Which of the following companies is exempted from creating DRR(Debenture redemption reserve)?

A) Listed companies
B) All India financial institutions regulated by RBI
C) Banking companies
D) Unlisted companies
E) Non banking finance companies registered with RBI
F) Housing finance companies registered with National Housing Bank
G) Investment companies

Choose the correct answer from the options given below.

ABCEF

The correct answer is option 2- ABCEF.

Generally, debentures are redeemed on due date but a company may redeem its debentures before maturity date, if its articles provides for such. A company may source its redemption of debentures either out of capital or out of profits.

As per the Act, all India financial institutions registered by Reserve Bank of India, banking companies, NFBCs registered with Reserve bank of India, Housing Finance companies registered to the National Housing bank and the companies listed on stock exchange and unlisted companies are exempted from creating Debenture Redemption Reserve and may redeem debentures out of capital. Whereas for "other unlisted companies", the adequacy of Debenture Redemption Reserve shall be ten percent of the value of the outstanding debentures