The Hindu : Business : SEBI simplifies listing norms

Online edition of India's National Newspaper
Wednesday, Jul 11, 2007
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Business

SEBI simplifies listing norms

Special Correspondent

Amends Disclosure and Investor Protection guidelines

Options for companies to furnish standalone
or consolidated financial results
Promoters’ contribution, lock-in requirements
not applicable to government companies

MUMBAI: The Securities and Exchange Board of India (SEBI) has directed all stock exchanges to replace the existing Clause 41 of the Equity Listing Agreement with a revised one, which aims to rationalise and modify the process and formats for submission of financial results to the stock exchanges.

The revised clause also contains other modifications aimed at improving the presentation of the sub-clauses.

Among the modifications, the revised clause requires listed companies to furnish either unaudited or audited quarterly and year to date financial results to the stock exchange within one month from the end of each quarter. Where the unaudited results are furnished, the same are required to be followed with a limited review report. This is with a view to enabling investors to know the performance of listed companies as early as possible.

The revised clause has also simplified the provision for explanation in variation between items of unaudited and audited quarterly, year to date and annual results.

The revised clause requires that explanation for variation be furnished in respect of net profit or loss after tax and for exceptional and extraordinary items.

The percentage of variation for the purpose is revised from ‘20 per cent or more’ to ‘10 per cent or Rs. 10 lakh’, whichever is higher.

As regards the publication of financial results, companies having subsidiaries, which file both standalone and consolidated results to the stock exchange, will now have an option to publish standalone or consolidated results, subject to the condition that a choice once exercised cannot be changed during the year.

In case the company changes its option in any subsequent financial year, it would be required to furnish comparative figures for the previous financial year in accordance with the option exercised for the current year.

The Securities and Exchange Board of India also amended its Disclosure and Investor Protection guidelines to enable government companies, statutory authorities and any special purpose vehicle set up by any of them, which are engaged in the infrastructure sector, to raise funds in the Indian primary market through Initial Public Offerings (IPOs).

Among them, the clauses requiring promoters’ contribution and the minimum holding requirement of pre-issue capital would not be applicable to government companies, statutory authorities and or special purpose vehicles set up by them, which are engaged in infrastructure sector.

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