The stock market regulator Securities and Exchange Board of India (Sebi) on Monday notified amendments to the equity listing agreement, which were decided at its November board meeting. According to these amendments, all listed companies are required to disclose their audited annual results on a standalone as well as on a consolidated basis within 60 days from the end of the financial year. Earlier it was 90 days. This in effect, means all listed companies will have to submit the recently-concluded financial year?s results by May 31, 2010 itself.
It is applicable to those companies which opt to submit their annual audited results instead of the last quarter?s un-audited financial results with limited review. Further, the regulator has also asked listed firms to disclose their quarterly financial results within 45 days of the end of every quarter. Listed companies have been further asked to publish the turnover, profit before tax and profit after tax on a stand-alone basis.
These measures have been taken to streamline the submission of financial results by listed entities and uniformity in reporting, while reducing the timeline for submission of the same with the stock exchanges.
With a view to have more frequent disclosure of the asset-liability position of the companies, the regulator has asked listed companies to disclose a statement of assets and liabilities in the specified format within forty-five days from the end of the half-year, as a note to their half-yearly financial results. At present, shareholders have access to the statement of assets and liabilities of the listed entity and its solvency position only on an annual basis. ?In the wake of the recent global financial crisis, the issue of solvency has come to the forefront from the shareholders? perspective,? said the Sebi circular.
?Half-yearly disclosure of asset liability position is clearly intended to prevent Satyam-like scams,? said the head of a leading domestic brokerage. He said such disclosures will bring down chances of manipulation and will ensure good amount of accountability on the part of corporates and auditors.
In order to ensure more checks and balances in the books of accounts, the regulator said: ?In respect of all listed entities, limited review and 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? of the said Institute,?.
In order to familiarise listed entities with IFRS requirements, it has been decided to provide an option for listed entities having subsidiaries to submit their consolidated financial results either in accordance with the accounting standards of the Companies Act, 1956 or in accordance with IFRS. Also, to ensure that the CFO has adequate accounting and financial management expertise, the appointment of the CFO has been asked to be approved by the Audit Committee. In regard to the scheme of merger and acquisitions, the listed entities have been asked to submit to the stock exchange, an auditors? certificate to the effect that the accounting treatment contained in such schemes is in compliance with accounting Standards.