Sebi for changes in revised Clause 41 of listing pact

With a view to bringing further transparency, capital market regulator Securities and Exchange Board of India (Sebi) has proposed several changes in the Clause 41 of the listing agreement. These changes have come into force since July 10, 2007.

The regulator has proposed that the existing timeline may be extended from one month to two months, from the end of each quarter, for companies that opt to submit consolidated financial results to the stock exchanges in addition to the standalone financial results.

In a discussion paper floated on its website, Sebi said following the July 10, 2007, circular of the revised Clause 41 of the listing agreement coming into effect, it received various opinions from various quarters suggesting amendments or seeking clarifications to certain provisions of the revised Clause 41. These suggestions were placed before the Sebi committee on Disclosures and Accounting Standards (SCODA). After taking into account SCODA?s view, it has further proposed changes in Clause 41 of the listing agreement.

Sebi had earlier said in a circular that a company should publish standalone figures for the turnover, net profit after tax and earning per share along with the existing requirement. Presently, the regulatory provision says that if a company publishes only consolidated results, then it must give reference in a newspaper to the company?s and stock exchange?s website where the standalone results will be available.

Secondly, if a company opts to publish only standalone results, then it should also give reference in newspapers about where the consolidated financial results will be available.

The regulator has mandated that the limited review report needs to be placed before the board again if variation between the unaudited financials amended pursuant to limited review for the same period exceeds more than 10%.

Currently, a company has to place the limited review report on unaudited quarterly financial results before its board of directors or the committee thereof, prior to submitting the same to the stock exchange.