What is the restriction on the use of the amount invested or deposited for debenture redemption?
Answer & explanation
Correct answer: option 3
The restriction on the use of the amount invested or deposited for debenture redemption is that it cannot be utilized for any purpose other than the specific redemption of debentures. This regulation ensures that the funds set aside for debenture redemption are dedicated solely to meeting the company's obligation to repay the debentures when they mature. These funds cannot be diverted for other operational expenses, dividends, expansion, acquisitions, or any other purpose unrelated to debenture repayment. This restriction safeguards the interests of debenture holders by guaranteeing that the funds are available for their rightful redemption when due.