Debenture Redemption Reserve is created by: A. Service Sector Company…

The correct answer is Option (2) → A, B and D only

The book lists the companies exempted from creating a Debenture Redemption Reserve: all India financial institutions, banking companies, NBFCs registered with the RBI and housing finance companies, among others. For the other unlisted companies the reserve must be ten per cent of the outstanding debentures. A service, manufacturing or automobile company is not in the exempted classes.

(A) Service Sector Company — True. An ordinary company issuing debentures; no exemption covers it.

(B) Manufacturing Company — True. It falls under the general rule.

(C) Banking Company — False. Banking companies are exempted.

(D) Automobile Company — True. It is an ordinary manufacturing company.

(E) NFBC's registered with RBI — False. NBFCs registered with the RBI are exempted.

Note: The NCERT sentence also names “the companies listed on stock exchange and unlisted companies” among the exempted ones, and the next sentence then asks “other unlisted companies” to keep the reserve; the book’s wording is loose here. Read it as: listed companies are exempt, while ordinary unlisted companies must create the reserve.