Question

According to the guidelines issued by Securities and Exchange Board of India (SEBI) what percentage of the amount of debentures must be transferred to ‘Debenture Redemption Reserve’ before the commencement of redemption of debentures, in case of convertible debentures?

विकल्प

• 25%

• 50%

• 100%

• Zero

Answer 1

Zero

Explanation:

As per SEBI guidelines, no Debenture Redemption Reserve (DRR) is required to be created for convertible debentures, whether they are fully or partly convertible. This is because these debentures are converted into shares and not redeemed for cash.