CLR Note: The Ministry of Corporate Affairs has issued a notification dated 6th November 2015 amending Rule 18 of Companies (Share Capital and Debentures) Rules,2014. The relevant notification is reproduced below:
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Government of India
Ministry of Corporate Affairs
Notification
New Delhi, 6th November, 2015
G.S.R.- ln exercise of the powers conferred by sub-sections (l) and (2) of section 469 of the Companies Act, 2013 (18 of 201 3), the Central Government hereby makes the following rules further to amend the Companies (Share Capital and Debentures) Rules,2014, namely:-
1. (I) These rules may be called the Companies (Share Capital and Debentures) Third Amendment Rules, 2015.
(2) They shall come into force from the date of their publication in the Official Gazette.
2. ln the Companies (Share Capital and Debentures) Rules, 2014,
(i) In rule 18,-
(a)ln sub-rule (l), in clause (a) for sub-clause (iii) following sub-clauses shall be substituted, namely:-
“(iii) Infrastructure Debt Fund Non-Banking financial Companies, as defined in clause (b) of direction 3 of Infrastructure Debt fund Non-Banking Financial Companies (Reserve Bank) Directions, 2011;
(iv) Companies permitted by a Ministry or Department of the Central Government or by Reserve Bank of India or by the National Housing Bank or by any other statutory authority to issue debentures for a period exceeding ten years.
[F.No. 1/4/2013 CL-V]
AMARDEEP SINCH BHATIA. JI. Secy
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CLR Note: The amended extract of Rule 18 is as follows:
Rule 18. Debentures.”(1) The company shall not issue secured debentures, unless it complies with the following conditions, namely:”
(a) An issue of secured debentures may be made, provided the date of its redemption shall not exceed ten years from the date of issue:
Provided that the following classes of companies may issue secured debentures for a period exceeding ten years but not exceeding thirty years,
(i) Companies engaged in setting up of infrastructure projects;
(ii) ˜Infrastructure Finance Companies™ as defined in clause (viia) of sub-direction (1) of direction 2 of Non-Banking Financial (Non-deposit accepting or holding) Companies Prudential Norms (Reserve Bank) Directions, 2007;
(iii) Infrastructure Debt Fund Non-Banking financial Companies, as defined in clause (b) of direction 3 of Infrastructure Debt fund Non-Banking Financial Companies (Reserve Bank) Directions, 2011;
(iv) Companies permitted by a Ministry or Department of the Central Government or by Reserve Bank of lndia or by the National Housing Bank or by any other statutory authority to issue debentures for a period exceeding ten years
(b) such an issue of debentures shall be secured by the creation of a charge, on the properties or assets of the company, having a value which is sufficient for the due repayment of the amount of debentures and interest thereon;
(c) the company shall appoint a debenture trustee before the issue of prospectus or letter of offer for subscription of its debentures and not later than sixty days after the allotment of the debentures, execute a debenture trust deed to protect the interest of the debenture holders; and
(d) the security for the debentures by way of a charge or mortgage shall be created in favour of the debenture trustee on.
