Statement of Deviation or Variation

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

Regulation 32

The listed entity shall submit to the stock exchange the following statement(s) on a quarterly basis for public issue, rights issue, preferential issue etc.
- 1. indicating deviations, if any, in the use of proceeds from the objects stated in the offer document or explanatory statement to the notice for the general meeting, as applicable.
  2. indicating category wise variation (capital expenditure, sales and marketing, working capital etc.) between projected utilization of funds made by it in its offer document or explanatory statement to the notice for the general meeting, as applicable and the actual utilization of funds.
    Note: As per Master Circular [SEBI/HO/CFD/PoD2/CIR/P/0155 dated: November 11, 20]
    :
    1. 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.
    2. A common format for such reporting will aid the monitoring of the end use of issue proceeds raised by listed entities through public issue, rights issue, preferential issue, QIP etc. by Stock Exchanges. Hence, for the purpose of compliance with regulations 32(1), 32(2) and 32(3) of the LODR Regulations, listed entities shall follow the format specified at Annexure 14 of the circular

The statement(s) specified in sub-regulation (1), 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.

The statement(s) specified in sub-regulation (1), shall be placed before the audit committee for review and after such review, shall be submitted to the stock exchange(s).

The listed entity shall furnish an explanation for the variation specified in sub-regulation(1), in the directors’ report in the annual report.

The listed entity shall prepare an annual statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice, certified by the statutory auditors of the listed entity, and place it before the audit committee till such time the full money raise through the issue has been fully utilized.

Where the listed entity has appointed a monitoring agency to monitor utilisation of proceeds of a public issue or rights issue or preferential issue or qualified institutions placement], the listed entity shall submit to the stock exchange(s) any comments or report received from the monitoring agency within forty-five days from the end of each quarter.

Where the listed entity has appointed a monitoring agency to monitor the utilisation of proceeds of a public issue or rights issue or preferential issue or qualified institutions placement], the monitoring report of such agency shall be placed before the audit committee on a quarterly basis, promptly upon its receipt.
Explanation,—For the purpose of sub-regulations (6) and (7), “monitoring agency” shall mean the monitoring agency as specified in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.
Where an entity has raised funds through preferential allotment or qualified institutions placement, the listed entity shall disclose every year, the utilization of such funds during that year in its Annual Report until such funds are fully utilized.

For the purpose of this regulation, any reference to “quarterly/quarter” in case of listed entity which have listed their specified securities on SME Exchange shall respectively be read as “half yearly/half year”.

As per the Master Circular [SEBI/HO/CFD/PoD2/CIR/P/0155 dated: November 11, 20]:
Listed entities to do Integrated Filing (Financials) with the Stock Exchange for Reg 23(9) -Disclosure of Related Party Transaction, Reg 30-Quarterly disclosure of outstanding default on loans / debt securities, Reg 32(1)-Statement of Deviation and Variation and Reg 33(3)-Financial results within 45 days of the end of the quarter & 60 days from end of the last quarter & financial year (Related party transactions must be disclosed to S.E. every six months on the date of publication of its standalone and consolidated financial results and posted on the company’s website. High-value debt listed entities must submit these disclosures with their half-year results

The salient features of the format (of integrated filing) are as under:

Applicability: The format shall be applicable for funds raised by listed entities through public issue, rights issue, preferential issue, QIPs etc.
Frequency of Disclosure: The disclosure to the Stock Exchange(s) shall be made by listed entities on quarterly basis along with the declaration of financial results (within 45 days of end of each quarter / 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.
Role of the Audit Committee: The statement of deviation report shall be placed before audit committee of the listed entity for review on quarterly basis and after such review, the comments of audit committee along with the report shall be disclosed/submitted to the stock exchange, as part of the format. In cases where the listed entity is not required to have an audit committee under the provisions of LODR Regulations or the Companies Act, 2013, the word ‘Audit Committee’ shall be replaced with ‘Board of Directors’
A NIL report shall be submitted by listed entities that do not have any deviation or variation in the funds raised

Penalty & Punishment

Rs. 5000/- per day (Reason for non-submission to be submitted)
Failure for non compliance for 2 consecutive quarters may lead to suspension of trading.

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