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.
Question : Which of the following statements is correct?
Option 1: Debentures Redemption Investment (DRI) can be used by a company for any purpose after the debentures have been redeemed.
Option 2: Debentures Redemption Reserve is not set aside in case the debentures are fully convertible into shares.
Option 3: Debentures Redemption Reserve is set aside, in the case of Partly Convertible Debentures, on the convertible part of the debentures.
Option 4: Debentures Redemption Reserve may be set aside by a company out of any reserve.
Question : Choose which of the following statements is true.
Option 1: Debentures Redemption Reserve is set aside by all the companies except All India Financial Institutions regulated by RBI and Banking Companies.
Option 2: Amount is set aside to Debentures Redemption Reserve by Unlisted Companies which are not Non-Banking Finance Companies (NBFCs) or Housing Finance Companies (HFCs).
Option 3: Amount is set aside to Debentures Redemption Reserve by all Unlisted Companies.
Option 4: Debentures Redemption Investment is made by the companies required to set aside amount to Debentures Redemption Reserve.
Question : Choose which of the following statements is not correct.
Option 1: Debentures Redemption Investment is made by all companies redeeming the debentures.
Option 2: All India Financial Institutions (AIFIs), Banking Companies and Other Financial Institutions are not required to set aside amount to Debentures Redemption Reserve.
Option 3: Unlisted NBFCs and HFCs are not required to invest 15% of Outstanding Debentures in Specified Securities.
Option 4: Debentures Redemption Reserve can be used only for redemption of debentures.
Question : Debentures are redeemed without setting aside an amount to Debentures Redemption Reserve (DRR). It is called redemption ________.
Option 1: Out of capital
Option 2: Out of profit
Option 3: Both 1 and 2
Option 4: None of the above
Question : When Debentures are redeemed setting aside amount equivalent to nominal (face) value of outstanding debentures to Debentures Redemption Reserve (DRR). It is known as redemption -------
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