creation of debenture redemption reserve

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.