SEBI amends Clause 41 of the Listing Agreement

Securities and Exchange Board of India (SEBI) vide Circular dated July 10, 2007, has directed all stock exchanges to replace the existing Clause 41 of the Equity Listing Agreement with a revised clause which aims to rationalize 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 unaudited results are furnished, the same are required to be followed with a Limited Review Report. This is with a view to enable investors to know the performance of listed companies as early as possible.

The revised clause has also simplified provision for explanation in variation between items of unaudited and audited quarterly/ year to date / annual results. The revised clause requires that explanation for variation be furnished in respect of Net Profit or Loss After Tax and for exceptional / extraordinary items. The percentage of variation for the purpose is revised from “20% or more” to “10% or Rs.10 Lakhs, whichever is higher”.

As regards the publication of financial results, companies having subsidiaries who file both stand-alone and consolidated results to the stock exchange will now have an option to publish stand-alone 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.

SEBI amends Disclosure and Investor Protection (DIP) guidelines




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