Question : Which of the following statements is correct in respect of,amount is not set aside to DRR?
Option 1: On the fully convertible Debentures;
Option 2: On convertible part of Partly Convertible Debentures.
Option 3: By the companies that are exempted from transferring amount to DRR.
Option 4: All of the above
Correct Answer: All of the above
Solution : Answer = All of the above
Redemption of Debentures out of Capital means that the company redeems debentures without transferring any amount to DRR out of the profits available for payment of dividends.
The amount is not set aside for DRR
(i) By the companies that are exempted from transferring amount to DRR
(ii) on the fully convertible Debentures; and
(iii) on convertible part of Partly Convertible Debentures.
Thus, in the above cases, redemption of debentures out of capital is possible by all types of Companies except Unlisted companies, other than NBFCs and HFCs.
Hence, the correct option is 4.
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