Posts

Immediate Actionables from the Quarter & Half Year ended September 30, 2021

Burhanuddin Dohadwala, Senior Manager | corplaw@vinodkothari.com     

Updated as on: October 06, 2021

SEBI recently notified several amendments that become effective on various dates.

In case of equity listed entities, SEBI vide Circular dated May 31, 2021[1] mandated disclosures around loans/ guarantees/comfort letters/ security provided by the listed entity, directly or indirectly to promoter/ promoter group entities or any other entity controlled by them, on a half yearly basis, in order to ensure greater transparency. The format has been prescribed as Annex IV to his requirement becomes effective from first half year of the FY 21-22. Accordingly, this will be required to be furnished for the first time while submitting the corporate governance report under Reg. 27 (2) of Listing Regulations for quarter and half year ended September 30, 2021.

Further, SEBI notified fifth amendment to the Listing Regulations[2] w.e.f. September 7, 2021 pursuant to which debt listed entities with outstanding principal amount of Rs. 500 crore and more as on March 31, 2021 were categorized as ‘High Value Debt Listed Entity’ and subjected to corporate governance requirement (Reg. 15 to 27 of Listing Regulations) on a ‘comply or explain basis’ till March 31, 2023.

In the aforementioned amendment, SEBI also amended compliance requirements applicable to all entities with listed non-convertible securities (i.e. NCDs, NCRPS)[3].

The table below provides immediate compliance requirement to be carried out post September 30, 2021 by an equity listed and non-convertible security listed entity.

Regulation No. Heading Particulars Timeline Due Date

Entities with listed specified securities

27(2) Corporate Governance Annex IV of SEBI Circular dated May 31, 2021 w.r.t Format of compliance report on Corporate Governance by Listed Entities Within 21 days on a half yearly basis

(commencing from September 30, 2021)

October 21, 2021

 High Value Debt Listed Entity (HVDLE)

27(2) Corporate Governance Annex I of SEBI Circular dated May 31, 2021 w.r.t Format of compliance report on Corporate Governance by Listed Entities

As per NSE & BSE Circular dated September 30 & October 01, 2021 respectively w.r.t Formats specifying disclosure of Corporate Governance by High value debt listed entities.

Within 21 days on a quarterly basis. October 21, 2021

 All entities with listed Non-Convertible Security 

52(1) Financial Results Listed entity shall prepare and submit un-audited/audited quarterly and year to year financial results to stock exchange.

Format: As per SEBI Circular dated October 05 w.r.t Revised Formats for filing Financial information for issuers of non-convertible securities.

 Note:

Intimation to stock exchange within thirty minutes of the closure of the meeting where the financial results are placed.

Within 45 days of end of Quarter (except for last quarter)

 

November 14, 2021
52(7) A  statement  indicating  the  utilization  of  issue  proceeds  of  non-convertible securities The listed entity to submit to the stock  exchange,  a  statement  indicating  the  utilization  of  issue  proceeds  of  non-convertible securities, which shall be continued to be given till such time the issue proceeds have been fully utilised or the purpose for which these proceeds were raised has been achieved. Within forty-five days from the end of every quarter November 14, 2021
52(7A) Material Deviation In case of any material deviation in the use of proceeds as compared to the objects of the issue, the same shall be indicated in the format as specified by the Board i.e. Jan 17, 2020.
57(4) Details  for  interest/dividend/principal obligations shall be payable during the quarter The  listed  entity to provide  details  for  all  the  non-convertible  securities  for  which  interest/dividend/principal obligations shall be payable during the quarter. Within five working days prior to the beginning of the quarter. September 24, 2021 to September 30, 2021
57(5) Confirming the payment along with the details of unpaid interest/dividend/principal obligation The listed entity to provide the following:

  • a certificate confirming the payment of interest/dividend/principal obligations for non-convertible securities which were due in that quarter; and
  • the  details  of  all  unpaid  interest/dividend/principal  obligations  in  relation  to  non-convertible securities at the end of the quarter.
Within 7 working days from the end of the quarter. October 11, 2021
Proviso to Reg. 61A(2) Dealing with unclaimed non-convertible securities and benefits accrued thereon Transfer to escrow account of unclaimed interest/ dividend and redemption amount, w.r.t. non-convertible securities, as on September 7, 2021 that is outstanding for less than 7 years. Within 30 days from September 07, 2021 October 07, 2021
61A(2) Transfer to escrow account of unclaimed interest/ dividend and redemption amount, w.r.t. non-convertible securities, remaining unclaimed for thirty days after due date (‘X’). X+30 days+7 days

 

[1] Read our write up at https://vinodkothari.com/2021/06/financial-transactions-with-promoter-entities-become-part-of-cg-disclosure/  and ppt at https://vinodkothari.com/2021/06/presentation-on-lodr-amendments/

[2] Refer snapshot of amendment at https://vinodkothari.com/2021/09/presentation-on-lodr-fifth-amendment-regulations-2021/ and write up at https://vinodkothari.com/2021/09/corporate-governance-enforced-on-debt-listed-entities/

[3] Refer ppt at https://vinodkothari.com/2021/09/presentation-corporate-governance-debt-listed-entities/

Refer FAQs at https://vinodkothari.com/2021/08/faqs-recent-amendments-listing-regulations/ ; https://vinodkothari.com/2021/09/faqs-corporate-governance-debt-listed-entities/

Our  Book on Law and Practice Relating to Corporate Bonds and Debentures, authored by Ms. Vinita Nair Dedhia, Senior Partner and Mr. Abhirup Ghosh, Partner can be ordered through the below link:
https://www.taxmann.com/bookstore/product/6330-law-and-practice-relating-to-debentures-and-corporate-bonds

Presentation on Corporate Governance for Debt Listed Entities

Our resources can be accessed through below links:

  1. FAQs on recent amendments under the Listing Regulations – https://vinodkothari.com/2021/08/faqs-recent-amendments-listing-regulations/
  2. Articles on fifth amendment regulations:
  3. Ease of doing business: Debt listed companies slide down to unlisted companies – https://vinodkothari.com/2021/02/debt-listed-companies-slide-down-unlisted-companies/ 

Our  Book on Law and Practice Relating to Corporate Bonds and Debentures, authored by Ms. Vinita Nair Dedhia, Senior Partner and Mr. Abhirup Ghosh, Partner can be ordered through the below link:
https://www.taxmann.com/bookstore/product/6330-law-and-practice-relating-to-debentures-and-corporate-bonds

FAQs on LODR amendment on ‘High Value’ debt listed entities

Our resources can be accessed through below links:

  1. FAQs on recent amendments under the Listing Regulations – https://vinodkothari.com/2021/08/faqs-recent-amendments-listing-regulations/
  2. Articles on fifth amendment regulations:
  3. Ease of doing business: Debt listed companies slide down to unlisted companies – https://vinodkothari.com/2021/02/debt-listed-companies-slide-down-unlisted-companies/ 

Our  Book on Law and Practice Relating to Corporate Bonds and Debentures, authored by Ms. Vinita Nair Dedhia, Senior Partner and Mr. Abhirup Ghosh, Partner can be ordered through the below link:
https://www.taxmann.com/bookstore/product/6330-law-and-practice-relating-to-debentures-and-corporate-bonds