Suppose amount equivalent to nominal value of bought back shares transferred to CRR account is 'x' and maximum permitted buy-back of equity is y. Then Equation 1 :(Present equity - Nominal value of buy-back transfer to CRR) - Minimum equity to be maintained= Maximum permissible buy-back of equity (750-x)-600 = y (1) Since 150 - x = y Equation 2 Maximum buy-back - No minal Value Offer price for buy-back = Nominal value of the shares bought-back to be transferred to CRR 034 (x10) = = X There (30 = 25% x 120] Or 3x = y (2) by solving the above two equations we get x= 37.5 crores y = 112.5 crores Illustration 5 Anu Ltd. (a non-listed company) furnishes you with the following summarized balance sheet as at 31 March 2012 (in crores) Sources of Funds Share Capital Authorised 100 Issued: 12% Redeemable preference shares of 100 each fully paid 75 Equity shares of 10 each fully paid 100 Reserves and surplus: Capital reserve 15 Securities premium 25 Revenue reserves 260 300 400 100 (100) Application of Funds Fixed assets: cost Less: Provision for depreciation Non-current investments at cost (Market value 2400 Cr.) Current assets Less Current liabilities (Trade payables) Nil 100 340 (40) 300 400 The company redeemed preference shares on 1st April, 2012 It also bought back 50 lakhs equity shares of 10 each at 750 per share. The payments for the above were made out of the huge bank balances, which appeared as a part of current assets. You are asked to