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TMI BlogScheme(s) of Arrangement by entities who have listed their Non-convertible Debt securities (NCDs)/ Non-convertible Redeemable Preference shares (NCRPS)X X X X Extracts X X X X X X X X Extracts X X X X ..... me of arrangement shall file the draft scheme with Stock Exchange(s) for obtaining the No-Objection Letter, before filing such scheme with any court or Tribunal. Regulation 94 of the Listing Regulations requires the designated Stock Exchange to forward such draft schemes to SEBI in 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d entity shall submit the following documents to the Stock Exchange(s): (a) Draft scheme of arrangement/ amalgamation/ merger/ reconstruction, etc. (b) Valuation Report as per Para (5) below, accompanied by an undertaking from the listed entity stating that no material event impacting the valuation has occurred during the intervening period of filing the scheme documents with the 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to submit a valuation report from a Registered Valuer. In case of scheme of arrangement between listed and unlisted entities, the listed entity is required to submit a valuation report on behalf of unlisted entity, from a Registered Valuer. For the purpose of this clause, the Registered Valuer shall be a person, registered as a valuer, having such qualifications and experience and being a member of an organization recognized, as specified in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents specified under para (2) above on its website simultaneously while filing it with the Stock Exchange(s). 9.2. The listed entity shall also disclose the No-Objection Letter of the Stock Exchange(s) on its website within 24 hours of receiving the same. 10. Notice or proposal sent to the holders of NCDs/ NCRPS for seeking approval of scheme 10.1. The listed entity shall send by email/ speed post (where e-mail is not available), the No-Objection 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The Stock Exchange(s) shall provide the No-Objection Letter to SEBI on the draft scheme of arrangement in co-ordination with each other in terms of Regulation 94A of the Listing Regulations within seven working days from the date of receipt of satisfactory reply from an expert/ entity if any, on clarifications, sought by Stock Exchange(s), as applicable. The Stock Exchanges shall ensure that the maximum number of days taken for providing the No-Objection Letter to SEBI shall not exceed thirty days from the 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 Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrangement. This shall provide details of the authorized, issued, subscribed and paid up capital (Number of instruments, description, and aggregate nominal value); (e) Debt structure - pre and post scheme of arrangement. This shall provide for details such as face value, coupon, tenure, no. of NCDs/ NCRPS issued etc. (f) Name and details of Promoters - educational qualifications, experience, address; (g) Name and details of board of directors (experience including current / past position held in other firms); (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and circulars issued thereunder and 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 submission to the .. (name of the Stock Exchange(s)). This Certificate should not be used for any other purpose without our prior written consent. For .. (name of the Firm) Chartered Accountants Firm Registration No.: Signature (Name of the member) Designation (Partner or proprietor, as may be applicable): Membership Number: Place: Date: Annex-III ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, including the following: Sr. No. Particulars Whether complied (YES/NO) Remarks 1 Regulation 11 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 - Compliance with securities laws 2 Submission of Valuation Report 3 Submission of Fairness opinion 4 Submission of documents to Stock Exchange(s) 5 Disclosures in the Scheme of Arrangement 6 Provision of approval of holders of NCDs/ NCRPS through e-voting 7 Grievance redress/ Report on Complaints/ Comments 8 Conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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