Sebi issues format for statement of deviation

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Markets regulator Sebi on Tuesday issued a format for statement of deviation in funds raised to be submitted by the listed entities to stock exchanges on a quarterly basis. The format comes after Sebi noted that there is no uniformity in the formats of statement of deviation or variation in proceeds of public issue, rights issue, preferential issue submitted by the listed entities to the stock exchanges.

"Hence, there is a need to introduce a common format for such reporting," Sebi said in a circular. The first such submission will be made by the listed entities for the quarter ending December 31, 2019, it added.

"The format shall be applicable for funds raised by listed entities through public issue, rights issue, preferential issue, QIPs etc," Sebi said.

The statement of deviation report will be placed before audit committee of the firm for review on quarterly basis and after that the comments of the committee along with the report will be submitted to stock exchanges.

For the entities not having an audit committee, the report needs to be placed before the board of directors.

Sebi said that entities will make disclosures on quarterly basis along with the declaration of financial results within 45 days of end of each quarter or 60 days from the end of the last quarter of the financial year, until such funds are fully utilised or the purpose for which these proceeds were raised has been achieved.

In accordance with listing obligations and disclosure requirements (LODR) norms, entities are required to submit a statement of deviation or variation to stock exchanges after a review by the audit committee on a quarterly basis.

Such statements indicate deviations, if any, in the use of proceeds of public issue, rights issue, preferential issue and category wise variation between projected utilisation of funds and the actual utilisation of funds.

The statement of deviation or variation is to be submitted till the issue proceeds have been fully utilised or the purpose for which these proceeds were raised has been achieved. In a separate circular, Sebi amended the disclosure requirements for commercial papers.

It said, if an issuer is required to prepare consolidated financial results of its parent company, such issuers shall submit financial results in accordance with norms provided by Sebi or submit quarterly consolidated financial of the parent company.

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