back of Securities) Rules 1999.

(vii) The operation of buy-back must be completed within 12 months from the date of special resolution in this regard.

(vi i i) The securitiesshares bought shonld be phY5ically destroyed without seven days from the completion of buy-back process [Sec. 77 A

(7»).4. Buy-hack from Whom. A company can buy-back its own securities

shares for the following

(i) from existing shareholders on a proportionate b

(i i) from open market,

(iii) from odd lots i.e. the holding of shares which is listed on a recognised stock exchange’ and which is less than a marketable lot. e.g. .

(iv) From employees to whom sharessecurities have been issued under the Employees Stock Option plan or ‘sweat equity’.

A private company or a public unlisted company can buy-back securities! shares from (0) existing shareholders ona proportionate basis through private

offers, and (h) purchasing securities issued to employees of the company pursuant to a scheme stock-option sweat equity.

5. No Re-issue ifter Buy-back [Sec. 77A (8)]. After completion of buy-back. the company cannot i:;;sue the same kind of sharessecurities within 24

mClJ1ths fr0111 the date of completion of buy-back. Allotment of rights issue renounced by members is also not pennissible within this period. However.

the following arc permitted-(a) bonus issue. (b) discharge of subsisting obligation such as conversion of warrants, (c)stock option scheme, (d) sweat

equity, (e) conversion of preference shares or debentures into equity shares. () issue of securities of other class i.e” other than one which was bought