Amendments to Debenture Trustee Regulations, 1993. Rule 18 (7) of Companies (Share Capital and Debenture) Rules, 2014 (Final Rules, 2014) , published in Official Gazette w.e.f 1st April, 2014 for the purpose Section 71 (4) of the Companies Act, 2013 provided the following: (b) the company shall create Debenture Redemption Reserve (DRR) in accordance with following conditions:- B. Rule 18 Creation of Debenture Redemption Reserve (DRR)… Companies should on or before 30th April in each year, in respect of debentures issued by them, invest or deposit, a sum which is at least 15%, of the amount of its debentures maturing during the … Companies (Share Capital and Debentures) Amendment Rules, 2020. For measuring adequacy of the Debenture Redemption Reserve (which is a reserve required to be created for the purposes of redemption of debentures, out of the profits of a company) (“DRR”), a company shall now take the value only of its ‘outstanding’ debentures, and not of all its debentures. Debenture Redemption Reserve: In order to protect the interest of the debenture holders, as per section 71 (4) of the Act, the companies, which have issued debentures, are mandatorily required to create a DRR account and transfer the stipulated sum of money to such account, every year, out of the profits of the company. Company Accounts 4.47 outstanding debentures issued . (d) in case of partly convertible debentures, Debenture Redemption Reserve shall be created in respect of non-convertible portion of debenture issue in accordance with this sub-rule. Under the companies law, these entities raising money had to create Debenture Redemption Reserve (DRR) and that requirement has now been done away with. A provision that was added to the Indian Companies Act of 1956 during an amendment in the year 2000. (e) the amount credited to the Debenture Redemption Reserve shall not be utilised by the company except for the purpose of redemption of debentures. Debenture redemption reserve. “ensure the implementation of the conditions regarding creation of security for the debentures, if any, debenture redemption reserve and recovery expense fund;” ii. In the principal rules, in Rule 18, for sub-rule (7), the following sub-rule shall be substituted, namely: – “(7) The company shall comply with the requirements with regard to Debenture Redemption Reserve (DRR) and investment or deposit of sum in respect of debentures maturing during the year ending on the 31st day of March of next year, in accordance with the conditions given below:- Companies (Share Capital and Debentures) Amendment Rules, 2019, Company Act, 2019. Companies (Share Capital and Debenture) Amendment Rules, 2019. 3.3.4 Investment of Debenture Redemption Reserve (DRR) amount . debentures maturing during the year ending on the 31st day of March of next year, in accordance with the conditions given below:- (a) Debenture Redemption Reserve shall be created out of profits of the company available for payment of dividend; (b) the limits with respect to adequacy of Debenture Redemption Reserve and The Ministry of Corporate Affairs issued a Notification on 19th July, 2016 amending the erstwhile Companies (Share Capital and Debentures) Rules, 2014. debenture redemption reserve. in sub-regulation (1), clause (t) shall be substituted by the following, namely, — Home » Corporate Law » Companies (Share Capital and Debenture) Amendment Rules, 2019. Companies (Share Capital and Debentures) Third Amendment Rules, 2016 (the Rules) 2. the company shall create Debenture Redemption Reserve equivalent to at least fifty percent of the amount raised through the debenture issue before debenture redemption commences '' Please take note that other conditions related to investment 15% of the amount of the reserve in specified securities etc, has not been changed. Hence when their period expires, debenture holders are paid back their principal amount. (e) the amount credited to the Debenture Redemption Reserve shall not be utilised by the company except for the purpose of redemption of debentures. Published on: August 17, 2019 by Sachin Thakur. Amendment to issue of sweat equity shares, debenture redemption reserve [To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i)l Out of profits for redeeming the debentures debentures Rules, 2019, Company,! 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