MEANING OF BUYBACK OF SHARES1. The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.2. Acorporation'srepurchaseof stock orbondsit has issued. In the case ofstocks, thisreducesthenumberofshares outstanding, giving each remaining shareholder a larger percentageownershipof the company. This is usually considered a sign that thecompany'smanagementisoptimisticabout thefutureand believes that the currentshare priceis undervalued. Reasons for buybacksincludeputting unusedcashto use, raisingearnings per share, increasinginternalcontrol of the company, and obtaining stock foremployeestock option plansorpension plans. When a company'sshareholdersvotetoauthorizea buyback, they aren't obliged to actuallyundertakethe buyback.Also calledcorporate repurchase.3. Theactofapubliclytradedcompanybuyingitsownstock,sometimesatapricewellabovefairmarketvalue.Buybackisnotintendedtostoptradeonitsstock.Rather,itisanattempteithertoreducethesupplyofsharesinthemarket(withthehopeofdrivinguptheshareprice)ortopreventarealorsuspectedhostiletakeover.Ifacompanybecomesitsownmajorityorpluralityshareholder,iteithermakesahostiletakeoverimpossibleormoreexpensivefortheacquiringcompany.Abuybackmayoccurallatonceorgraduallyovertime.

4. A stock buyback, also known as a "share repurchase", is a company's buying back its shares from the marketplace. You can think of a buyback as a company investing in itselfor using its cash to buy its own shares. The idea is simple: because a company cant act as its own shareholder, repurchased shares are absorbed by the company, and the numberofoutstandingshares onthemarketisreduced.Whenthishappens,therelative ownership stake of each investor increases because there are fewer shares, or claims, on the earnings of the company

MOTIVE BEHIND SHARE BUYBACK IN INDIA The Indian corporates shared a proposal with the Government for allowing share buybacks and the Government accepted the idea, the question arises in our mind is about the motives behind such a move. The motives and the objectives to be achieved through share buyback are of direct interest to shareholders. Really speaking, the share buyback system should be judged both from the angle of shareholders and that of the national economy. The first and foremost reason behind buyback of shares cannot be ascertained and fixed for every company due to their various situations. But few of the main motives found for share buyback are clearly as follow:-1. Tax efficient way to return investor's money:Healthy companies make profits and they must find an efficient way to give the profits to the shareholders if they don't have a good way to use them. There are two main ways to return the money. a) Dividends. b) Buy back shares. Many companies try to keep dividends at a constant rate so as to not hit their shareholders with an unexpected tax event. When you get a dividend you have to pay a tax for that in that year.

2. Signal to the market that the board thinks the company is strong.When a company is buying back shares, it sends a message to the market. Since the company board knows the best about the company, the markets often think that the company is getting healthier and puts lesser pressure on the board from activist investors.

3. Compensate for stock options & bonuses.Companies give out stocks to their employees in the form of options & grants. This increases the number of outstanding shares. Many companies want to keep their outstanding shares stable. So, they compensate from the issue of new shares by buying back some of the old shares from public.

4. Push up the stock price.The stock repurchase reduces the float (number of stocks held by the public) thereby causing a scarcity of the company's shares in the market. The company could then use a favorable market condition to reissue these stocks to public and make a gain (these gains will not be reflected in the profits, as a trading gain on one's own shares is not allowed to be reported in income statement).

5. Support the price.When a company is pummeled by the market, key institutional shareholders would press the company to "support a price". This is because the poor performance of the company would reflect bad on the institutions (portfolio managers, pension funds) when they send out their periodic statements to their investors.

6. A buy back improves many of the financial metrics: ROE (Retrun on Equity) and EPS (Earnings per Share). Both of these core metrics have denominator as number of shares and by reducing number of shares, you increase them.

ADVANTAGES AND DISADVANTAGES OF BUY BACK OF SHARESADVANTAGES 1. Increase confidence in management: It might enhance the confidence of its investors on the companys board of directors, as these investors know that the directors are ever willing to return surplus cash if its not able to earn above the companys alternative investment or cost of capital.

