Elaborate the guidelines provided by SEBI with respect to creation of Debenture Redemption Reserve.

SEBI guidelines on Creation of Debenture Redemption Reserve (DRR) A company has to create DRR in case of the issue of debentures with maturity of more than 18 months. The issuer must create DRR in accordance with the provisions given below. If debentures are issued for project finance DRR can be created upto the date of commercial production. The DRR in respect of debentures issued for project finance may be created either in equal installments or higher amounts if profits so permit. In the case of PCDs, DRR must be created for the non-convertible portion of debenture issues on the same lines as applicable for fully non-convertible debenture issues. In respect of convertible issues by new companies, the creation of DRR must commence from the year the company earns profits for the remaining life of debentures. DRR shall be treated as part of general reserve for consideration of bonus issues proposals and for price fixation related to post-tax return. Company must create DRR equivalent to 50% of the amount of debenture issue before debenture redemption commences. Only after the company has actually redeemed 10% of the debenture liability, withdrawal from DRR is permissible only after the company has actually redeemed 10% of the debenture liability. The requirement of creation of DRR is not applicable to the issue of debt instruments by infrastructure companies.