The Securities and Exchange Board of India (Sebi) has put out the proposed changes to ‘Clause 41’ for public comments for a period of 15 days. Last amendment to the clause — that deals with the equity listing agreement — mandated companies to disclose detailed results in a month from the end of the quarter.
Sebi circular proposes to extend the timeline to two months from the current one month (from the end of the quarter) for the companies opting to submit consolidated financial results to stock exchanges in addition to standalone financial results.
In case of companies that wish to publish only consolidated results, it is proposed that they include standalone figures of turnover, net profit after tax (NPAT) and earnings per share (EPS) as well. Similarly, companies opting to publish only standalone figures may have to mention where consolidated figures will be available.
“It's a good step taken by the regulator. While this brings more flexibility to the system, it also gives more information to an investor,” said Anil Malik, company secretary, Hindalco Industries.
In view of practical difficulties encountered in placing the limited review report on un-audited quarterly financial results before the board of directors, before submitting it to the stock exchanges, companies may be required to do so only if the variation between un-audited figures and those after the review is 10 per cent or more. It is also proposed to clearly mention in Clause 41 (I) (C) that companies have to submit limited review reports in all the four quarters.
In the case of banks, it is proposed that the term ‘turnover’ shall mean total income as calculated in the format for banks’ results.
An amendment in Clause 41 (IV) (I) proposes making disclosures about dividend paid, or recommended, to be published at quarterly intervals rather than annually.
Further, companies opting to publish only consolidated results shall give a reference in the public domain as to where standalone profits of unlisted subsidiary companies are available for perusal.