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Redemption of preference capital

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(Querist)
23 April 2023 A company's balance sheet

ESC 100 BANK 400
PSC 50
P&L (300)
G/R 50
LOAN 500

Can the company redeem it's preference share by using general reserve and kindly tell me , is it bad for creditor and members.
Kindly explain it . No one gave me
Answer .
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Manish

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Manish (Expert)
25 April 2023 GR minus debit balance of P&L = -250. Not sufficient to create CRR.
The company cannot redeem pref. shares out of reserves here. It needs to issue fresh shares.
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Jatin Bajaj

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Jatin Bajaj (Expert)
02 May 2023 The Company can redeem the prefernce shares by proceeds of fresh issue and out of the profit of the Company
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