Buy-back solvency tests require standalone and consolidated statements and limit open-market purchases, subject to regulated-subsidiary exclusions. Amendments require buy-back eligibility tests and thresholds to be determined on both standalone and consolidated financial statements. The substituted debt-capital provision mandates that aggregate secured and unsecured debts to paid-up capital and free reserves after buy-back be 2:1 on both bases, subject to higher Companies Act limits, or alternatively be 2:1 after excluding NBFC/HFC subsidiaries regulated by RBI/NHB provided those excluded subsidiaries have a standalone debt-to-capital-and-free-reserves ratio not more than 1[6:1]. Open-market buy-back is limited to less than fifteen per cent on both bases.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Buy-back solvency tests require standalone and consolidated statements and limit open-market purchases, subject to regulated-subsidiary exclusions.
Amendments require buy-back eligibility tests and thresholds to be determined on both standalone and consolidated financial statements. The substituted debt-capital provision mandates that aggregate secured and unsecured debts to paid-up capital and free reserves after buy-back be 2:1 on both bases, subject to higher Companies Act limits, or alternatively be 2:1 after excluding NBFC/HFC subsidiaries regulated by RBI/NHB provided those excluded subsidiaries have a standalone debt-to-capital-and-free-reserves ratio not more than 1[6:1]. Open-market buy-back is limited to less than fifteen per cent on both bases.
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