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Per Section 68(1) of the Companies Act 2013, buy-back of shares may be made out of:
AFree reserves, Securities Premium, or proceeds of any shares or other specified securities
BSecurities Premium Account only
CRevaluation Reserve only
DCapital Reserve
Answer & Solution
Correct answer: A. Free reserves, Securities Premium, or proceeds of any shares or other specified securities
1. Step 1: Sec 68(1) specifies three permitted sources for buy-back.
2. Step 2: They are: (i) free reserves; (ii) securities premium account; (iii) proceeds of any shares/specified securities.
3. Step 3: Revaluation reserve cannot be used. Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 12 "Buy-Back of Securities"_