debentures

Debentures, obligation of the company

The company shall make sure that

the offer letter shall contain material, true and factual information and shall not contain any misleading information and must state that the affairs of the company accept the responsibility for document such that contained in the document;

the company shall not give any new shares including by way of shares of bonus from the resolution passing date which is authorizing special the buy-back till the offer closure date in which are under the rules, arising out except those of any instrument which is convertible that are excellent;

the company shall confirm the opening of separate bank int he offer account adequately for this funded purpose and to pay only the consideration by way of cash;

the company shall not withdraw once it has announced the offer which is offered by the shareholders;

the company shall not use any money which is borrowed from banks or shares financial institutions buying back for the purpose; and

the company shall not use any issue that proceeds which is an earlier of the same kind of shares or other buy-back specified securities of the same kind.

Shares registration/bought back securities.

The company shall maintain the register of shares or other securities that have been bought-back in Form No. SH.10.

The register of shares or bought-back securities shall be maintained at the registered office of the company and shall be kept in the secretary of the company or any other person who is authorized by the board in its behalf.

The entries register by the secretary of the company shall be authenticated or by any other authorized person by the board for the purpose.

Buy-back return.

The company after completion of buy-back under these rules, which shall file with the registrar, and in case with the listed company registrar and in Securities and Exchange Board of India, in the Form No. SH.11 along with the fee.

There shall be annexed to the return of files with the registrar in Form No.SH.11, a certificate in Form No.SH.15 signed by the two directors of the company including the managing director, if any, certifying that the buy-back securities has been made in compliance with the provisions fo the Act and there under made the rules.

DEBENTURES:

Secured debentures;

The company shall not issue the secured debentures, unless it complies with the following conditions, namely:-

An debentures which is secured may be made issue, provided that its date of redemption shall not exceed from the ten years issue date:

An engaged company in setting up the infrastructure of the projects may issue debentures for ten years period exceeding but not exceeding thirty years;

such an issue of debentures shall be secured by the creation of the charge, on the properties or the assets of the company, having the sufficient value for the repayment debenture amount due and interest thereon:

the company shall appoint a debenture of trustee before the issue of the prospectus or its debenture subscription offer letter and not later than sixty years after the allotment of debentures, execute debenture trustee deed trust to safeguard the interest of the debenture holder and

the debenture security by way of mortgage or charge shall be created in favor of the debenture trustee on–

the security of debentures by a way of charge or mortgage shall be created in favor of the trustee of the debenture on–

any movable property that is specific (not being in the nature of pledge); or

any immovable property that is specific wherever located, or therein any interest

The company shall appoint-the debenture trustees under sub-section (5) of section 71 after complying with the following conditions, namely:-

the debenture name trustees shall be mentioned in the offer letter subscription of debentures and also int eh notices that are subsequent or other communications to the debenture holders that are sent;

before the appointment of the trustee of debenture or trustees, a consent which is written shall be obtained from such trustee of the debenture or declared trustee to be appointed and to the statement effect shall appear in the offer letter which is issued for inviting the subscription of the debentures.

a person shall not be appointed as a debenture trustee, if he–

holds beneficially the shares of the company;

is a promoter, director or key managerial personnel or any other officer or the company employee or its subsidiary, holding or associate company;

is beneficially entitled to moneys that are paid by the company otherwise company as payable remuneration to the debenture trustee;

to the indebted company; or its subsidiary or its holding or associate company or such subsidiary holding company;

has furnished any guarantee in accordance of the principal debts by the secured debentures or interest thereon

has any peculiar relationship with the capital amounting to two per cent or gross more turn over or total income or fifty lakh rupees or as may be prescribed such higher amount, lower which-ever during the two immediately financial year or during the current financial year;

is any relative promoter or any person who is in the company employment as a director or key managerial; personnel.

the board may fill any casual vacancy of the debentures trustee resignation, the vacancy shall only be filled with the debenture written consent majority holders.

any debenture trustee may be removed from before the office of his term which expired only if it is approved by the holders of not less than the outstanding debenture three-fourth of the outstanding values.

