14 January 2010
Dear Sir, I would like to know if the Debenture Redemption Reserve (DRR) of the company includes the face value of the debentures issued. In my understanding: (A) the DRR is fed only from the profits of the company and if the company does not make any profits, the DRR will remain empty to that extent; (B) the face value of the debentures issued does not go into the DRR, nor can the company allocate such funds into the DRR. Please confirm this. Thanks in anticipation.
15 January 2010
DRR is only a reserve meant to set aside profits which are available for appropriation. If the co. does not have profits, no DRR is created. If DRR is created out of profits, then after redemption, the DRR is transferred to GR.
CAclubindia
