback permissible is the least of (1) ₹7,50,000 and (2) ₹18,00,000. Therefore, permissible buyback amount = ₹7,50,000 Buyback price per share = Face value + Premium = ₹10 + ₹40 = ₹50 Number of shares to be bought back = Permissible buyback amount / Buyback price per share = ₹7,50,000 / ₹50 = 15,000 shares