Solitaire Ltd. has a huge balance in securities premium account. It has utilised the amount for issue of bonus shares to its existing members, written-off preliminary expenses, paid commission and discount on issue of sh

According to section 52 of the Companies Act, 2013 securities premium may be utilised for followings; Towards the issue of unissued shares of the company to the members of the company as fully paid bonus shares; In writing off the preliminary expenses of the company; In writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; In providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company; or For the purchase of its own shares or other securities under section 68 of the Companies Act, 2013. According to Section 55 of the Companies Act, 2013, preference shares can be redeemed only out of the profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of such redemption. Hence, no company can utilise amount available in securities premium account for redemption of preference shares. Thus, Solitaire Ltd. has rightly utilised the securities premium amount for all specified purposes except for the purpose of redemption of preference shares out of securities premium amount.