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Explain Debenture Redemption Reserve (DRR)
Debenture Redemption Reserve is non-convertible debentures which has to be created by seeing the profits and the shares as more it grows more the amount will be collected. For this an upto date commercial project finance has to be produced and provided so that creation of the DRR can be done. If there is a profit and the utilization of the profit has to be done then the DRR can be created either in higher amounts or in equal instalments for a long duration of time. If residual profits after transfer to DRR are not enough to distribute the dividend then companies are allowed to distribute the dividend from general reserves for certain years. DRR takes only 50% of the amount of debenture issue which has been created through the process.
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