Shares

The Company issue preference shares in addition to the equity shares in order to fully meet the capital requirement.

Preference shares are those which have preferential right to the payment of dividend during the life-time of the company and a preferential right to the return of capital when the company is wound up.

is an equity security with properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preferreds are senior (i.e. higher ranking) to common stock, but subordinate tobonds in terms of claim (or rights to their share of the assets of the company)

Features

Preferred stock is a special class of shares which may have any combination of features not possessed by common stock. The following features are usually associated with preferred stock:[4]

▪ Preference in dividends

▪ Preference in assets, in the event of liquidation

▪ Convertibility to common stock.

▪ Callability, at the option of the corporation

▪ Nonvoting

In general, preferreds have preference to dividends payments. A preference does not assure the payment of dividends, but the company must pay the stated dividend rate before paying dividends on common stock.[4]

Preferred stock may be cumulative or noncumulative. A cumulative preferred requires that if a company fails to pay a dividend (or any amount) below the stated rate, it must make up for it at a later time. Dividends accumulate with each passed dividend period (which may be quarterly, semi-annually or annually). When a dividend is not paid in time, it has "passed"; all passed dividends on a cumulative stock make up a dividend in arrears. A stock without this feature is known as a noncumulative, or straight,[5] preferred stock; any dividends passed are lost if not declared.[6]

[edit]Other features or rights

▪ Preferred stock may or may not have a fixed liquidation value (or par value) associated with it. This represents the amount of capital which was contributed...