Amendment in various clauses of Equity Listing Agreement

In order to march one ahead SEBI made appropriate changes in equity listing agreement. 

The key amendments relate to the following:

(i) Listed entities having subsidiaries have been given an option to submit their consolidated financial results either in accordance with the accounting standards specified in section 211(3C) of the Companies Act, 1956, or in accordance with IFRS. This amendment is applicable with immediate effect.

(ii) While submitting the scheme of amalgamation/merger/reconstruction, etc. to the stock exchanges under clause 24(f) of the Equity Listing Agreement, the listed entities shall also submit to the concerned stock exchange, an auditors’ certificate to the effect that the accounting treatment contained in such schemes is in compliance with all applicable accounting standards. This requirement is applicable to all schemes of listed entities that are being filed before the Hon’ble Courts/Tribunals on or after the date of this circular.

(iii) Timelines for submission and publication of financial results by the listed entities have been streamlined. Listed entities shall disclose, on standalone or consolidated basis, their quarterly (audited or un-audited with limited review), financial results within 45 days of the end of every quarter. Also, audited annual results on stand-alone as well as consolidated basis, shall be disclosed within 60 days from the end of the financial year for those entities which opt to submit their annual audited results in lieu of the last quarter unaudited financial results with limited review. The revised timelines are applicable with immediate effect.

(iv) In respect of all listed entities, limited review/statutory audit reports submitted to the concerned stock exchanges shall be given only by those auditors who have subjected themselves to the peer review process of ICAI and who hold a valid certificate issued by the ‘Peer Review Board’. This requirement shall be applicable to all financial statements submitted by listed entities to the stock exchanges after appointment of auditors for accounting periods commencing on or after 01 April 2010.

(v) Listed entities shall disclose within forty-five days from the end of the half-year, as a note to their half-yearly financial results, a statement of assets and liabilities in the specified format. This amendment is applicable with immediate effect.

(vi) Appointment of the CFO shall be approved by the Audit Committee before finalization of the same by the management. The audit committee, while approving the appointment, shall assess the qualifications, experience & background etc. of the candidate. This amendment is applicable with immediate effect.

(vi) The formats of limited review report and statutory auditor’s report have been modified to make it clear that disclosures pertaining to details of public shareholding and promoters’ shareholding, including details of pledged/encumbered shares of promoters/promoter group, contained in the format have been traced from disclosures made by the management.

Following is the tabuler format discloses the appropriate changes in various clauses/subclauses of Listing Agreement

SL. NO	CLAUSES	AMENDMENT OF CIRCULAR
1	Clause 24 (i)	Company while filing for approval with the Stock Exchange any draft scheme of amalgamation / merger / reconstruction, etc under Clause 24(f) is required to file with the Stock Exchange an Auditors’ Certificate that the accounting treatment contained in the scheme of amalgamation is in compliance with the Accounting Standards specified by ICAI. Effective Date: 5th April 2010.
2	Clause 41 (I)(c)	Companies have an option to submit audited or un-audited quarterly and year to date financial results within 45 days of the end of each quarter instead of 1 month of the end of each quarter. [The above clause is for results to be submitted for other than last quarter]
3	Clause 41 (I) (c)	For Companies which opt to submit un-audited financial results, the copy of the Limited Review report should be furnished to Stock Exchange within 45 days from the end of the quarter instead of 2 months earlier. [The above clause is for results to be submitted for other than last quarter]
4	Clause 41 I (d)	In respect of the last quarter, Companies have an option to submit un-audited financial results for the quarter within 45 days of the end of the Financial Year OR if the Company decides to submit audited financial results for the entire Financial Year it should do so within 60 days of the end of the Financial Year
5	Clause 41 I (d)	The Limited Review Report in respect of the last quarter should be furnished to the Stock Exchange within 45 days of the end of the Financial Year
6	Clause 41 I (e) (i)	In case of a Company having subsidiaries, it may in addition to submitting quarterly and y-t-d stand alone financial results to the Stock Exchange within 45 days from the end of the quarter, also submit quarterly and year to date consolidated financial results within 45 days from the end of the quarter
7	Clause 41 I (e) (ii)	For a Company having subsidiaries, it should submit the annual audited consolidated financial results along with the annual audited stand alone financial results within 60 days from the end of the Financial Year to the Stock Exchange
8	Clause 41 I (ea) & (eaa)	A Statement of Assets & Liabilities as at the end of the half-year should be disclosed within 45 days from the end of the half-year to the Stock Exchange. The said information should be disclosed as a part of the audited or un-audited financial results for the half-year to the Stock Exchange so as to keep the shareholders informed about the solvency position of the Company
9	Clause 41 I (g)	If the Company has subsidiaries, it may opt to submit consolidated financial results as per IFRS
10	Clause 41 I (h)	Company to ensure that the Limited Review / Audit Reports is given by an Auditor who has subjected himself to the peer review process of the ICAI and holds a valid certificate issued by the Peer Review Board of the ICAI. Effective Date: For appointment of Auditors after 1st April 2010.
11	Clause 41 V (g)	Disclosure of Balance Sheet items as per Cl 41 I (eaa) to be in the format specified in Annexure IX drawn from the Schedule VI of the Companies Act, 1956
12	Clause 41 VI (b)	Disclosure of Consolidated financial results along with the following items on a stand alone basis as a foot note (a) Turnover (b) Profit before Tax (c) Profit after tax instead of only consolidated financial results
13	Clause 41 VI (b) (iv)	Companies that are required to prepare consolidated financial results for the first time at the end of the Financial Year should exercise the option mentioned in Cl. 41 VI (b) in respect of the quarter during the Financial Year in which they first acquire the subsidiary
14	Annexure V to Clause 41 – Limited Review Report for Companies other than Banks	Disclosures regarding “Public Shareholding” and “Promoter & Promoter Group Shareholding” which have been traced from the disclosures made by the management and have not been audited by us inserted
15	Annexure VI to Clause 41 – Limited Review Report for Banks	Same as point 14 above.
16	Annexure VII & VIII  (both parts)	Except for the disclosures regarding ‘Public Shareholding’ and ‘Promoter & Promoter Group Shareholding’ which have been traced from the disclosures made by the management and have not been audited by us inserted after the words pursuant to the requirement of Clause 41 of the Listing Agreement
17	Annexure IX	Statement of Assets & Liabilities introduced
18	Clause 49 II D (12A)	Audit Committee to approve the appointment of CFO - Approval of the appointment of CFO after assessing the qualifications, experience and background of the candidate.