Which of the following is true regarding uncertainty and organizations?

24. Which of the following is true regarding uncertainty and organizations?

a.	Through proper preparation, the potential crises facing an organization can be totally eliminated.
b.	Business leaders often prepare to handle only the types of crises they’ve already suffered.
c.	Business leaders often do not prepare to handle any possible crises.
d.	None of these are true

ANS:  B                   

   25.   Many potential crises facing organizations _____.

a.	can have their consequences reduced by anticipation and preparation for their likelihood and severity
b.	are unforeseeable and unable to be prepared for
c.	can be eliminated with adequate preparation
d.	none of these

ANS:  A                      

   26.   According to Change Competency: Shoes For Crews Reduces Risk and Uncertainty, what doe the Shoes for Crews warranty cover?:

a.	It consists of a lifetime guarantee and will replace shoes for employees as needed- free of charge
b.	It reimburses companies up to $5,000 for each worker’s compensation claim paid if an employee slips and encounters an injury while wearing a pair of the company’s shoes.
c.	It covers all of a worker’s compensation claim paid if an employee slips and encounters an injury while wearing a pair of the company’s shoes.
d.	None of these are true

ANS:    B

How debentures are redeemed?

Debenture creates a charge against some or all of the assets of the company.

Charge on debentures may be fixed or floating, depends upon the condition of issue.
Debentures may be redeemed after a fixed number of years or after a certain period has elapsed. Many debentures are issued with the notice that they may be redeemed at the option of the company within a specified period of time and at a price specified. The debentures may be redeemed in one of the four ways:
(a) By payment in lump sum at the end of a specified period of time; or
(b) By payment in annual installments;
(c) By purchasing its own debentures in the open market.
(d) By conversion into shares.

For redemption of Debentures a company shall maintain Debenture Redemption Reserve Fund

Guidelines of SEBI regarding issue of convertible debentures for disclosure and investor protection

SEBI guidelines regarding issue of convertible debentures for disclosure and investor protection are as follows:

(i) Issue of Fully Convertible Debentures (FCDs) having a conversion period of more than 36 months will not be permissible, unless conversion is made optional with “put” and “call” option.

(ii) No company shall make a public issue or rights issue of debts instruments (whether convertible or not), unless credit rating of not less than investment grade is obtained from not less than two registered credit rating agencies and disclosed in the offer document. All the credit ratings including the unaccepted credit ratings shall be disclosed.

(iii) All the credit ratings obtained during the 3 years preceding the public or rights issue of convertible debentures for any listed security of the issuer company shall be disclosed in the offer document.

(iv) No company shall issue a prospectus or a letter of offer to the public for subscription of its debentures without the appointment of a debenture trustees or creation of Debenture Redemption Reserve, in accordance with the provisions of the Companies Act, 1956. The names of the debenture trustees shall be stated in the Offer Document and also in all the subsequent periodical communication. Also a trust deed shall be executed within 3 months of the closure of the issue.

(v) The merchant banker shall ensure that the security created is adequate to ensure 100% asset cover for the debentures and is free from any encumbrances and also the necessary permissions to mortgage the assets or No objection certificate for a second or pari passu charged in cases where assets are encumbered have been obtained.

(vi) Premium amount on conversion and time of conversion, shall be predetermined by the issuer company and stated in the prospectus. Interest rates for the above debentures will also be freely determined by the issuer company.

(vii) Any conversion in part or whole of the debentures will be optional in the hands of the debenture holders, if the conversion takes place at or after 18 months from the date of allotment, but before 36 months.

(viii) Premium amount at the time of conversion for the Partly Convertible Debentures (PCD) shall be predetermined and stated in the prospectus. Redemption amount, period of maturity, yield on redemption for the PCDs or NCDs shall also be indicated in the prospectus.

(ix) In case, the non-convertible portions of PCDs or NCDs are to be rolled over with or without change in the interest rate, a compulsory option should be given to those debenture holders who want to withdraw and encash from the debenture programme. Roll over shall be done only in cases where debenture holders have sent their positive consent and not on the basis of the non-receipt of their negative reply.

(x) Before roll over of any NCDs or non-convertible portion of the PCDs, at least two credit ratings of not less than investment grade shall be obtained within a period of six months prior to the due date of redemption and communicated to debenture holders before roll over and fresh trust deed shall be made.

(xi) Letter of information regarding roll over shall be vetted by SEBI with regard to the credit ratings, debenture holder’s resolution, option for conversion and such other items which SEBI may prescribe from time to time.

(xii) The disclosures relating to raising of debentures will contain, amongst other things, the existing and future equity and long term debt ratio, servicing behavior on existing debentures, payment of due interest on due dates on long term loans and debentures, certificate from a financial institution or bankers about their no objection for a second or pari passu charge created in favour of the trustees to the proposed debenture issues.

(xiii) SEBI may prescribe additional disclosure requirement from time to time, after due notice.