N, has recently been elevated from the post of Vice-President (Operations) to Director in a listed company named Green Tech India Limited. In his first board meeting, he wanted to know from their Company Secretary about

Bonds are the debt security where an issuer is bound to pay a specific rate of interest agreed as per the terms of payment and repay principal amount at a later time. The bond holders are generally like a creditor where a company is obliged to pay the amount. The amount is paid on the maturity of the bond period. Generally these bonds duration would be for 5 to 10 years. In Indian Capital market there are four types of bonds are prevailing, namely: (i) Government Bonds: These are the bonds issued either directly by the Government of India or by the Public Sector Undertakings (PSU's). These bonds are secured as they are backed up with security from Government. These are generally offered with low rate of interest compared to other types of bonds. (ii) Corporate Bonds: These are the bonds issued by the private corporate companies. Indian corporates issue secured or non-secured bonds. However, care to be taken to consider the credit rating given by Credit Rating Agencies before investing in these bonds. (iii) Bank and other financial institutions bonds: These bonds are issued by banks or any financial institutions. The financial market is well regulated and the majority of the bond markets are from this segment. (iv) Tax Saving Bonds: In India, the tax saving bonds are issued by the Government of India for providing benefits to investors in the form of tax savings. Along with getting normal interest, the bond holder would also get tax benefits. In India, all these bonds are listed in National Stock Exchange and Bombay Stock Exchange, hence they can be easily liquidated and sold in the open market.