Question

State the purposes for utilisation of security premium reserve

Answer 1

(a) Issuing fully paid bonus shares to the members.

(b) Writing off preliminary expenses.

(c) Writing off the expenses of or the commission paid or discount allowed on any issue of shares or debentures of the company.

(d) Providing for the premium payable on the redemption of preference shares or debentures of the company.

(e) In purchasing its own shares i.e. Buy Back u/s 77 A