2. Enhancesshareholdersvalue:Generally,sharebuybacksaregoodforshareholders. The laws of supply and demand would suggest that with fewersharesonthemarket,thesharepricewouldtendtorise.Althoughthe company will see a fall in profits because it will no longer receive interest on the cash, this is more than made up for by the reduction in the number.

3. Reduce takeoverchances: Buying back stock uses up excess cash. There turns on excess cash in money market accounts can drag down overall company performance. Cash rich companies are also very attractive takeovertargets. Buying back stock allows the company to earn a better return on excess cash and keep itself from becoming a takeover target.4. Increase ROE: Buying back stock can increase the return on equity (ROE).This effect is greater the more undervalued the shares are when they are repurchased. If shares are undervalued, this may be the most profitable course of action for the company.

5. PsychologicalEffect:Whenacompanypurchasesitsownstockitis essentiallytelling themarketthattheythinkthatthecompanys stockis undervalued. This can have a psychological effect on the market.6. Buying back stock allows a company to pass on extra cash to shareholders without raising the dividend. If the cash is temporary in nature it may prove more beneficial to pass on value to shareholders through buybacks rather than raising the dividend.

7. Stock buybacks also raise the demand for thestock on theopen market. Thispoint is rather self explanatory as the company is competing against otherinvestors to purchase shares of its own stock.DISADVANTAGE1. Sending Negative Signals: A buyback announcement can send a negative signal in these situations. A typical example is the HP case: From November 1998 throughOctober 2000,the computer giant Hewlett-Packard spent $8.2billiontobuy back 128 million ofits shares. The aimwas to make opportunistic purchases of HP stock at attractive pricesin other words, at prices they felt undervalued the company. Instead of signaling a good operating prospects to the market, thebuyback signal was completely drowned out more powerful contradictory signals about the companys future which are an aborted acquisition, a protracted business restructuring, slipping financial results, and a decay in the general profitability of key markets. By last January, HPs shares were trading at around half the average $64 per paid share to repurchase the stock.

2. Backfire: Buybacks can also backfire for a company competing in a high-growth industry because they may be read as an admission that the company has few important new opportunities on which to otherwise spend its money. In such cases, long-term investors will respond to a buyback announcement by selling the companys shares

3. The share buyback scheme might become a big disadvantage to the company when it pays too much for its own shares. Indeed, it is foolish to buy in an overpriced market. Instead, the company shouldput the money into assets that canbe easily converted back into cash. This way, when the market swings the otherway and is trading below its true value, shares of the company can be bought backat a discount, ensuring current shareholders receive maximum benefit. Strictly, a company should repurchase its shares only when its stock is trading below its expected value and when no better investment opportunities are available.

