Minimum number of Shares to be issued for Redemption

Conditions

• Fresh issue is to be made either at premium or at discount.
• When the amount of fresh issue is not given
• When the premium on fresh issue plus the existing premium already given is not sufficient to cover fully the premium on redemption of preference shares.

(A) When fresh issue is to be made at Premium:

[Redeemable Preference Share Capital + Premium on Redemption] = [Available Securities Premium] + [Revenue Profits available] + [N] + [N x % Rate of Premium on Fresh issue]

N = means face value of fresh issue of shares for Redemption of Preference shares.

(B) When fresh issue of shares is to be made at a discount:

[Redeemable Preference Share Capital + Premium on Redemption] = [Available Securities Premium] + [Revenue Profits available] + [N] – [N x % Rate of discount on Fresh issue]