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TMI BlogDuties of the debenture trusteesX X X X Extracts X X X X X X X X Extracts X X X X ..... ve quarter whichever is earlier; (d) communicate promptly to the debenture holders defaults, if any, with regard to payment of interest or redemption of debentures and action taken by the trustee therefor; (e) appoint a nominee director on the Board of the company in the event of: (i) two consecutive defaults in payment of interest to the debenture holders; or (ii) default in creation of security for debentures; or (iii) default in redemption of debentures. (f) ensure that the company does not commit any breach of the terms of issue of debentures or covenants of the trust deed 10 [ by monitoring the same in the manner specified by the Board ] and take such reasonable steps as may be necessary to remedy any such breach; (g) inform the debent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en issued and debenture certificate is to be issued after registration of charge, the debenture certificates have been dispatched by the body corporate to the debenture holders within 30 days of the registration of the charge with the Registrar of Companies; (ii) debenture certificates have been dispatched to the debenture holders or debentures have been credited in the demat accounts of the debenture holders in accordance with the provisions of the Securities and Exchange Board of India (Debenture Trustee) Regulations 1993, Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations 2008, Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and any other reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re trustee shall: (a) obtain reports from the lead bank regarding progress of the project; (b) monitor utilisation of funds raised in the issue; 3 [(c) obtain a certificate from the issuer's Statutory Auditor: (i) in respect of utilisation of funds during the implementation period of the project; and (ii) in the case of debentures issued for financing working capital, at the end of each accounting year.]] (2) A debenture trustee shall call or cause to be called by the body corporate a meeting of all the debenture holders on- (a) a requisition in writing signed by at least one-tenth of the debenture holders in value for the time being outstanding; (b) the happening of any event, which constitutes a default 8 [ or breach of covenants (as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance or that it has obtained the necessary consent from other charge-holders if the security has an existing charge, in the manner as may be specified by the Board from time to time. (7) Subject to the approval of the debenture holders and the conditions as may be specified by the Board from time to time, the debenture trustee, on behalf of the debenture holders, may enter into inter-creditor agreements provided under the framework specified by the Reserve Bank of India. ] ************* NOTES:- 1 Substituted ibid. Prior to the same, the provision read as follows: (1) It shall be the duty of every debenture trustee to- (a) call for periodical reports from the body corporate; (b) [***] (c) take possession of trust property in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept those which are specifically agreed to by the debenture trustee;] (i) exercise due diligence to ensure compliance by the body corporate, with the provisions of the Companies Act, the listing agreement of the stock exchange or the trust deed; (j) to take appropriate measures for protecting the interest of the debenture holders as soon as any breach of the trust deed or law comes to his notice; (k) to ascertain that the debentures have been converted or redeemed in accordance with the provisions and conditions under which they are offered to the debenture holders; (l) inform the Board immediately of any breach of trust deed or provision of any law; (m) appoint a nominee director on the Board of the body corporate in the event of: (i) two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here listed debt securities are secured by way of receivables/ book debts it shall obtain the following,- (i) On Quarterly basis- (a) Certificate from the Director / Managing Director of the issuer company certifying the value of the book debts / receivables; (b) Certificate from an independent chartered accountant giving the value of book debts / receivables. (ii) On Yearly basis- (a) Certificate from the statutory auditor giving the value of book debts / receivables.] 8. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/34 dated 08-10-2020 9. Inserted vide Notification No. SEBI/LAD-NRO/GN/2020/34 dated 08-10-2020 10. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/78 dated 11-04-2022 11. Substituted vide Notification No. SEBI/LAD-NR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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