Issue of Debentures — Secretarial Practice STD 12 Commerce / Arts — Question

Can the retained earnings be converted into capital?

A Company has an export order which is to be completed by June 15. It feels it may fall short of funds (₹ 5,00,000) as all its investments are likely to mature after July 15. Question (a) Does it cancel the export order? Question (b) What financial arrangements are to be made if it has to complete the order? Question (c) What is the amount of interest it has to pay?

What does he receive as a return on his investment?

What type of source retained earning is?

There are 2 companies namely company A and company B with the same financial positions and in the same line (producing the same type of products) willing to issue debentures to more than 500 people. Company A is issuing 12% redeemable debentures to be redeemed after 5 years and Company B is issuing 12% convertible debentures which will be converted after 5 years. As an investor.Question (a). Which company would one like to invest in? Question (b) Is it worth investing or going for convertible or redeemable? Why? Question (c) Is there any party to be appointed to look into the safety of debenture holders?

State anyone, right he will enjoy as a shareholder.

Is the proposed issue within the borrowing powers of the board?

Should the company create a charge on its assets?

What can be the maximum tenure of the debentures to be issued?

Violet Ltd. Company plans to raise ₹ 10 crores by issuing debentures. The Board of Directors has some queries. Please advise them on the following: