Question : Securities Premium Reserve can be utilised for the purposes of
Option 1: Writing off preliminary expenses
Option 2: Writing off expenses such as share issue expenses, commission, discount allowed on issue of Securities
Option 3: Providing for the premium payable on redemption of debentures or Preference Shares
Option 4: All of the Above
Correct Answer: All of the Above
Solution : Securities Premium Reserve can be utilised for the purposes prescribed in Section 52(2) of the Companies Act, 2013, which are:
(i) writing off preliminary expenses
(ii) writing off expenses such as share issue expenses, commission, discount allowed on issue of Securities,
(iii) providing for the premium payable on redemption of debentures or Preference Shares,
(iv) in buying-back its own shares, or
(v) issuing fully paid bonus shares.
Hence, the correct answer is option 4.
