CS Executive · Capital Market and Securities Laws · Issue of Capital and Disclosure Requirements
Meera Textiles Ltd issues 1,00,000 shares of Rs 10 each at Rs 25 per share, all received in cash. Under Section 52 of the Companies Act, 2013, what amount must be transferred to the securities premium account?
Rs 15,00,000 must be transferred to the securities premium account. Premium per share is Rs 25 less Rs 10 face value, equal to Rs 15, and on 1,00,000 shares this gives Rs 15,00,000, as Section 52(1) requires the aggregate premium received to be transferred.
- ARs 15,00,000Correct
- BRs 25,00,000
- CRs 10,00,000
- DRs 1,50,000
Explanation
Premium per share = 25 - 10 = Rs 15. For 1,00,000 shares, premium = Rs 15,00,000, which Section 52(1) requires to be transferred to securities premium account. Rs 25,00,000 wrongly takes the whole issue price, and Rs 10,00,000 is the face value only.
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