[To be published in the Gazette of India, Extraordinary, Partsection (i)l

MINISTRY OF CORPORATE AFFAIRS

NOTIFICATION

New Delhi, the 16th August, 2019

G.S.R.-(E)- In exercise of the powers conferred by sub-sections (1) and (2) of

section 469 of the Companies Act, 2013 (18 of 2013), the Central Government

hereby makes the following rules further to amend 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 OfficialGazette.

2. In the Companies (Share Capital and Debentures) Rules, 2014, in rule 4

(hereinafter referred to as the principal 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 seventy four per cent. of total voting power including voting

power in respect of equity shares with differential rights 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.

?II,

-1-

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 the Department of Industrial Policy and

Promotion" the letters, figures, brackets and words "G.S.R. 127(E), dated

19 ' February, 2019 issued by the Department for Promotion of industry

and Internal Trade" shall be substituted. ;

(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 31't day of March 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 of dividend;

(b) the limits with respect to adequacy of Debenture Redemption Reserve and

investment or deposits, as the casc may be, shall be as under;-

(i) Debenture Redemption Reserve is not required for debentures issued by All

India Financial Institutions regulated by Rescrve Bank of India and Banking

Companies for both public as well as privately placed debentures;

(ii) For other Financial Institutions within the meaning of clause (72) of section 2

of the Companies Act, 2013, Debenture Redemption Reserve shall be as

applicable to Non -Banking Finance Companies registered with Reserve Bank of

India.

(iii) For listed companies (other than All India Financial Institutions and Banking

Companies as specified in sub-clause (i)), Debenture Redemption Reserve is

not required in the following cases -

(A) in case of public issue of debentures -A. for NBFCs registered with Rescrve 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 listcd companics;-2-

(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 lnstitutions and

Banking Companies as specified in sub-clause (i)) -

(A) for NBFCs registered with RBI under section 45-IA of the Reserve Bank

of India Act, 1934 and for Housing Finance Companies registered with

National Housing Bank, Debenture Redemption Reserve is not required in

case of privately placed debentures.

(B) for other unlisted companies, the adequacy of Debenture Redemption

Reserve shall be ten percent. 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) or item (B) of sub-clause (iv) of clause (b), it shall on or before

the 30th day of April in each year, in respect of debentures issued by a

company covered in item (A) or item (B) of sub-clause (iii) of clause (b) or

item (B) of sub-clause (iv) of clause (b), invest or deposit, as the case may

be, a sum which shall not be less than fifteen per cent., of the amount of its

debentures maturing during the year, ending on the 3l't day of March of the

next year in any 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 time fall below fifteen percent. of the amount of the

debentures maturing during the year ending on 31sr day of March of that year.

(vi) for the purpose of sub-clause (v), the

investments, as the case may be, are as follows: -

(A) in deposits with any scheduled bank, free(B) in unencumbered securities of the Central

methods of deposits or

from any charge or lien;

Government or any State

Government;

(C) in unencumbered securities mentioned in sub-clause (a) to (d) and

(ee) of section 20 of the Indian Trusts Act, 1882;-3-

(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 :

Provided that the amount invested or deDosited as above shall not

be used for any purpose other 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 of non-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 for the purpose of redemption of debentures."

lF. No. 0 l/0a{20 | 3-CL-V- Part-llll

lrnl ----\l"]u. . -1r7v1fiK.V.R. Murty. Joint Se-cietary '

Note:- The principal rules were published in the Gazette of India, Exhaordinary, Part II,Section 3, Sub-section (i) tride notification number G.S.R. 265(E), dated 31d March, 2014 andwhich was last amended vide Notification no. GSR 434(E) dated 7.05.2018.

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