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What is the maximum amount of debentures which an unlisted company, other than a NBFC and HFC, can redeem out of its capital? - Accounts

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Answer in Brief

What is the maximum amount of debentures which an unlisted company, other than a NBFC and HFC, can redeem out of its capital?

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Solution

Unlisted companies are required to create Debentures Redemption Reserve equal to at least 10% of the nominal (face) value of outstanding debentures out of divisible profit. Hence, they can redeem 90% of their debentures out of capital.

Concept: Creation of Debenture Redemption Reserve
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