Out of profit

Premimum on redemption of preference is paid out of Securities Premium a/c, but in case of balance is insuficient it can be paid out of profit.

As per section 117 C a debenture redemption reserve is to be created for redemption of debenture which is compulsory.

So there is no distribution pattern, but premium should be given only out of the profit available after transfer to debenture redemtion reserve.