Key Takeaways:
- Intimations to debenture trustees / holders of NCDs and NCRPs
- Structure / terms of NCDs and NCRPs
- Record date
- Functional Website
3. 3
Legends used in the Presentation
BOD Board of Directors PCS Practising Company Secretary
FY Financial Year RBI Reserve Bank of India
LE Listed Entity RD Regional Director
LODR Listing Obligations and Disclosures
Requirements
Reg. Regulation
NBFC Non-Banking Financial Company ROC Registrar of Companies
NCD Non-Convertible Debentures SCRA Securities Contract Regulation Act
NCLT National Company Law Tribunal SE Stock Exchange
NCRP Non-Convertible Preference Shares SEBI Securities and Exchange Board of
India
PCA Practising Chartered Accountant Sec. Section
4. 4
Presentation Schema
Documents and
Intimations to
debenture trustees
Other submissions
to SE(s) with
example
Documents &
Information to
holders of NCDs
and NCRPs
Structure of NCDs
and NCRPs
Case law Record date
Terms of NCDs and
NCRPs
Transfer /
transmission and
transposition of
Securities
Websites
5. Reg. 56- Documents and Intimations to
debenture trustees
5
The LE shall promptly forward the following to the debenture trustee-
• a copy of the annual report at the same time as it is issued along with a
copy of certificate from LE's auditors in respect of utilization of funds
during the implementation period of the project for which the funds have
been raised
•If debentures / preference shares issued for financing working capital /
general corporate purposes / for capital raising purposes- the copy of the
auditor's certificate may be submitted at the end of each FY till the funds
have been fully utilized / the purpose for which these funds were intended
has been achieved
6. Contd.
6
A copy of all notices, resolutions and circulars relating to-
(i) new issue of NCDs at the same time as they are sent to shareholders/ holders of NCDs
(ii) the meetings of holders of NCDs at the same time as they are sent to the holders of
NCDs or advertised in the media including those relating to proceedings of the meetings
A half-yearly certificate regarding maintenance of 100% asset cover in respect of listed
NCDs, by a PCS or a PCA, along with the half yearly financial results
Non-applicability of submission of half yearly certificates -
If a LE is a bank / NBFC registered with RBI / where bonds are secured by a Government
guarantee
Intimations regarding-
(i) any revision in the rating
(ii) any default in timely payment of interest / redemption / both in respect of the NCDs
(iii) failure to create charge on the assets
The above information can be sent in electronic form / fax subject to the approval of
debenture trustee
The LE shall forward to the debenture trustee any such information sought and provide
access to relevant books of accounts as required by the debenture trustee
7. Reg. 57 – Other submissions to SE(s)
7
A certificate has to be submitted to the SE within 2 days of the interest /
principal / both becoming due, stating that it has made timely payment of
interests / principal obligations / both in respect of the NCDs
An undertaking shall be provided to the SE(s) on annual basis stating that all
documents and intimations required to be submitted to Debenture Trustees
in terms of Trust Deed and SEBI (Issue and Listing of Debt Securities) Reg.,
2008 have been complied with
Any other information shall be forwarded by LE to the SE(s) in the manner
and format as prescribed by the Board from time to time
9. Reg. 58. Documents & Information to
holders of NCDs and NCRPs
9
LE shall send the following documents-
Half yearly communication as specified in reg. 52 (4) & (5) to holders of NCDs and NCRPs:
Reg. 52 (4)- Disclosures to be made along with financial results
Reg. 52 (5)- Certificate from debenture trustee
Hard copy of statement containing the salient features of all the documents, as specified
in Sec. 136 of Companies Act, 2013 and rules made thereunder to those holders of NCRPs
who have not registered their email address
Soft copies of full annual reports to all the holders of NCRPs who have registered their
email address(es) for this purpose
Hard copies of full annual reports to those holders of NCDs and NCRPs, who request for
the same
Sec. 136- Right of members to audited Financial statements
Documents- Financial statements including Consolidated financial statements, auditor’s
report, director’s report / a statement containing salient features of such documents in
form AOC-3
10. Contd.
10
LE shall send the notice of all meetings of holders of NCDs and NCRPs specifically stating
that the provisions for appointment of proxy as mentioned in Sec. 105 of the Companies
Act, 2013, shall be applicable for such meeting
LE shall send proxy forms to holders of NCDs and NCRPs which shall be worded in such a
manner that holders of these securities may vote either for or against each resolution
Sec. 105 of Companies Act, 2013- Any member of a company entitled to attend and vote
at a meeting of the company shall be entitled to appoint another person as a proxy to
attend and vote at the meeting on his behalf
11. Reg. 59- Structure of NCDs and NCRPs
11
No material modification shall be made to the
following without the prior approval from SE(s) where
the NCDs / NCRPs are listed-
a) To the structure of the debenture in terms of
coupon, conversion, redemption, or otherwise
b) To the structure of NCRPs in terms of dividend,
conversion, redemption, or otherwise
The above approval shall be provided only after
the approval of-
a) BOD
b) Debenture trustee in case of NCDs and
c)Complying with the provisions of Companies
Act, 2013 including approval of the consent of
requisite majority of holders of that class of
securities.
