The paid-up capital of Cool Ltd. as on 31st March, 2014 is ₹10 crore and its free reserves as on the same date was ₹10 crore. Cool Ltd. proposes to buy-back its shares for a value upto 15% of its paid-up capital. State w

Under the Companies Act, 2013, the Board of Directors can approve buy-back of shares up to 10% of the total paid-up equity capital and free reserves of the company. Such buy-back must be authorized by the Board by means of a resolution passed at a meeting. In the given case: Paid-up capital = ₹10 crore Free reserves = ₹10 crore Total paid-up capital and free reserves = ₹10 crore + ₹10 crore = ₹20 crore The maximum buy-back limit that the Board can approve is 10% of the total paid-up equity capital and free reserves. 10% of ₹20 crore = ₹2 crore. Cool Ltd. proposes to buy-back its shares for a value up to 15% of its paid-up capital. 15% of ₹10 crore (paid-up capital) = ₹1.5 crore. Since ₹1.5 crore is less than the maximum limit of ₹2 crore that the Board can approve (10% of paid-up capital + free reserves), the Board of Cool Ltd. can approve the buy-back of shares up to 15% of its paid-up capital.