SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, A Wing, Gr. Floor,
224, Nariman Point, Mumbai 400 021
SMD-II/POLICY/CIR – 08/2000
February 04, 2000

To,

Presidents/Executive Directors/Managing Directors
Of Stock Exchanges.

Dear Sir/Madam,

Sub : Amendments to the Listing Agreement

The SEBI Board in its meeting held on January 25, 2000 considered the recommendations of the Accounting Standards Committee relating to continuous disclosure requirements of the listed companies and has decided to make the following amendments to the listing agreement.

Amendment to Clause 32 (Cash Flow Statement)

Stock Exchanges were advised to amend Clause 32 of the Listing Agreement, vide our circular no. SMD-I(N)/JJ/2331/95 dated June 26, 1995,to provide that listed companies shall give a Cash Flow statement in the Annual Report and the following addition was made to the Clause 32 :

“The company will also give a Cash Flow Statement along with the Balance Sheet and Profit and Loss Account. The Cash Flow Statement will be prepared in accordance with the Annexure attached hereto”.

With a view to harmonise the disclosure requirements under the Listing Agreement and the Accounting Standard issued by Institute of Chartered Accountants of India (ICAI), it has been decided that the Cash Flow Statement being disclosed in terms of Listing Agreement shall henceforth be prepared in accordance with the Accounting Standard on Cash Flow Statement (AS-3) issued by ICAI and the relevant portion of the Clause 32 shall be amended as follows :

“The Cash Flow Statement will be prepared in accordance with the Accounting Standard on Cash Flow Statement (AS-3) issued by the Institute of Chartered Accountants of India, and the Cash Flow Statement shall be presented only under the Indirect Method as given in AS-3”.
Amendment to Clause 41 (Unaudited Financial Quarterly Results)
Certain additional disclosures shall be made in the unaudited financial quarterly results of the companies and the half yearly results shall be subjected to a Limited Review by the Auditors with effect from half year ending on March 31, 2000. It has also been decided that :

companies may be permitted to consider unaudited quarterly results in the meeting of a Sub-Committee of the Board of Directors consisting of not less than one-third of the total number of Directors
the notice period required for intimation to the stock exchanges of Board or its Sub-Committee meetings for consideration of financial results shall be reduced from 15 days to 7 days.
companies shall be required to announce the financial results after the Market Hours on the date of the Board Meeting or meeting of a Sub-Committee of Board of Directors.
Accordingly, Clause 41 of the Listing Agreement shall be amended as per the Annexure.

Amendment to Clause 19 (Declaration of Dividend/Rights and Bonus etc.)
Clause 19 of the Listing Agreement shall be amended to give effect to the following decisions of the Board :

Prior intimation about the Board Meeting at which declaration of dividend is due to be considered must be made at least 7 days in advance.
The company shall give notice simultaneously to the stock exchanges in case the proposal for declaration of bonus is communicated to the Board of Directors of the company as part of the agenda papers.
No prior intimation is required about the Board Meeting in case the declaration of Bonus by the company is not on the agenda of the Board Meeting.
Amendment to Clauses 20 and 22 (Announcements after the Board Meetings)
Under Clauses 20 and 22 of the Listing Agreement companies are required to intimate to the stock exchange, immediately after the meeting of Board of Directors, regarding the decisions taken in respect of declaration of dividend or rights or bonus etc.. In order to avoid excessive volatility in stock prices due to announcement regarding dividend, rights etc., during the Market Hours, it has been decided that such announcement shall be made immediately on the date of the Board Meeting only after the close of the Market Hours. Clauses 20 and 22 of the Listing Agreement shall be amended, accordingly.Disclosure on the Web Site of the Exchanges.

It has also been decided that information furnished by the companies under continuous disclosure requirements, as specified in the Listing Agreement, shall be published on the web site of the exchange instantly and stock exchanges are advised to make immediate arrangement for display of the information furnished by the companies instantly on the web site.

Yours faithfully,
M D PATEL
EXECUTIVE DIRECTOR
SECONDARY MARKET DEPARTMENT –II

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