12. Case law
12
East West Pipeline
Limited (formerly
Reliance Gas
Transportation
Infrastructure Ltd.)
Sikka Ports 85 Terminals
Limited (formerly
Reliance ports &
Terminals Ltd.)
Entered into a scheme of arrangement for demerger of Investment division of the Transferor
Company to the Transferee Company
Transferor
Company Transferee
Company
Therefore, the parties filed a petition to NCLT under sec. 230 to 232 of Companies Act, 2013
read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016
seeking directions for convening meetings of shareholders and creditors.
13. Contd.
13
Tribunal in its order directed to hold separate meetings
for each class of shareholders and creditors
Tribunal directed to issue notices to RD, ROC, Income
Tax authorities, SEBI and the SE(s) with a direction that
the authorities shall submit their representations, if any
within 30 days of receipt of notice
On receipt of notice SEBI addressed the Petitioner
Companies seeking clarifications on certain matters on
20th June, 2018
Both the parties duly convened the meetings of
shareholders and creditors as directed by the Tribunal
on 21st June, 2018
And the scheme was unanimously approved by the
shareholders and creditors in their respective meetings
14. Contd.
14
The petitioner companies replied to the clarification sought
by SEBI confirming compliance with reg. 11- Scheme of
Arrangement and reg. 59- Structure of NCDs and NCRPs27th June, 2018
• Reg. 11- Scheme of Arrangement- LE shall ensure that any scheme of
arrangement /amalgamation /merger / reconstruction /reduction of capital etc. to
be presented to any Court or Tribunal does not in any way violate, override or
limit the provisions of securities laws or requirements of SE(s).
• National Stock Exchange had given its no objection in terms of reg. 59 and thus
NSE letter dated 4th July, 2018 confirming compliance was placed on record.
The petitioner companies petition seeking sanction of
Scheme of arrangement was admitted by Tribunal5th July, 2018
SEBI stated that it does not have any further comments to
offer on the scheme10th July, 2018
RD also made a representation on 14th June, 2018 and Petitioners replied to the
same on 25th June, 2018 undertaking compliances as sought by RD
As there were no other representations from any other authority, it was held by
the Tribunal that the scheme appears to be genuine and bona fide and thus
sanctioned the scheme in the interest of shareholders and creditors
15. Reg. 60- Record date
15
LE shall fix a record date for purposes of payment of interest, dividend and payment of
redemption / repayment amount / for such other purposes as specified by the SE
LE shall give notice in advance of at least 7 working days (excluding the date of intimation
and the record date) to the recognized SE(s) of the record date / as many days as the SE(s)
may agree to / require specifying the purpose of the record date.
16. Reg. 61- Terms of NCDs and NCRPs
16
LE shall ensure timely payment of interest/ dividend/ redemption amount
It shall not declare / distribute any dividend if it has made any default in paying
interest/ redemption amount / in creation of security as per terms of debt securities
The above shall not be applicable in case of unsecured debt securities issued by
regulated financial sector entities eligible for meeting capital requirements as specified
by respective regulators
LE shall not forfeit unclaimed interest/dividend and
Such unclaimed interest/ dividend shall be transferred to the ‘Investor Education and
Protection Fund’ set up as per Sec. 125 of the Companies Act, 2013
LE shall not select any of its listed securities for redemption otherwise than pro rata
basis / by lot
17. Contd.
17
LE shall comply with requirements as specified in reg. 40 for transfer of securities
including procedural requirements specified in Schedule VII
Reg.40 – Transfer of Securities
Condition for transfer: Securities shall be in held dematerialised form with the
depository*
*Inserted w.e.f. 08/06/2018
Circular dated 31st July, 2020:
SEBI has considered the representations from investors that they have not been able
to participate in open offers, buybacks and delisting of securities of LE as their
securities are not held in demat form.
It is thus clarified that the shareholders holding securities in physical form are
allowed to tender shares in open offers, buy-backs through tender offer route and exit
offers in case of voluntary or compulsory delisting. Such tender shall be as per the
provisions of respective regulations.
18. Contd.
18
The BOD may
delegate the
power of
transfer of
securities to
-A committee
-Compliance
officer
-Registrar to an
issue and/ or
share transfer
agent
The BOD/
delegated
authority shall
attend to the
formalities
relating to
transfer at least
once in a
fortnight
The delegated
authority shall
report the
details on
transfer in each
BOD meeting
19. Reg. 62- Websites
1919
LE shall maintain a functional website containing the following information-
(a) details of its business
(b) financial information including complete copy of the annual report including balance
sheet, profit and loss account, directors report etc.
(c) contact information of the designated officials of LE who are responsible for assisting
and handling investor grievances
(d) email address for grievance redressal and other relevant details
(e) name of the debenture trustees with full contact details
(f) the information, report, notices, call letters, circulars, proceedings, etc. concerning NCDs
or NCRPs
(g) all information and reports including compliance reports filed
(h) information with respect to the following events:
(i) default by issuer to pay interest on or redemption amount
(ii) failure to create a charge on the assets
(iii) revision of rating assigned to the non convertible debt securities
The above may also be issued as a press release
LE shall ensure that the contents of the website are correct and updated at any
given point of time