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use of Capital Redemption Reserve

Gargi Ranade (CS) (619 Points)

14 February 2009

Hi Dear all,

Please tell me what is the use of the Capital Redemption Reserve cretaed after redemption of Reddemable Preference shares ?

Where I can use the Amount so set aside ?

Thanks And Regards,

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6 Replies

laxman suthar (Asst. Manager Taxtation ) (329 Points)
Replied 14 February 2009

Originally posted by :Gargi
"	for bonus issue	"

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Ashish M (Chartered Accountant) (2731 Points)
Replied 14 February 2009

As per Sec.80(5) of the Companies act.

"the capital redemption reserve may be applied by the company in paying up unissued shares of hte company to be issued to the members of hte company as fully paid bonus shares."

CA Gandharv Sharma (Financial and Taxation consultant) (514 Points)
Replied 15 February 2009

only for bonus issue of share..... nothing else.

Gargi Ranade (CS) (619 Points)
Replied 16 February 2009

Originally posted by :Gargi
"	Hi Dear all, Please tell me what is the use of the Capital Redemption Reserve cretaed after redemption of Reddemable Preference shares ? Where I can use the Amount so set aside ? Thanks And Regards,	"

Gargi Ranade (CS) (619 Points)
Replied 16 February 2009

Originally posted by :Gargi
"	Hi Dear all, Please tell me what is the use of the Capital Redemption Reserve cretaed after redemption of Reddemable Preference shares ? Where I can use the Amount so set aside ? Thanks And Regards,	"

Thanks for reply all of you but one of the book which I usually refer states that it can also be utilised for redemption of preference share capltal in that case ,does that means at the time of next redemption Ineed not require to create another CRR or if Iutilising it on one hand and creating another CRR for next issue what is the use of the provision, what should be the entry in this regard.