Question

Which of the following is not true about Debenture Redemption Reserve (DRR)?

Options

• DDR is to be created @10% of the amount of debentures issued before commencement of redemption (for unlisted companies).

• Withdrawal from DRR can be made only after 10% of debenture liability has been redeemed.

• DRR is required in case of fully convertible debentures.

• DRR is not required in case of debentures with a maturity period of 18 months or, less.

Answer 1

DRR is required in case of fully convertible debentures.

Explanation:

If non-convertible debentures are issued, whether fully or partially paid, a Debenture Redemption Reserve (DRR) is required.