SEBI issues a circular on 07th August 2019 on Disclosure of reasons for encumbrance by Promoters of Listed Companies to to bring greater transparency regarding reasons for encumbrance, particularly when significant shareholding by promoter along with persons acting in concert (PACs) with him is encumbered. The provisions of this circular shall come into effect from October 01, 2019. Circular can be accessed at the following link-Disclosure of reasons for encumbrance by promoter of listed companies
Article explains the above Circular in Pictorial form for easy understanding of readers-
Format of disclosure of reason for encumbrance i.e Annexure II
Annexure – II
Format for disclosure of reasons for encumbrance
(In addition to Annexure – I prescribed by way of circular dated August 05, 2015)
| Name of listed company | |
| Name of the recognised stock exchanges where the shares of the company are listed | |
| Name of the promoter(s) / PACs whose shares have been encumbered | |
| Total promoter shareholding in the listed company | No. of shares —
% of total share capital – |
| Encumbered shares as a % of promoter shareholding | |
| Whether encumbered share is 50% or more of promoter shareholding | YES / NO |
| Whether encumbered share is 20% or more of total share capital | YES / NO |
Details of all the existing events/ agreements pertaining to encumbrance
| Encumbrance 1 (Date of creation of encumbrance: ______) | Encumbrance 2 (Add columns for each event/ agreement) |
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| Type of encumbrance (pledge, lien, negative lien, non-disposal undertaking etc. or any other covenant, transaction, condition or arrangement in the nature of encumbrance) | |||
| No. and % of shares encumbered | No. of shares:
% of total share capital: |
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| Specific details about the encumbrance | Name of the entity in whose favour shares encumbered (X) | ||
| Whether the entity X is a scheduled commercial bank, public financial institution, NBFC or housing finance company? If No, provide the nature of the business of the entity. | YES/ NO | ||
| Names of all other entities in the agreement | Listed company and its group companies (if any)
1. 2. ……. Other entities (if any) — 1. |
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| Whether the encumbrance is relating to any debt instruments viz. debenture, commercial paper, certificate of deposit etc.? If yes, provide details about the instrument, including credit rating | YES / NO If yes, 1. Name of the issuer 2. Details of the debt instrument |
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