RELATIONSHIP BETWEEN BUYBACK OF SHARES AND MERGERS & ACQUISITIONS There are several reasons for buying back shares.For some, a buyback programme is seen as a useful way of returning cash to investors without making the permanent commitment implied by an increased dividend. Companies that enjoy high free cash flow are able to enhance their growth in earnings per share by buying back their shares when capital growth might otherwise be difficult or expensive for them to achieve.It can also be used as a way of indicating that companies consider their shares to be undervalued. In practice, though, it is not at all certain that the amount of money a company puts into the market through a buyback is equal to the increase in value that shareholders enjoy.At the least, the expected share price gain can take months or even longer to materialise, and can never be disentangled from other market-moving factors. But in the past, some investors have been critical of share buybacks, claiming they are unimaginative.Others do not want to receive their returns in the form of a higher share price, which can be reaped only on the sale of shares. That is when M&A comes in as the alternative.Using spare cash on an acquisition is one of the quickest ways for a company to increase its top-line growth. BHP Billitons $39bn all-cash bid for PotashCorp of Canada had divided analysts over whether it is a good use of money for the Anglo-Australian miner.Analysts at Nomura, however, reckon that a buyback, rather than the acquisition of Potash, could provide 11 times greater returns for shareholders in 2011. Nomura estimates that the Anglo-Australians miners current bid of $130 a share would add 2 per cent to BHPs EPS in 2011, while a buyback of equal value would add 22 per cent.To achieve the same EPS accretion to the proposed bid, the Japanese bank said BHP would need to carry out a share buyback scheme of roughly $6bn.BHP has publicly said it will remain disciplined in its pursuit of Potash but then, management teams always say that, usually right before they increase their offer.That is what Irene Rosenfeld, chief executive of Kraft, did when she acquired Cadbury, the UK confectionery company. Ms Rosenfelds acquisition may prove to come good. But when it comes to deciding how to deploy spare cash, it is clear there is no perfect solution that makes all investors happy.Meanwhile, those companies that choose M&A over a share buyback can be sure their shareholders will want to ensure they are not spending their cash on yet another deal that will prove value destroying when the next downturn comes.Share repurchases avoid the accumulation of excessive amounts of cash in the corporation. Companies with strong cash generation and limited needs for capital spending will accumulate cash on the balance sheet, which makes the company a more attractive target for takeover, since the cash can be used to pay down the debt incurred to carry out the acquisition. Anti-takeover strategies, therefore, often include maintaining a lean cash position and share repurchases bolster the stock price, making a takeover more expensive.METHODS OF BUYBACK OF SHARES UNDER SEBIA company must not buy back its shares from any person through negotiated deals whether on or off the stock exchange or through spot transactions or through any private arrangement. Thus, no listed company can buy back its equity shares from its shareholders in any manner other than those permitted. According to Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 (SEBI Regulations), a listed company may buy back its shares by methods:1. from the existing shareholders on a proportionate basis through tender offer;

2. from open market through ; (a) book-building process; or (b) Stock Exchange;

3. from odd-lot holders.

