SEBI issues format for indicating Deviation or Variation in the use of proceeds of issue of non-convertible debt securities or NCRPs of listed entities; first submission to be made for half year ended 31.3.2020

In a Notification dated 17th January, 2020, the Securities and Exchange Board of India (“SEBI”) has released a format for filing a statement indicating deviation or variation by listed entities in the use of proceeds of issue of non-convertible debt securities or non-convertible redeemable preference shares (“NCRPs”) which are listed on the stock exchange.

The Format is given in Annexure A of the Circular.

 

Key takeaways from the Circular are mentioned below:

 

  1. Applicability: The Format prescribes is applicable for funds raised by listed entities through issuance of non-convertible debt securities or NCRPs.

  1. Frequency of Disclosure: The statement of deviation or variation must be submitted on a half yearly basis within 45 days of end of the half year until the funds have been fully utilized or the purpose for which these funds were raised have been achieved.

  1. Role of Audit Committee: The statement indicating the deviation and variation must be first presented before the Audit Committee of the listed entity for review on half yearly basis.

After the Audit Committee has reviewed the statement, along with the comments of the audit committee, the statement will be filed with the stock exchange along with the format given in Annexure A.

In case the listed entity is not required to have an Audit Committee, the review will be done by the Board of Directors.

Please note that first submission in the format given in Annexure A must be made by the listed entities for the half year ended March 31, 2020.

Background:

Under the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI LODR Regulations’), a listed entity is required to submit a statement of deviation or variation to the Stock Exchange pursuant to review by the Audit Committee on a quarterly basis for public issue, rights issue, preferential issue etc.

Previously, in a Circular dated 24th December 2019 SEBI had  laid down the format for submitting the Statement of Deviation or Variation for listed entities whose specified securities are listed. Now a similar format has been issued for listed entities which have listed its non-convertible debt securities or NCRPs on the stock exchange.

Source : Securities and Exchange Board of India

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