Amendments to Equity Listing Agreement
CIRCULAR NO. SEBI/CFD/DIL/LA/4/2007/27/12, DATED
27-12-2007
1.0 In order to bring more transparency in the governance
of a listed company with regard to utilisation of issue proceeds and to enhance
availability of and accessibility to the continuing disclosures by listed
companies, it has been decided to amend Equity Listing Agreement to provide for
the following:
2.0
Monitoring of utilisation of Issue Proceeds:
2.1
As per SEBI (Disclosure and Investor Protector) (DIP) Guidelines, 2000, every
issuer company making a public or rights issue of more than Rs. 500 crores is
required to appoint an agency to monitor the utilisation of issue proceeds.
SEBI has, vide circular dated November 29, 2007 amending the SEBI (DIP)
Guidelines, mandated that a monitoring agency shall henceforth be required to
file its report with the issuer company instead of with SEBI.
2.2
Presently, clause 49 of Equity Listing Agreement requires the Audit Committee
of an issuer company to monitor the utilisation of issue proceeds and to make
appropriate recommendations to the Board of the issuer company. It is therefore
felt that even where a monitoring agency has been appointed, the report
submitted by such agency may be placed before the Audit Committee of the issuer
company, so as to enable the Audit Committee to make appropriate recommendations
to the Board of the issuer company.
Accordingly,
it has been decided to amend clause 49 of Equity Listing Agreement, requiring the
issuer company to place the monitoring report filed with it before its Audit Committee.
2.3
Further, every issuer company shall be required to inform material deviations
in the utilisation of issue proceeds to the stock exchange and shall also be
required to simultaneously make the material deviations / adverse comments of
the Audit committee / monitoring agency public through advertisement in
newspapers.
3.0
Electronic filing through Corporate Filing and Dissemination System (CFDS),
viz., www.corpfiling.co.in
3.1
SEBI had, vide circular no. SMD/POLICY/Cir-13/02 dated June 20, 2002,
introduced a clause in Equity Listing Agreement, which inter-alia mandated
electronic filing of certain corporate information through the Electronic Data Information
Filing and Retrieval (EDIFAR) system hosted by the National Informatics Centre
on behalf of SEBI. It has been decided to phase out EDIFAR gradually in view of
a new portal, viz., CFDS put in place jointly by BSE and NSE at the URL www.corpfiling.co.in. CFDS offers a XBRL enabled
common platform for listed companies to file their returns with stock exchanges
and also a common place for investors to view information related to listed
companies.
3.2
Accordingly, it has been decided to introduce a new clause viz., Clause 52 in
Equity Listing Agreement, requiring listed companies to file information with
the stock exchange only through CFDS. Over period, other modes of sending
public information to stock Exchanges for compliance with clauses of Equity
Listing Agreement shall be dispensed with. The companies, which are mandated to
file information through CFDS or have been registered on CFDS on their own volition
though not so mandated, need not file information through the EDIFAR system.
The companies which have commenced filing through CFDS shall continue to do so through
CFDS only.
3.3
BSE and NSE (Participating Stock Exchanges), which jointly own and maintain
CFDS, shall, in a phased manner, ensure that CFDS is made available to all
listed companies for their corporate filings, irrespective of the stock
exchange on which the companies are listed. Participating Stock Exchanges shall
shortlist companies, based on market capitalization and disseminate and publish
the said list from time to time and make it available on the website of the Exchanges
as well as on CFDS at the URL www.corpfiling.co.in.
4.0
Accordingly, new clauses 43A and 52 shall be inserted in Equity Listing
Agreement and existing clauses 49 and 51 of Equity Listing Agreement shall be
amended as detailed in the Annexure I.
5.0
All stock exchanges are advised to:
5.1
Give effect to the above mentioned policy amendments and appropriately amend
the relevant clauses of Equity Listing Agreement in line with the text of the
amendments specified in Annexure I.
5.2
Make consequential changes in other clauses of Equity Listing Agreement.
5.3
Communicate to SEBI the status of implementation of the requirements of this
circular in the next Monthly Development Report.
6.0
Applicability:
All
Stock Exchanges shall ensure that:
6.1
Clause 52 shall be applicable to all those companies whose names shall be
specified by the Participating Stock Exchanges from time to time. The first 100
companies identified by the Participating Stock Exchanges, a list of which is
available on the websites of the Participating Stock Exchanges, shall make all
their submissions through CFDS from the period starting from January 1, 2008.