Open Market Purchase : In an open market purchase, a company can buy its shares directly from the stock market through brokers. Open market purchases are resorted to when the number of shares to be bought back is relatively small. The company has to fix the maximum price for an open market offer; stipulate the number of shares it intends to purchase, and announce the closing date of Buy Back of Shares Comprehensive Analysis Articles the offer. A company intending to buyback its equity shares in accordance with this method has to comply with the provisions of Section 77A as well as Regulations 14 to 18 contained under Chapter IV of SEBI Regulations. Tender Offer: A tender offer is made when the number of shares to be bought back is large. Such an offer is a fixed price offer, i.e., the company fixes a particular price for the maximum number of shares it is willing to purchase and sends a letter of offer to all the non-promoter shareholders. It also fixes an outer time limit for accepting the offer. The offer price is usually fixed at a premium in order to encourage shareholders to surrender their shares. The company accepts the shares on a proportionate basis if the offer is over subscribed. The Company is allowed to buyback its shares on a proportionate basis in accordance with the provisions of Chapter III of the SEBI Regulations (Regulation 6). But if offer is under-subscribed, the company may either accept whatever is tendered or extend the time limit. Regulations 8, 9, 10, 11, 12 of the SEBI Regulations govern the buy back of shares by tender offer. Buy-back of odd lot shares: The term odd lot is not defined anywhere. It means that those shares of a listed company, which are not in marketable lot fixed by the stock exchange (that is less or more than market lot). The provisions pertaining to buy-back through tender offer as specified above are applicable mutatis mutandis (with the necessary changes) to odd lot shares. It should be noted that shares of all the companies are presently traded at the stock exchanges in compulsory dematerialized form only and in case of demat shares, the market lot for all the companies is only one share. Hence this mode of buy back has become more or less redundant in the present scenario.LEGAL PROVISIONS OF BUYBACK In India, section 77 of the Companies Act prohibits a company from buying or cancelling its own shares, unless it complied with the provisions and followed the procedure in accordance for reduction of share capital under section 100 to 104 of the Companies Act, where court confirmation is required in addition to adhering SEBI procedures 1998 which have been amended from time to time. These practices are regulated through several laws and regulation with a view to prevent unscrupulous efforts and disastrous outlets arising there from. Theseareprevalentinothercountriesinvariedforms.BuybackofSharesbycompaniesinIndiaisregulated by Section 77A, 77AA, and 77B of the Companies Act, 1956. These sectionswereincorporatedbytheCompanies(Amendment)Act,1999whichwasenactedafterthepromulgationof the ordinance by the Government regarding the sanctity of share buyback by companies. Section 77A is an exception to the prohibition under Section 77 and under Section100. Apart from these Act, the share buyback practices by the listed companies are regulated the SEBI (buyback of securities) Regulations, originally framed in 1998 and thereafter amended from time to time. However, in the case of unlisted public and private limited companies, the rules of the Central Government known as private limited company and unlisted public limited company (buyback of securities) Rules, 1999 are applicable Section 77(1)of the Companies Act provides that a company limited by share or a company limited by guarantee having a share capital cannot buy its own share, as it involves permanent reduction of capital without sanction of court. However, the Companies (Amendment) Act 1999 has introduced three new sections, viz.,Section 77A,77AAandsection 77Bwhere under companies have been permitted to buy-back their share or other securities subject to certain conditions. Besides, SEBI has issued certain guidelines regulating these buy-backs. The provisions relating to buy-back as per the Amendment Act including SEBI guidelines in this regard are as follows: Section 77A,inserted by the (Amendment) Act ,1999, allows[subject to provision of Section 77B(2)] a company to buy its own share out of it free reserves; orii the security premium account; oriii.the proceeds of any share or other specified securities. However, no buy-back of any kind of share or other specified securities shall be made out of the proceeds of an earlier issue of the same kind of share or same kind of other specified securities. In case share are bought back out of free reserves, then a sum equal to the nominal value of shares bought back shall be transferred to a reserve account to be called the Capital Redemption Reserve Account(Sec.77AA). The details of such transfer shall be disclosed in the balance sheet. SEBI guidelines stipulate that this account shall be disclosed in the balance sheet. SEBI guidelines stipulate that this account shall be allowed to be used for issue of fully paid bonus share. The Securities and Exchange Board of India [SEBI] has issued SEBI (Buy back of Securities) Amendment Regulations, 2013 [hereinafter referred to as "New Regulations"] vide notification dated 8th August, 2013amending the existing SEBI (Buy back of Securities) Regulations, 1998 [hereinafter referred to as "Regulations"/ "Old/Earlier Regulations"]. Also, recently the Companies Bill, 2013 [hereinafter referred to as "Companies Bill"] has been passed by the parliament. Section 68 of the new Act, deals with the issue of buy-back. The corresponding provision in the old Act is Section 77A Considering the above New Regulations, Regulations and the Companies Bill an analysis has been done discussing the various provisions. The changes have been discussed point wise as follows:KEY CHANGES/TRANSFORMATION1. Ceiling prescribed for buy back from open market:Regulation 4 of the Regulations state that a company may buy-back its shares or other specified securities from the existing security-holders on a proportionate basis through tender offer or from the open market offer. The existing regulations do not prescribes any cap on the amount on buy back of securities. However, with the issue of new regulations, a provision has been added to Regulation 4 which provides that buy-back offer from the open market shall not be made for 15% or more of the paid up capital and free reserves of the company. In this regard, clause 68 of the Companies Bill, recently approved by Rajya Sabha provides that the buy-back of securities shall be limited to 25% of total paid-up capital and free reserves. Provided that in case of buy-back of equity shares it is 25% of total paidup equity capital in a financial year.

2. Lock in period on further buy-back :The existing regulations do not provide for any lock in period between two buy back offers. However, the new regulations has issued a sub-regulation 4 after sub-regulation 3 of Regulation 4 which provides that no offer of buy-back shall be made by any company within a period of one year from the date of closure of the preceding offer of buy back. The Companies Bill in this regards also provides that no offer of buy-back shall be made within a period of one year from the date of closure of preceding offer of buy-back.

3. Minimum Buy Back limit:The newly introduced sub regulation 3 of Regulation 14 of the new regulations provides that atleast 50% of the amount set aside for buy-back shall be utilized for buying back shares or other specified securities. There was no such limit prescribed in the existing regulations. Further, the Companies Bill is also silent with respect to such limit.