It shall be every trustee debenture duty to–

satisfy himself that the offer letter does not contain any matter which is not consistent with the debenture issues terms or with the deed of trust;

satisfy himself that the covenant in the trust deed are not prejudicial to the interest of the debenture holders.

call for periodical status or performance of report from the company;

promptly communicate to the defaults of the debenture holders, if any, with regard to interest payment or redemption of debentures and action taken by therefore the trustee;

appoint a company nominee director on the board in the event of–

two consecutive default in the payment of interest to the debenture holders;

default in creation of the security of the debentures; or

default in redemption of debentures;

ensure that the company does not commit any issue breach of debenture of the covenant trust deed or the terms and take such steps that are reasonable as may be necessary to remedy any breach such;

immediately inform the debenture holders of any breach of the terms of the issue of the debentures or the covenant trust deed;

ensure the implementation of the conditions regarding the security creation of the issue of debenture or the covenant trust deed;

ensure the implementation of the conditions regarding the security creation if any of the debentures and reserve the debenture redemption.

ensure that the assets of the company issuing debentures and of the guarantors, if any, are sufficient to the principle amount discharge at all the times and that such free assets from any other encumbrances except those which are specifically agreed to by the debenture holders;

do such acts as are important in the event of security becomes enforceable.

call for reports of the utilization of funds raised by issue of debentures;

take steps to convene a debentures meeting holders as and when required such meeting to be held;

Ensure that the debentures have been converted or redeem in accordance with the debentures terms issue;

perform such important act for the protection of debenture holders and do all other acts that are necessary in order to resolve the grievances of the debenture holders.

All the debenture holders meeting shall be convened by the debenture trustee on

writing requisition signed by debenture holders at least one-tenth holding in the values of debenture for time being outstanding.

Any event occurring, which constitutes a default, breach or which in the debenture trustee opinion affects the interest of the debenture holders.

The trustee of debenture provisions mentioned above shall not be needed to the public offer of the debentures

Debenture Redemption Reserve

The company shall create a Debenture Redemption Reserve for the debenture redemption purposes, in accordance with the conditions mentioned below-

the Debenture Redemption Reserve shall be created out of the profits of the company available for payment of dividend;

the company shall create redemption of debenture reserve equivalent to atleast the amount raised of fifty percent through the debenture issue before the redemption commences of debenture.

Every company required to create Debenture Redemption Reserve shall on or before the 30th April in each year, as may be the case invest or deposit, a sum that shall not be less than its debentures amount fifteen percent maturing during the March 31st ending year of next year, in any one or more of the following methods, namely:-

in deposits with any scheduled bank, free from any charge or lien;

The unencumbered securities of the central government mentioned in sub-clause (a) to (d) and (ee) of section 20 of the Indian Trusts Act, 1882;

in bond unencumbered provided by any other company that is notified under sub-clause (f) of section 20 of the Indian Trusts Act, 1882;

the amount invested or as deposited above shall not be used for any purpose other than for redemption maturing debentures during the year above referred

the remaining amount invested or deposited as may be the case, shall not at any time below fall fifteen percent of the debentures maturing amount during the ending year on that year of the 31st day of March;

in case of partly convertible debentures, debenture redemption reserve shall be created in accordance of non-convertible debenture portion issue in accordance with this sub-rule.

the amount credited to the redemption of debenture shall not be used by the company except for the purpose of debenture redemption.

Trust Deed debentures

A trust deed for safeguarding any issue of debentures shall be open for inspection to any member of the debenture holders of the company, int eh same manner to the extent which is same and on the payment of same fees, as if it were the company members register; and

A trust deed copy shall be forwarded to any company holder debenture or any member, at his request, within seven days thereof making, of fee on payment.

[NOMINATION [SECTION 72]

NOMINATION BY SECURITIES HOLDERS [RULE 19]

Any company security holders may, at any time, nominate, in FORM NO. SH.13, ad any person nominee in whom the securities shall vest in the event of his death.

On the receipt of nomination form, a corresponding entry shall be made forthwith in the relevant securities register holder, maintained under section 88.

Where made the nomination in respect of the held securities by more than one person jointly, all joint holders shall nominate together in Form No. SH.13 of any person nominee.

The request of nomination should be recorded by the company within period of two months from the date of receipt of the duly filled and signed the nomination form.

In the event of death of the securities holder or where securities are held by more than one person jointly, in the event of death of all the joint holders, the person who is nominated as the nominee may upon such production of evidence as may be needed by the board, elect, either–

to register himself as the holder of securities; or

to transfer the securities of the deceased holder could have done.

Being the person nominee, so becoming entitled, elects to be registered, as himself as the security holders, he shall deliver or send the company notice in writing signed bu him stating that he elects and such notice shall be accompanied with the certificate of death of the deceased share or debenture holder(s).

All the restrictions, the provisions of the Act and limitations relating to the right to transfer and transfers registration of securities to any such notice shall be applicable or transfer had not occur and notice and the transfer were signed transfer by that shareholder or debenture holder as may be the case.

A person, being a nominee, becoming entitled by reason to any securities or the death of holder shall entitled to the same dividends or interests or other advantages to which he would have been entitled to if he were the registered securities holder except that he shall not, as before a holder being registered in accordance of such securities, be entitled in accordance of these securities to exercise any right conferred by the membership in respect of the securities as may be the case, until the requirements of the notice have to be compiled with.