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creation of debenture redemption reserve

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Nidhi Jain

987 Points Joined October 2010

can any one tell me how to createdebenture redemtion reserve means we have o create et the end of the year??????????? and we have to transfer a certain percentage to DRR without transferring GR or first we have to transfer GR

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Guest

Section 117 C of the Companies Act casts an obligation on the company to create a Debenture Redemption Reserve.

This account will be credited with proceeds from the profits of the company arrived at every year till redemption of the debentures.

Act does not required specifically that transfer of the amount to the DRR be on monthly basis. So it can be at the year end too. As such Transfer is Mandatory, its a Prerequisite for any other Tranfer. Hence, No transfer of Profit could take place before adequate amount is transferred to DRR.