4. Public Announcement (PA):Regulation 15(d) of the said regulations provided that the PA shall be made at least 7 days prior to the commencement of buy back. However, the new regulations has modified the said regulation and provides that the PA shall be made within 7 working days from the date of passing the resolution authorizing buy-back. It is to be noted that there is no such condition relating to the same has been provided in the Companies Bill.

5. Filing of copy of PA with SEBI:The regulations provided that copy of PA shall be filed with SEBI within 2 days of making such announcement. The same has now been modified and the companies shall now be required to ensure that copy of PA shall be filed with SEBI simultaneous with the issue of public announcement.

6. Submission of information pertaining to buy-back :Regulation 15(i) in the regulations provided that the company shall submit the information pertaining to buy-back on daily basis to Stock Exchange and publish the same in a national daily on a fortnightly basis. However, as per the amended regulation (i) of Regulation 15, the company shall be required to submit the information regarding the shares or securities bought back to stock exchange on daily basis in specified form and the stock exchange shall upload the same on its website. Further, newly inserted sub regulation (ia) of Regulation 15 provides that the company shall upload the information regarding the shares or other securities bought-back on its website on a daily basis.

7. Period of buy back offer:The newly inserted sub regulation (k) of Regulation 15 provides that the buy-back offer shall open not later than seven working days from the date of public announcement and shall close within six months. No such condition was prescribed under the existing regulations. However, the Companies Bill provides that the buy-back shall be required to be completed within a period of 1 year from the date of passing of resolution authorizing buyback.

8. Buying back physical shares/ specified securities:Regulation 15A has been inserted in the new regulation which deals with buy-back of physical shares or other specified securities. Following are some of the key points:

a separate window shall be created by the stock exchange, which shall remain open during the buy-back period, for buyback of shares or other specified securities in physical form. Before proceeding with buy-back, verification of the identity proof and address proof needs to undertaken by the broker. the price at which the shares will be bought back shall be the volume weighted average price of the shares or other specified securities bought-back, other than in the physical form, during the calendar week in which such shares or other specified securities were received by the brokerNo such conditions were prescribed in the earlier regulations. Neither there is any provision relating to same in the Companies Bill.0. Escrow Account :New Regulation 15B has been inserted which provides that before opening of the buy-back offer, the company shall create an escrow account towards security and shall deposit 25 % of the amount earmarked for the buy-back in such escrow account. No such condition was/is there either in the regulations or Companies Bill.

1. Extinguishment of Certificates :The newly inserted sub regulation 3 of Regulation 16 provides that the company shall be required to extinguish and physically destroy the security certificates so bought back during the month in the presence of a Merchant Banker and the Statutory Auditor, on or before 15th day of the succeeding month. Further, the company shall ensure that all the securities bought-back are extinguished within seven days of the last date of completion of buyback. Earlier there was no such provision under the regulations. The Companies Bill however, provides that the certificates shall be extinguished within 7 days of the last date of completion of buy-back.

2. Restriction on dealing in Shares or specified securities:Regulation 19(1)(e) has been modified so as to specifically mention the period during which the promoters or the person shall be restricted to deal in shares or specified securities. As per the said regulation, the promoter or the person shall not be allowed to deal in the shares or other specified securities of the company in the stock exchange during the period or off- market, including inter-se transfer of shares among the promoters during the period from the date of passing the resolution relating to buyback. As per the earlier regulations, such restriction was for during the period when buy back offer is open. No such condition as prescribed in the Companies Bill.

3. Raising of further capital :As per the newly inserted Regulation 19(1)(f ), the company shall not raise further capital for a period of 1 year from the closure of buy-back offer, except in discharge of its subsisting obligations. However, as per the Companies Bill, a period of 6 months has be prescribed for the purpose of raising further capital except by way of bonus issue or in discharge of its subsisting obligation.

