Additional Disclosures by listed entities under SEBI (Issue and Listing of Municipal Debt Securities) Regulations, 2015

The Securities and Exchange Board of India in its circular dated 13^th November 2019, has amended its earlier circular dated 19^th June 2019, on continuous disclosures and compliance norms which are to be followed by the entities whose municipal debt securities are listed or are proposed to be listed on the recognized stock exchanges.

SEBI has decided to substitute certain clause of the earlier circular as under:

1. Clause 2.1- Disclosure of financial information
   • The listed entities shall submit their half yearly un-audited financial results to the stock exchanges within 45 days of the end of the first half of the year
   • Annual audited financial results shall be submitted within 60 days from the end of the financial year.
   • First level Audit report shall be submitted within 60 days from the end of the financial year by the CAG.
   • Final annual audited financial results shall be submitted Within 9 months from the end of the financial year only if audited by CAG and approved by the Standing Committee and/or the Governing Body or Board of Directors of the listed entities.
   • Listed entities shall submit a certificate of Status of payment of interest or principal or both Within 5 working days
2. The listed entity shall comply with the following while preparing and submitting The half yearly un-audited financial results and annual audited financial results:
   • Shall contain comparative information for the immediately preceding corresponding half year or financial year respectively.
   • Shall be taken on record by Standing Committee or General Body or Board of Directors or Board of Trustees that are being submitted to the stock exchange/s
   • Debt equity ratio, debt service coverage ratio, interest service coverage ratio should be disclosed in the results
3. Further SEBI has mentioned a list of points which an annual report of the listed entity must contain
4. Any material changes that could adversely affect the ability to service debt securities should be informed to the stock exchanges
5. Credit Rating shall be reviewed at least once a year. Any change in the rating should be immediately disclosed to the stock exchanges If the rating is downgraded by two or more notches. The reasons for downgrade along with the steps to be taken to recover the rating must be disclosed by the entity.
6. Escrow Payment Mechanism: For the purpose of payment obligation, following escrow accounts to be created by the entity
   • No lien escrow account
   • Interest payment account
   • Sinking fund account
   • General Account

All the above accounts except “General account”shall  be monitored by  the debenture trustee and the balances in the accounts need to be disclosed within 45 days from the end of the quarter.

7.The listed  entities may  invest the  issue  proceeds in Government  Securities  or Treasury Bills or Fixed deposit with Scheduled commercial bank or liquid mutual fund or gift  fund or  debt  mutual  funds  or  debt  ETFs with  a  lien  in  favour  of the debenture trustee pending utilization of funds for the stated objects.

8.Utilization of funds for projects and status of implementation of projects: Along with half yearly financial results, a report containing status of implementation of project(s), reasons for delay if any and amount of utilizations of issue proceeds for execution of the projects must be submitted.

Click here to read the Circular