Repayment Terms explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Debt is listed longest-dated first — and for an instalment issue, "maturity" means the date the first instalment falls due, not the last.
Bonds and debentures
They are stated along with the rate of interest and particulars of redemption or conversion, in descending order of maturity or conversion, starting from the farthest redemption or conversion date.
Where bonds or debentures are redeemable by instalments, the date of maturity for this purpose must be reckoned as the date on which the first instalment becomes due.
That is counter-intuitive against a descending-order presentation. An issue repayable in instalments from 2027 to 2035 is positioned by its 2027 date, so it appears later in the list than a bullet issue maturing in 2030 — even though its final repayment is five years further out.
The logic is that the first instalment is when the obligation starts converting into cash outflow. For a reader assessing near-term repayment pressure, the date money first has to be found is the relevant one; the descending order then arranges the schedule from the furthest such starting point back to the most imminent.
The same descending-order convention appears in the clause (j) disclosure of convertible security terms, where the earliest date of conversion is listed in descending order from the farthest — the same principle applied to conversion rather than redemption.
Redeemed debentures capable of reissue
Particulars of any redeemed bonds or debentures which the company has power to reissue shall be disclosed.
These carry no balance — they have been redeemed — but the power to reissue is a live entitlement that could bring the debt back onto the balance sheet without a fresh issue process. Disclosing the particulars tells a reader what capacity exists.
Terms of repayment of term loans and other loans
Terms of repayment of term loans and other loans is required to be stated. The term "other loans" is used in a general sense and should be interpreted to mean all categories listed under the heading Non-current borrowings — so deposits, deferred payment liabilities and loans from related parties are all within it.
Disclosure of repayment terms should be made preferably for each loan, unless the repayment terms of individual loans within a category are similar, in which case they may be aggregated.
What the repayment terms must contain
- the period of maturity with respect to the balance sheet date;
- the number and amount of instalments due;
- the applicable rate of interest; and
- other significant relevant terms, if any.
Note that maturity is expressed relative to the balance sheet date rather than as an absolute date — which makes the disclosure directly usable for assessing the repayment profile without the reader having to do the arithmetic.
Loans from related parties
Loans from related parties are required to be disclosed, and all the disclosure requirements of non-current borrowings would be applicable to such loans — security, guarantees, repayment terms and defaults alike. Being a related party does not attract a reduced disclosure.
Common mistakes
- Ordering debt from nearest to furthest maturity.
- Positioning an instalment-repayable issue by its final repayment date.
- Aggregating repayment terms across loans with dissimilar terms.
- Omitting redeemed debentures the company retains power to reissue.