Page 155 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes The RFU approached Goodform to help generate sales of these debentures.
The Work
Telesales
Goodform carried out an ambitious telesales and database marketing campaign with the
goal of selling all 4,000 personal debentures at £6,000 each.
Administration
Goodform looked after all areas of administration of the sales, including payment
processes. Our handling of this labour-intensive work meant that the RFU could operate
most effectively in this area of their business.
Database Management
Goodform established a database which was fundamental to the scheme. Our effective
management gave the RFU the platform to build relationships with the sport’s core
enthusiasts, and by providing an established definitive database of rugby enthusiasts,
were able to assist with the RFU’s future marketing of the sport.

The Result
1. All 4,000 personal debentures were sold in a 4 month period generating £24 million
in revenue.

2. In addition, we established a definitive database of rugby enthusiasts to aid the
RFU’s marketing of the sport.

Source: http://www.goodform.info/page.asp?section=177§ionTitle=RFU

6.9 Summary

 A Debenture is a unit of loan amount issued to the lenders of the company. Debenture
includes debenture stock, bond and any other security whether constituting a charge on
the company’s assets or not.
 Issue of debentures: Debentures can be issued for cash at par, for consideration other than
cash, as collateral security debentures are said to be oversubscribed when the company
receives application for number of debentures than the company has offered for
subscription.
 Debenture can be issued at premium, at discount and in consideration other than cash.
 Debentures can be issued with conditions stipulated to their redemption as:

 Issued at par redeemable at par
 Issued at discount redeemable at par
 Issued at premium redeemable at par
 Issued at par redeemable at premium
 Issued at discount redeemable at premium

 Issue of debentures as collateral security means issuing debentures to the lending agency
that has given loan as additional/secondary security.
 Issue of fully convertible debentures (FCD) having a conversion period of more than 36
months will be permissible, unless conversion is made with “put” and “call” option.

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