4. Requirements during Buy back:SEBI now requires all the information related to shares bought back to be disclosed on a daily basis on the website of the company and the stock exchange on cumulative basis. Before the amendment, the aforementioned disclosure had to be made on a daily, fortnightly and monthly basis.To tackle and reduce the unpredictability in the market, SEBI now prevents the promoters of the company from executing any transaction, during the buy-back period, regardless of whether these transactions are on-market or off-market.

5. Buy Back Method:In order to increase stability in share prices of a company, SEBI has restricted the Buy Back method only to Tender offer method. SEBI permits the company to buy 15% or more of capital which may include both paid-up capital as well as free reserves. This amendment takes away the freedom of company to choose the method for buy back.

6. Procedure for Buy back:Procedure for buy-back of physical shares (odd-lot) has been modified which includes creation of separate window in the trading system for tendering the shares, requirement of PAN/Aadhaar card for verification, etc.

The amendments made to the existing legal framework of Buy Back Regulations have been done considering the overall interests of the various stakeholders. Furthermore the modifications to the existing framework for Buy Back through open market purchase have been done by holding the shareholder's interest as the paramount consideration. Now the companies cannot misuse the Buy Back for promotion of their own interest.CONDITION FOR BUYBACK(a) The buy-back is authorised by the Articles of association of the Company; (b) A special resolution has been passed in the general meeting of the company authorising the buy-back. In the case of a listed company, this approval is required by means of a postal ballot. Also, the shares for buy back should be free from lock in period/non transferability.The buy back can be made by a Board resolution If the quantity of buyback is or less than ten percent of the paid up capital and free reserves;(c) The buy-back is of less than fifty per cent of the total paid-up capital and fee reserves of the company and that the buy-back of equity shares in any financial year shall not exceed fifty per cent of its total paid-up equity capital in that financial year;(d) The ratio of the debt owed by the company is not more than twice the capital and its free reserves after such buy-back;(e) There has been no default in any of the following i. in repayment of deposit or interest payable thereon, ii. redemption of debentures, or preference shares or iii. payment of dividend, if declared, to all shareholders within the stipulated time of 30 days from the date of declaration of dividend or iv. repayment of any term loan or interest payable thereon to any financial institution or bank; (f) There has been no default in complying with the provisions of filing of Annual Return, Payment of Dividend, and form and contents of Annual Accounts; (g) All the shares or other specified securities for buy-back are fully paid-up;(h) The buy-back of the shares or other specified securities listed on any recognised stock exchange shall be in accordance with the regulations made by the Securities and Exchange Board of India in this behalf; and (i) The buy-back in respect of shares or other specified securities of private and closely held companies is in accordance with the guidelines as may be prescribedOTHER CONDITIONa) The company which has been authorized by a special resolution shall, before the buy-back of shares, file with the Registrar of Companies a letter of offer in Form No. SH.8, along with the fee. b) Provided that such letter of offer shall be dated and signed on behalf of the Board of directors of the company by not less than two directors of the company, one of whom shall be the managing director, where there is one.c) The letter of offer shall be dispatched to the shareholders or security holders immediately after filing the same with the Registrar of Companies but not later than twenty days from its filing with the Registrar of Companies.d) The offer for buy-back shall remain open for a period of not less than fifteen days and not exceeding thirty days from the date of dispatch of the letter of offer.e) In case the number of shares or other specified securities offered by the shareholders or security holders is more than the total number of shares or securities to be bought back by the company, the acceptance per shareholder shall be on proportionate basis out of the total shares offered for being bought back.f) The company shall complete the verifications of the offers received within fifteen days from the date of closure of the offer and the shares or other securities lodged shall be deemed to be accepted unless a communication of rejection is made within twenty one days from the date of closure of the offer. g) The company shall immediately after the date of closure of the offer, open a separate bank account and deposit therein, such sum, as would make up the entire sum due and payable as consideration for the shares tendered for buy-back in