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Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) - SEBI - SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2022/156

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..... the manner prescribed by SEBI. 3. It is pertinent to note that Regulation 11 of the Listing Regulations, inter-alia, provides 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 the Stock Exchanges. 4. This circular contains the operational aspects with reference to scheme(s) of arrangement by entities who have listed their NCDs/ NCRPS. The details of the requirements to be complied with are given in Annex-I. 5. Applicability: Chapter XV of the Companies Act, 2013 deals with compromises, arrangements and amalgamations by companies. This circular is applicable to all listed entities that have listed NCDs/ NCRPS and intend to undertake or are involved in a scheme of arrangement as per Chapter XV of the Companies Act, 2013. The provisions of this circular shall be applicable with immediate effect. 6. An entity that has listed only NCDs/ NCRPS, shall file the draft scheme of arrangement in terms of Regulation 59A alongwith fees as specified in Clause 2 of Schedule XI of the Listing Regulations. 7. In ca .....

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Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) - SEBI

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..... e Stock Exchange(s) and period under consideration for valuation. (c) Fairness opinion on the valuation of assets done by a registered valuer for the entities involved in the scheme of arrangement from a SEBI registered Merchant Banker. (d) Report from the board of directors of the listed entity recommending the draft scheme, taking into consideration, inter-alia, the Valuation Report and ensuring that the scheme is not detrimental to the holders of the NCDs/ NCRPS. This report shall also comment on the following: (i) Impact of the scheme on the holders of NCDs/ NCRPS. (ii) Safeguards for the protection of holders of NCDs/ NCRPS. (iii) Exit offer to the dissenting holders of NCDs/ NCRPS, if any. (e) Audited financials for the last 3 years (financials not being more than 6 months old) of unlisted entity; (f) Auditor’s Certificate in the format specified in Annex-II as per Para (6) below; (g) Detailed Compliance Report as per the format specified in Annex-V duly certified by the Company Secretary, Chief Financial Officer and the Managing Director, confirming compliance with various regulatory requirements specified for scheme of arrangement and all accounting standards. (h) Dec .....

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Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) - SEBI

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..... Section 247 of the Companies Act, 2013 read with the applicable Rules issued thereunder. 6. Auditor’s certificate 6.1. An auditor’s certificate shall be filed certifying the payment/ repayment capability of the resultant entity. This certificate shall also certify that the accounting treatment contained in the scheme is in compliance with all the Accounting Standards specified by the Central Government under Section 133 of the Companies Act, 2013 read with the rules framed thereunder or the Accounting Standards issued by ICAI, as applicable, and other generally accepted accounting principles. Provided that in case of companies where the regulatory authorities of the respective sector have prescribed norms for accounting treatment of items in the financial statements contained in the scheme, the requirements of such regulatory authorities shall prevail. Explanation - For this purpose, where the accounting treatment referred above do not comply with the accounting standards, the company shall disclose, the reasons for such deviations and the financial effects, if any, arising out of such deviation. Further, mere disclosure of deviations in accounting treatments as prescr .....

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Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) - SEBI

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..... jection Letter of the Stock Exchange(s), to the holders of NCDs/ NCRPS seeking approval for the Scheme. 10.2. The listed entity shall ensure that in the notice or proposal, it shall disclose pre and post-arrangement details in respect of the following: (a) Expected debt structure; and (b) Fairness opinion obtained in terms of para 2(c) mentioned above. 10.3. The listed entity shall upload the Report on Complaints/ Comments received by the listed entity on the draft scheme of arrangement as provided in Para 7 and the Compliance Report as provided in Para 2(g) above, on the company’s website and websites of Stock Exchange(s). 11. Disclosures in the draft scheme of Arrangement: The listed entity shall disclose the following information in the draft scheme of arrangement including but not limited to:- (a) Face Value (b) Dividend/Coupon: The terms of payment of dividends/ coupon including frequency, etc. (c) Credit Rating (d) Tenure/ Maturity (e) Redemption: The terms of redemption, amount, date, redemption premium/discount, and early redemption scenarios, if any. (f) Safeguards for the protection of holders of NCDs/ NCRPS (g) Exit offer to the dissenting holders of NCDs/ NCRPS, i .....

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Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) - SEBI

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..... he date of receipt of the draft scheme of arrangement. 3. The ‘Report on Complaints/ Comments’ received on the draft scheme of arrangement in the format specified at Annex-III to this Circular shall be forwarded by the Stock Exchange(s) to SEBI immediately on receipt. 4. The ‘Report on the unpaid dues/ fines/ penalties’ shall be forwarded by the Stock Exchange(s) to SEBI along with the draft scheme as per the format specified at Annex-IV. 5. The Stock Exchange(s), shall issue ‘No-Objection’ Letter to the listed entity within seven days of the receipt of comments from SEBI, after suitably incorporating such comments in the No-Objection Letter. 6. The Stock Exchange(s), where the NCDs/ NCRPS are listed/ proposed to be listed shall also disclose on their websites, the documents listed at para A(2) above immediately on receipt. They shall also disclose the No-Objection Letter on their websites immediately upon issuance. C. Processing of the Draft Scheme by SEBI 1. Upon receipt of the ‘No-Objection’ Letter from the Stock Exchange(s), SEBI shall provide comments on the draft scheme of arrangement to the Stock Exchange(s). While processing t .....

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Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) - SEBI

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..... (h) Business Model / Business Overview and Strategy; (i) Rationale for scheme of arrangement/ amalgamation/ merger/ reconstruction etc. (j) Latest restated audited financials along with notes to accounts and any audit qualifications. (Financial statements should not be later than six months prior to the date of listing); (k) Outstanding material litigations and defaults of the transferee entity, promoters, directors or any of the group companies; (l) Regulatory Action, if any - disciplinary action taken by SEBI or Stock Exchange(s) against the Promoters in last five financial years; (m) Brief details of outstanding criminal proceedings against the Promoters; (n) Any material development after the date of the balance sheet; and (o) Such other information as may be specified by SEBI from time to time. Any misstatement or furnishing of false information with regard to the said information shall make the listed entity liable for punitive action as per the provisions of applicable laws and regulations. Annex-II Format of Auditor's Certificate To, The board of Directors, ……………………………………& .....

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Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) - SEBI

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..... all the applicable Accounting Standards notified by the Central Government under the Companies Act, 2013 and/or the accounting treatment in respect of ………………………. (specify the financial statement item(s)) as prescribed by ………………………………. (name of the regulator) vide its Notification …………………………. (details of the Notification) which prevail over the accounting treatment for the same as prescribed under the aforesaid Accounting Standards (wherever applicable), except the following: ……………………………… ………………………………. This Certificate is issued at the request of the ……………………………. (name of the Company) pursuant to the requirements of circulars issued under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for onward submissi .....

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Scheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS) - SEBI

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