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Question 06 Chapter 10 of +2-A
6. SRC Ltd. has issued on 1st April 2017, 20,000, 12% Debentures of 100 each redeemable
by draw of lots as under:
During the year ended on 31st March 2018: 15%
During the year ended on 31st March 2019: 25%
During the year ended on 31st March 2020: 15%
During the year ended on 31st March 2021: 25%
During the year ended on 31st March 2022: 20%
How much minimum investment should be made by SRCC Ltd. as per Companies Act, 2013 before redemption of debentures? When should it be made?
| Year ended on |
Date of Investment |
Redeemable Amount | Minimum amount of DRI |
|---|---|---|---|
| 2018 March 31 |
2017 April 30 |
Rs 20,00,000 × 15% = Rs 3,00,000 |
Rs 3,00,000 × 15% = Rs 45,000 |
| 2019 March 31 |
2018 April 30 |
Rs 20,00,000 × 25% = Rs 5,00,000 |
Rs 5,00,000 × 15% = Rs 75,000 |
| 2020 March 31 |
2019 April 30 |
Rs 20,00,000 × 15% = Rs 3,00,000 |
Rs 3,00,000 × 15% = Rs 45,000 |
| 2021 March 31 |
2020 April 30 |
Rs 20,00,000 × 25% = Rs 5,00,000 |
Rs 5,00,000 × 15% = Rs 75,000 |
| 2022 March 31 |
2021 April 30 |
Rs 20,00,000 × 20% = Rs 4,00,000 |
Rs 4,00,000 × 15% = Rs 60,000 |
Section 71 (4) of the Companies Act, 2013 requires that an amount equal to at least 25% of the value of debentures is to be transferred to the Debenture Redemption Reserve Account. So, Rs 2,50,000 is required to be transferred to DRR i.e. 25.
Further, Rule 18 (7) requires every company that is required to create DRR to invest an amount at least equal to 15% of the value of debentures in specified securities. So, Rs 1,50,000 is to be invested in specified securities i. e. 15.
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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