Securities and Exchange Board of India

Parag Basu
General Manager
Corporation Finance Department
Division of Issues and Listing
Phone: +91 22 2644 9360 Email: [email protected]

SEBI/CFD/DIL/LA/ 5/2008/4/09

September 4, 2008

The Managing Director/Executive Director/Administrator Of All Stock Exchanges

Dear Sirs,

Sub.: Amendments to Equity Listing Agreement

1. In order to bring more transparency and efficiency in the governance of a listed company, it has been decided to amend certain clauses in the Equity Listing Agreement. Accordingly, in exercise of the powers conferred under sub-section (1) of Section 11 of the Securities and Exchange Board of India Act, 1992, the Equity Listing Agreement is being amended to provide for the following:

2.  The full text of amendments is given in Annexure A and the brief amendments are as under:

(i) Clause 16 and 19: Notice period regarding Rights Issues

In order to reduce the time duration for a Rights Issue, SEBI has decided to amend the SEBI (DIP) guidelines and the Listing Agreement. The reduction in timelines would reduce the market risk faced by an issuer and ensure faster turnaround of money for investors. There are also certain amendments to bring homogeneity in the number of days for notice period and for record date in case of rights issue.

(ii)  Clause 24: “Fairness Opinion” of independent merchant banker

In order to safeguard the interest of shareholders, the listed company as well as the unlisted company which are getting merged shall each be required to appoint an independent merchant banker for giving a fairness opinion on the valuation done by valuers. Further, the “Fairness opinion” of the merchant bankers shall be made available to the shareholders at the time of approving the resolution under Clause 24.

(iii) Clause 41: Submission & Publication of Financial Results:

In order to bring more efficiency in the disclosures of financial results, it has been decided to modify Clause 41 of the listing agreement. The major modifications are as follows:

a. Time limit for submission of financial results to stock exchanges: A listed entity in addition to submitting quarterly and year to date standalone financial results within one month of end of the quarter may also submit consolidated financial results to the stock exchange within two months from the end of the quarter.

b. Publication of financial results: A listed entity opting to submit consolidated financial results in addition to standalone results to the stock exchanges shall publish consolidated financial results only.

c. Limited review report to be placed before Board of Directors: A listed entity would be required to place the limited review report on un-audited financial results before its board of directors / committee before submission to stock exchanges only if the variation (as defined in present Clause 41) between un-audited financials and financials amended pursuant to limited review for the same period exceeds 10%.

d. Submission of limited review report in case of last quarter: Where the listed entity chooses to submit un-audited financial results for the last quarter (instead of submitting audited financial results for the entire financial year within 3 months of end of financial year), the limited review report shall be submitted for the last quarter also.

3. Applicability:

Changes in Clauses 16, 19, 24 and 41 of the Equity Listing Agreement mentioned above would be applicable with immediate effect. However, with regard to Clause 41, the provisions under sub-clause (VI) item (b) relating to submission and publication of the financial results shall be applicable from the second quarter onwards for the current financial year.

4. This circular is available on SEBI website at under the categories “Legal Framework” and “Issues and Listing”.

Yours faithfully,

Parag Basu

Encl.: As above.

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