Cancellation of shares is not a reduction of share capital
With regard to cancellation of shares, Section 62(2) states that a cancellation of shares shall not be deemed to be a reduction of share capital within the meaning of the Act.
Reduction of share capital is subject to Section 64 which carries different meaning as compared to cancellation of share capital. You will learn more detail about reduction of share capital in BCS 301/05 Corporate Law. However, a brief introduction on procedures to reduce share capital is provided in this unit.