The Companies (Share Capital and Debentures) Amendment Rules, 2019
MINISTRY OF CORPORATE AFFAIRSNOTIFICATIONNew Delhi, the 16th August, 2019 G.S.R. 574(E).—In exercise of the powers conferred by sub-sections (1) and (2) of section 469 of theCompanies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further toamend the Companies (Share Capital and Debentures) Rules, 2014, namely: –1. (1) These rules may be called the Companies (Share Capital and Debentures) Amendment Rules, 2019.(2) They shall come into force on the date of their publication in the Official Gazette.2. In the Companies (Share Capital and Debentures) Rules, 2014, in rule 4 (hereinafter referred to as theprincipal rules), in sub-rule (1), –(i) for clause (c), the following clause shall be substituted, namely:-“(c) the voting power in respect of shares with differential rights of the company shall not exceed seventyfour per cent. of total voting power including voting power in respect of equity shares with differentialrights issued at any point of time;” ;(ii) clause (d) shall be omitted.3. In the principal rules, in rule 5, in sub-rule (3), in the Explanation, occurring at both the places, for the word“director”, the words “director or company secretary” shall be substituted.4. In the principal rules, in rule 12, in sub-rule (1), in proviso to Explanation, –(i) for the letters, figures, brackets and words “G.S.R. 180(E), dated 17th February, 2016 issued by theDepartment of Industrial Policy and Promotion” the letters, figures, brackets and words ”G.S.R.127(E), dated 19th February, 2019 issued by the Department for Promotion of Industry and InternalTrade” shall be substituted. ;4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)](ii) for the words “five years”, the words “ten years” shall be substituted.5. In the principal rules, in rule 18, for sub-rule (7), the following sub-rule shall be substituted, namely: –“(7) The company shall comply with the requirements with regard to Debenture Redemption Reserve (DRR)and investment or deposit of sum in respect of debentures maturing during the year ending on the 31st day ofMarch of next year, in accordance with the conditions given below:-(a) Debenture Redemption Reserve shall be created out of profits of the company available for payment ofdividend;(b) the limits with respect to adequacy of Debenture Redemption Reserve and investment or deposits, asthe case may be, shall be as under;-(i) Debenture Redemption Reserve is not required for debentures issued by All India FinancialInstitutions regulated by Reserve Bank of India and Banking Companies for both public as wellas privately placed debentures;(ii) For other Financial Institutions within the meaning of clause (72) of section 2 of the CompaniesAct, 2013, Debenture Redemption Reserve shall be as applicable to Non –Banking FinanceCompanies registered with Reserve Bank of India.(iii) For listed companies (other than All India Financial Institutions and Banking Companies asspecified in sub-clause (i)), Debenture Redemption Reserve is not required in the followingcases –(A) in case of public issue of debentures –A. for NBFCs registered with Reserve Bank of India under section 45-IA of the RBI Act,1934 and for Housing Finance Companies registered with National Housing Bank;B. for other listed companies;(B) in case of privately placed debentures, for companies specified in sub-items A and B.(iv) for unlisted companies, (other than All India Financial Institutions and Banking Companiesas specified in sub-clause (i)) –(A) for NBFCs registered with RBI under section 45-IA of the Reserve Bank of India Act, 1934 andfor Housing Finance Companies registered with National Housing Bank, Debenture RedemptionReserve is not required in case of privately placed debentures.(B) for other unlisted companies, the adequacy of Debenture Redemption Reserve shall be tenpercent. of the value of the outstanding debentures;(v) In case a company is covered in item (A) or item (B) of sub-clause (iii) of clause (b) oritem (B) of sub-clause (iv) of clause (b), it shall on or before the 30th day of April in eachyear, in respect of debentures issued by a company covered in item (A) or item (B) of subclause (iii) of clause (b) or item (B) of sub-clause (iv) of clause (b), invest or deposit, as thecase may be, a sum which shall not be less than fifteen per cent., of the amount of itsdebentures maturing during the year, ending on the 31st day of March of the next year inany one or more methods of investments or deposits as provided in sub-clause (vi):Provided that the amount remaining invested or deposited, as the case may be, shall not at any timefall below fifteen percent. of the amount of the debentures maturing during the year ending on 31st dayof March of that year.(vi) for the purpose of sub-clause (v), the methods of deposits or investments, as the case may be, areas follows:—(A) in deposits with any scheduled bank, free from any charge or lien;(B) in unencumbered securities of the Central Government or any State Government;(C) in unencumbered securities mentioned in sub-clause (a) to (d) and (ee) of section 20 of theIndian Trusts Act, 1882;(D) in unencumbered bonds issued by any other company which is notified under sub-clause(f) of section 20 of the Indian Trusts Act, 1882:¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 5Provided that the amount invested or deposited as above shall not be used for any purposeother than for redemption of debentures maturing during the year referred above.(c) in case of partly convertible debentures, Debenture Redemption Reserve shall be created in respect ofnon-convertible portion of debenture issue in accordance with this sub-rule.(d) the amount credited to Debenture Redemption Reserve shall not be utilized by the company except forthe purpose of redemption of debentures.“ [F. No. 01/04/2013-CL-V- Part-III]K.V.R. MURTY, Jt. Secy. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting
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