Question

Gabby Ltd. (a listed NBFC) has 30,000, 5% Debentures of ₹ 100 each due for redemption at par on 31st March, 2022.
The Debenture Redemption Investment which was purchased on 30th April, 2021, was realized on the date of redemption at 102% less 0.5% brokerage, and the debentures were redeemed.
You are required to calculate the sale price of the Debenture Redemption Investment.

Answer 1

Debentures = 30,000 of ₹ 100 each → Total redemption amount = ₹ 30,00,000

The company is a listed NBFC, which means no DRR or DRI is required.

However, if DRI was made on 30th April, 2021, it would have been 15% of face value:

DRI = 15% of ₹ 30,00,000 = ₹ 4,50,000

Realization of Investment:

Sold at 102% less 0.5% brokerage

Gross sale price = ₹ 4,50,000 × 102%

= ₹ 4,59,000

Brokerage = 0.5% of ₹ 4,59,000

= ₹ 2,295

Net sale proceeds = ₹ 4,59,000 − ₹ 2,295 

= ₹ 4,56,705