Whether the company has adequate amount of cash surplus available with it?

The company cannot go for buy-back of shares as there shall be a huge cash outflow

Whether the surplus available is for long term and not just for the short term?

The company is advised not to go for buy-back of shares as the cash surplus will not be available in the long run and hence the company might find itself in financial crunch

Whether such surplus cash flow is more than the normal requirement for the business?

The company is advised not to go for buy-back of shares as the cash surplus will get exhausted in meeting the normal business needs only

Would the company like to dispose off the surplus cash temporarily deposited in non-trade investment?

Whether the opportunity for buying of new business exits?

The company should go for buying the new business rather than buy-back of securities

Whether such surplus cash available can be used for expansion of business which is synergy with core competence of the existing business?

Whether the company is of the opinion that its shares are quoted well below its intrinsic value/ very conservatively calculated?

The company need not choose buying back its shares

If used for expansion of other businesses, whether it will get the same kind of return on capital as it is getting from the present business or even more than that?

Whether buyback will lead to increase in Earnings per share and Return on Capital Employed?

It would not be advisable to go for buy-back.

The company is advised not to go for buy-back of shares since it has the better option available with it. However, if the company wants to reduce its share capital only, it has the option to decide between whether to use the surplus cash in buying back of shares, reduction of capital or expansion of business


Conditions are not satisfied for buy back of securities Thank you for using our checklist on buy-back of securities Click on restart button if you wish to restart checklist again OR Click on close the window button if you wish to discontinue Checklist.

Is the company opting to return the surplus cash to the shareholders in order to improve their returns?

It would not be advisable to go for buy-back.

Whether the company is not overpaying the departing shareholders at the cost of continuing shareholders?

The intention of the company is not suitable to the existing shareholders and hence buy-back of securities may have negative effect.

Whether the buy-back of share is authorised by the Articles of Association of the company?

As all the conditions and requirements for buy-back of securities are satisfied hence the company should go ahead with the buy-back procedure

Whether the company is providing all the information to the shareholders that they need for estimating that value?

Whether the buyback is done to support or increase share price?

This should not be the intention of the company to opt for buy-back of securities

Alter the Articles to validate buy-back of shares by passing special resolution

The company should provide with all the information and then go ahead with buy-back procedure

Pass the special resolution and get it approved

Buy-back is not suggested

Since the company cannot issue the same kind of shares within a period of 24 months except by way of bonus issue or in discharge of subsisting obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of preference or debentures into equity, hence it should consider the above implication

It cannot be more than 25 %

Whether the company has passed a special resolution and shareholders have approved it?

Will the debt-equity ratio remain below 2:1 even after the buyback of shares is done?

Whether the company has intention of issuing the same kind of shares which it intends to buy-back in the coming 24 months?

Whether the total amount of buy-back of securities is less than 25% of the total paid up capital and free reserves (Free reserves means those reserves which, as per the latest audited Balance Sheet of the company are free for distribution as dividend and shall include balance to the credit of the securities premium account but shall not include share application money) ?

It cannot be more than 25% , review

The securities have to be made fully paid up first

Whether the buyback is 25% or less of its paid up equity share capital in any financial year?

Whether the shares or the specified securities for buy-back are fully paid up

All preliminary requirement of Buy-Back has been complied, Your should go for further Procedure.