Explain the provision for creation of debenture redemption reserve account under the Companies Act, 2013. Also, assess the validity of the Board's proposed action to utilise this reserve account for payment of interim di

Section 71(4) of the Companies Act, 2013 read with Rule 18(7) of Companies (Share Capital and Debentures) Rules, 2014, provides that when debentures are issued by a company, the company shall create a debenture redemption reserve account (DRR) out of the profits of the company available for payment of dividend. The amount credited to such account shall not be utilized by the company except for the redemption of debentures. In view of these provisions, the proposed action of the Board to utilize the DRR account for payment of interim dividend and conversion of partly paid equity shares into fully paid equity shares shall not be valid.