Initially, these companies shall be required to make their submissions to the
respective stock exchanges through CFDS, in addition to the modes provided in
Equity Listing Agreement, i.e., through fax/courier, etc.
6.2
Users are requested to give their feedback on the CFDS at cfdsfeedback@nse.co.in and corp.relations@bseindia.com so as to improve the efficiency
and effectiveness of the portal.
6.3
All other amendments to Equity Listing Agreement shall come into force with
effect from the date of amendment.
7.0
This circular is issued in exercise of powers conferred by subsection (1) of
Section 11, read with sub-section (2) of Section 11A, of the Securities and
Exchange Board of India Act, 1992, to protect the interests of investors in
securities and to promote the development of, and to regulate the securities
market.
8.0
This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal
Framework” and “Issues and Listing”.
1.
After clause 43, the following clause shall be inserted, namely:-
“43A. Statement of
deviations in use of issue proceeds
(1) The company agrees to
furnish to the stock exchange on a quarterly basis, a statement indicating
material deviations, if any, in the use of proceeds of a public or rights issue
from the objects stated in the offer document.
(2) Where the company
has appointed a monitoring agency to monitor utilisation of proceeds of a
public or rights issue and such monitoring agency has pointed out any deviation
in the use of the proceeds of the issue from the objects stated in the offer
document or has given any other reservations about the end use of funds, the
company agrees to intimate the same to the stock exchange, without any delay.
(3) The information
mentioned in sub-clause (1) shall be furnished to the stock exchange along with
the interim or annual financial results submitted under clause 41 and shall be
published in the newspapers simultaneously with the interim or annual financial
results, after placing it before the Audit Committee in terms of clause 49.
(4) The information
mentioned in sub-clause (2) shall, after review by the Audit Committee, be
furnished to the stock exchange as and when received and shall simultaneously be
published in the newspapers.”
2.
In clause 49 –
(a)
in sub-clause (II)(D), after item (5), the following new item shall be
inserted, namely:-
“5A. Reviewing, with the
management, the statement of uses / application of funds raised through an
issue (public issue, rights issue, preferential issue, etc.), the statement of
funds utilized for purposes other than those stated in the offer
document/prospectus/notice and the report submitted by the monitoring agency
monitoring the utilisation of proceeds of a public or rights issue, and making
appropriate recommendations to the Board to take up steps in this matter.”
(b)
in sub-clause (IV)(D), after the words “statutory auditors of the company” and
before the words “The audit committee shall make appropriate recommendations”,
the following shall be inserted, namely:-
“Furthermore, where the company
has appointed a monitoring agency to monitor the utilisation of proceeds of a public
or rights issue, it shall place before the Audit Committee the monitoring
report of such agency, upon receipt, without any delay.”
3.
In clause 51, after sub-clause (3), the following sub-clause shall be inserted,
namely:-
“(4) Notwithstanding
anything in sub-clauses (1), (2) and (3), the company need not file on the
EDIFAR website, any information, statement or report which has already been filed
on the Corporate Filing and Dissemination System in pursuance of clause 52.”
4.
After clause 51, the following clause shall be inserted, namely:-
“52. Corporate Filing and
Dissemination System (CFDS), viz., www.corpfiling.co.in
(1) The company
agrees -
(a) to file on the
CDFS, such information, statements and reports as may be specified by the
Participating Stock Exchanges in this regard.
(b) that the
Compliance Officer, appointed under clause 47(a) and the company shall be
responsible for ensuring the correctness, authenticity and comprehensiveness of
the information, statements and reports filed under this clause and also for ensuring
that such information is in conformity with the applicable laws and the listing
agreement.”
(c) to ensure that
the electronic filing of information through CFDS, pursuant to compliance with
any clause of the listing agreement, shall be done within the time limit
specified in the respective clause of the listing agreement.
(d) to put in place
such infrastructure as may be required to comply with the clause.
Explanation: For the
purposes of this clause –
(i) The term
“Corporate Filing and Dissemination System (CFDS)” shall mean the portal at the
URL www.corpfiling.co.in
or such other
website as may be specified by the participating stock exchanges from time to
time to take care of exigencies, if any.
(ii) The term “Participating Stock Exchanges” shall
mean the stock exchanges owning and maintaining CFDS.”