A public limited company is a manufacturer of chemical fertilisers. Its annual turnover is ₹ 50 crores . The company had issued 5,000, 12% Debentures of ₹ 500 each at par. Calculate the amount of Debentures Redemption Reserve which needs to be created to meet the requirements of law.

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Solution

$\begin{array}{l} Amount required to be transferred to DRR = 25% of Face value of Debentures \\ = 25% of Rs 25,00,000 = Rs 6,25,000 \end{array}$

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A public limited company is a manufacturer of chemical fertilisers. Its annual turnover is ₹ 50 crores . The company had issued 5,000, 12% Debentures of ₹ 500 each at par. Calculate the amount of Debentures Redemption Reserve which needs to be created to meet the requirements of law.

Amount required to be transferred to DRR=25% of Face value of Debentures =25% of Rs 25,00,000=Rs 6,25,000

$\begin{array}{l} Amount required to be transferred to DRR = 25% of Face value of Debentures \\ = 25% of Rs 25,00,000 = Rs 6,25,000 \end{array}$