Comment on the following: No Debenture Redemption Reserve is required to be created for privately placed debentures and for debentures issued by a housing finance company.

The statement is **partially correct**. Provisions of the Companies Act, 2013: Section 71 read with Rule 18 of the Companies (Share Capital and Debentures) Rules, 2014 mandates certain classes of companies issuing debentures to create a Debenture Redemption Reserve (DRR) account out of the profits of the company available for payment of dividend. The amount credited to such account shall not be utilised by the company except for the redemption of debentures. Exemptions from DRR Creation: Every Listed Company (including All India Financial Institutions (AIFIs) regulated by Reserve Bank of India and Banking Companies, listed/unlisted NBFCs and Housing Finance Companies) has been exempted from creation of Debenture Redemption Reserve (in case of both public issue as well as privately placed debentures, as applicable). Requirement for Unlisted Companies: However, an unlisted company is required to create a Debenture Redemption Reserve for privately placed debentures for a value of 10% of the outstanding debentures. Conclusion: While housing finance companies (which are typically listed or regulated NBFCs) are indeed exempted from creating DRR for both public and privately placed debentures, unlisted companies are still required to create DRR for privately placed debentures. Hence, the statement is not entirely accurate as a blanket rule.