# Notes to Accounts: Presenting Share Capital and Reserves After Buy Back
After a buyback (and/or preference share redemption), every movement in share capital and reserves must be shown in the Notes to Financial Statements. Treat each note as a running ledger narrative: Opening → Additions → Deductions → Closing.
## Note 1: Share Capital
```
Equity Share Capital:
Opening Balance ₹ xxx
Add: Shares issued under ESOP ₹ xxx
Less: Buy Back during the year (₹ xxx)
Closing Balance ₹ xxx
Preference Share Capital:
Opening Balance ₹ xxx
Less: Redemption during the year (₹ xxx)
Closing Balance ₹ xxx / Nil
```
## Note 2: Reserves & Surplus
| Reserve | Typical Additions | Typical Deductions |
|---|---|---|
| Capital Reserve | Profit on cancellation of debentures; profit on forfeiture | (none in a buyback year) |
| Revenue Reserve (General Reserve) | — | Premium on BB (shortfall after Sec Prem); Transfer to CRR |
| Securities Premium | Premium on ESOP; premium on debenture/share issue | Premium on pref redemption (first); then premium on BB |
| P&L | Profit on investment sale | BB expenses; shortfall for CRR / premium on BB |
| Capital Redemption Reserve | Transfer from Revenue Reserve / P&L | (only debited later for bonus issue) |
## Order of Using Securities Premium
When a question involves both preference redemption and equity buyback, Securities Premium is consumed in this sequence:
1. Premium on preference share redemption (first priority)
2. Premium on buy back of equity shares (with remaining balance)
Only the residual Securities Premium after step 1 is available for step 2.
## CRR Always Grows in a Buyback Year
CRR is only credited (created) during the buyback year — it is never debited except when used for a bonus issue. Its closing balance equals the sum of transfers for preference redemption and equity buyback.