terms of these rules.h) The company shall within seven days of the time specified in sub-rule (7)- i. make payment of consideration in cash to those shareholders or security holders whose securities have been accepted; or ii. return the share certificates to the shareholders or security holders whose securities have not been accepted at all or the balance of securities in case of part acceptanceCONCLUSION AND SUGGESTIONBuybacks arent without value. It is crucial, however, for managers and directors to understand their real effects when deciding to return cash to shareholders or to pursue other investment options. A buybacks impact on share price comes from changes in a companys capital structure and, more critically, from the signals a buyback sends. Investors are generally relieved to learn that companies dont intend to do something wasteful such as make an unwise acquisition or a poor capital expenditure with the excess cash. In 2004 companies announced plans to repurchase $230 billion in stock which is more than double the volume of the previous yearIn general, markets have applauded such moves, making buybacks an alluring substitute improvements in operational performance are elusive. Yet while the increase in earnings per share that many buybacks deliver help managers hit EPS-based compensation targets, boosting EPS in this way doesnt signify an increase in underlying performance or value. Moreover, a companys fixation on buybacks might come at the cost of investments in its long-term health.The Regulations have been made more beneficial for the shareholders more so, for the physical shareholders by providing a separate window and easing the process of tendering the shares in the buyback offer.For example, Dells announcement that it would increase its buyback program by an additional $10 billion didnt slow the decline of its share price, which had begun to slide because of worries about operating results.IMPLICATIONS AND SOLUTIONSThe regulatory requirements in regard to open market offers in India are rather lax. The company is required to announce a maximum price which has no meaning from the shareholders viewpoints. The international best practice is that both the maximum price and the minimum share buyback price should be announced. It may be suggested that the disclosure of actual buybacks under any buyback programme be made a part of the companys quarterly reports, as in the U.S. If no buyback under an announced programme have been made, the quarterly report should say so. A new rule implemented by the SEC in the U.S. in March 2004 requires companies to make quarterly disclosures of: (i) the total number of shares purchased during the past quarter; (ii) the average price paid per share; (iii) the total number of shares purchased as part of a publicly announced plan or programme; and (iv) the maximum number (or approximate value) of shares that may yet be purchased under the plan or programme. In many other countries details of actual buyback transactions have to be reported to either the stock exchanges or other supervisory/regulatory authorities. For instance, in the UK, Australia, Netherlands, Japan and Hong Kong, actual buyback reports have to be filed immediately or within one day on a continuous basis buyback period. In Canada, France and Italy, reports on actual buybacks have to be submitted on a monthly basis.Corporate governance requires proper and effective utilization of shareholders funds with a view to accomplish the objectives of the shareholders/stakeholders and obviously the company as a whole.SEBImade importantmodificationswiththeobjectiveofprotectingthe investors, preventing the insider trading and speculative activities in the stock exchanges, to conduct the merchant banking activities in an organized manner and to streamline theBuyback regulationsand operationsof thestock exchanges. The regime of actual buybacks should in the quarterly reports of companies which in turn can bring the much needed transparency in the case of open market buyback offers in IndiaNot the last but Buyback has to be viewed as financial restructuring, through which a company strengthens its financial position and attempts to create value for the shareholdersby means of ensuring effective and efficient use of funds of the company.BIBLIOGRAPHYBOOKS REFERRED 1. Buyback of Shares in India, By Tanupa Chakraborty

2. A. Ramaya

ARTICLES AND NEWSPAPER REFERRED 1. Article by sagar on Buy-Back of Securities (Unlisted Public Co. and Private Co.) as per Companies Act, 20132. Article by shipra makkar devgun on Modifications To The Existing Framework For Buy Back Through Open Market Purchase

3. Article by Megha Kapoor on Analysis of SEBI (Buy Back Of Securities) Amendment Regulations, 2013 In Relation To The Existing Regulations And The Companies Bill, 20134. Economic Times dated 24.2.2015, Business Standard dated 24.2.2015ACTS REFERRED1. The Companies Act, 1956 (Act 1 of 1956)

2. The Companies Act, 2013 (Act 18 of 2013)

3. SEBI (Buy-back of Securities) Regulation, 1999

4. SEBI (Buy-back of Securities) Amendment Regulations, 2013

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