DEBASHIS DHAR (HEAD-MARKETING) 15 March 2010

Redeemable Preference Shares

Dear sirs,

I wish to buy redeemable preference shares of a company named "Imax Projects India Limited" registered under ROC,Kolkata. They are a part of the "Shreeram Group" which has group turnover of RS.1200 crore. The company is selling shares with a face value of RS.10/share a minimum of 800 shares have to be procured. They are guranting return of double the investment amount in 6 years. for investments of Rs.25000/- and above they are guranting return of double the investment amount in 5 years.

IS IT RELIABLE TO INVEST IN PREFERENCE SHARES? WHAT HAPPENS IF THE COMPANY GOES TO LIQUADATION WITHIN 5/6 YEARS?

Debashis

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4 Replies

Suresh CSLLM (Service) 16 March 2010

In case Issue of preference shares under the Companies Act 1956, there is no question of guarantee for return. the rate of dividend and redemption amount, terms everthing have to be approved by the Board and should be metnioned over share certificate.

you may check the board resolution, application form etc.

DEBASHIS DHAR (HEAD-MARKETING) 30 March 2010

Dear Mr.Suresh,

Thanks for reply. The preference share certificates have distinctive share numbers, and payout value. Suppose if I buy 800 shares @ Rs.10/share, i.e., Rs. 8000/- invested, the share certificate mentions Rs.16,000/- as redemption value and redemption date (6 years from the date of investment). Is it now safe to invest.

With best regards.,

Debashis Dhar

CA Adarsh Agrawal (CMD of SHAYVIDZ Group) 30 March 2010

Originally posted by :DEBASHIS DHAR
"	Dear Mr.Suresh, Thanks for reply. The preference share certificates have distinctive share numbers, and payout value. Suppose if I buy 800 shares @ Rs.10/share, i.e., Rs. 8000/- invested, the share certificate mentions Rs.16,000/- as redemption value and redemption date (6 years from the date of investment). Is it now safe to invest. With best regards., Debashis Dhar	"

It is still not safe in case of liquidation of company (before 6 years from the date of investment).

because the payment to preference share holders & equity share holders is made at last.

so do check before invetment whether is there any plan for closure of that company in near future.

P M SARMA (PARTNER) 11 February 2011

hello friends , i got an offer to invest in a redeemable preference share from a company from kolkota,the company is very new in the name called cemendia marketing ltd they are offering double ther capital at 56 month ,is it wise to invest there some one from kolkota and others pls let me know at the earliest

with regrds

p m sarma