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                  BRILLIANT’S    Long Term Financing and Valuation of Goodwill & Shares             167


                     Acknowledges the debt of a stated sum of   H§$nZr Ûmam {H$gr ì`pŠV go cr JB© F$U H$s YZam{e
                      money owned by a company to the person      H$s ñdrH¥${V hmoŸ&
                      named therein.
                     Promises periodic payment at a stipulated   g{Q>©{’$Ho$Q> _| Zm{_V ì`pŠV H$mo ã`mO H$s V` Xa na
                      rate of interest to the person named in the  g_`-g_` na ^wJVmZ H$aZo H$m dMZŸ&
                      certificate.
                     States the period of time after which the   Cg g_`md{Y H$m CëcoI {OgHo$ ~mX H§$nZr Ûmam
                      amount borrowed will be  repaid by the      bmoZ na cr JB© YZam{e H$m ^wJVmZ hmoJmŸ&
                      company; and
                     Gives the precise details of the security, if   g{Q>©{’$Ho$Q> _| Zm{_V ì`pŠV H$mo `{X H$moB© à{V^y{V Xr
                      any, which is given to the person named     JB© hmo Vmo CgH$m CëcoIŸ&
                      in the certificate.
                      The  amount  of  loans  raised  from  a     {S>~oÝMg© Ho$ {H$gr {ZpíMV Bí`y Ho$ {cE bmoZ H$s
                  particular issue of debentures is divided into  _mÌm H$mo g_mZ _yë` H$s `y{ZQ²>g _| {d^m{OV {H$`m
                  units of similar value. A debenture certificate  OmVm h¡Ÿ& H§$nZr Ûmam bmoZ Ho$ à_mUñdê$n {S>~|Ma
                  is issued by the company to acknowledge its
                  debt. Debenture-holders  are creditors  of the  g{Q>©{\$Ho$Q> Omar {H$`m OmVm h¡Ÿ& {S>~|Ma hmoëS>g©, H§$nZr
                  company.                                    Ho$ F$UXmVm h¡&
                  Features of Debentures                      F$U nÌm| H$s {deofVmE±
                      Debenture is financial security for earning  {S>~|Ma, {ZpíMV Am` àmßV H$aZo H$s \$m`ZopÝe`c
                  fixed  income.  The  par  value  of  debenture  {gŠ`y[aQ>r h¡Ÿ& {S>~|Ma H$m V` _yë`, {S>~|Ma Ho$ àcoI
                  appears  on  the  certificate  of  debenture.  na A§{H$V hmoVm h¡Ÿ& gm_mÝ`V… {S>~|Mg© H$m _yë` ` 100
                  Normally the value of the debentures is ` 100.
                  A few  large  public  sector companies  issue  hmoVm h¡Ÿ& Hw$N> ~‹S>r gmd©O{ZH  joÌ H$s H§$n{Z`m± ` 1,000
                  debentures of ` 1,000. Some of the important  Ho$ {S>~|Mg© Omar H$aVr h¢Ÿ& {S>~|Mg© H$s Hw$N> _hÎdnyU©
                  features of debentures are as under:        {deofVmE± h¢…
                      1. Fixed rate of interest: The rate of interest  1. ã`mO H$s {ZpíMV Xa… {S>~|Ma na ã`mO H$s Xa
                  on  debenture  is  fixed  and  known.  It is  not  {ZpíMV Ed§ kmV hmoVr h¡Ÿ& `h {S>~|Ma H$s _mH}$Q> d¡ë`y go
                  affected by the market value of the debenture.  à^m{dV Zht hmoVr h¡Ÿ& ã`mO Ho$ ^wJVmZ Ho$ {cE H§$nZr H$mZyZr
                  Payment   of interest  is legally  binding on  a
                  company whether it is earning profit or not.  ê$n go ~mÜ` h¡ Mmho dh cm^ H$_m ahr hmo AWdm ZhtŸ&
                      2. Maturity: Debentures are issued for a    2. _¡À`mo[aQ>r… {S>~|Mg© {ZpíMV g_`md{Y Ho$ {cE
                  specific  period  of  time.  The                        Omar {H$E OmVo h¢Ÿ& {S>~|Ma H$s _¡À`mo[aQ>r
                  maturity of a debenture indicates    Features of
                                                      Debentures          dh g_`md{Y h¡ {Og na H§$nZr, {S>~|Ma
                  the  length  of  time  until  the
                  company  redeems (returns)  the  1. Fixed rate of interest  hmoëS>a  H$mo V` _yë` na YZam{e H$m
                  par  value  to  debenture-holder  2. Maturity           nwZ^w©JVmZ H$aVr h¡ Am¡a {S>~|Ma H$m ApñVËd
                  and terminates the debentures. In  3. Security          IË_  H$a  XoVr  h¡Ÿ&  ^maV  _|  {S>~|Ma
                  India,  a  debenture  is  typically  4. Redemption
                  redeemed after  7 to  10  years  in  5. Claim  on  assets  and  gm_mÝ`V… 7-10 dfm] _| {H$íVm| _| MwH$mE
                  installments.                     income                OmVo h¢Ÿ&
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