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Entities that are formed under the provisions of the Companies Act 2013 or previous company law have to disclose their financial results annually. Under the companies act, companies are required to disclose and furnish their annual returns, file respective taxes, director’s report and compliance with specific provisions. Financial Results under SEBI regulations is compulsory for listed entities.
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Companies that have their securities listed in a stock exchange have to comply with the rules laid down by the Securities Regulator. The primary regulatory authority for listing of securities in the stock exchange is the Securities Exchange Board of India (SEBI). The regulations that apply to governance of securities in a stock exchange is the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
Regulation 33 speaks about Financial Results under SEBI regulations. All listed companies have to follow definite protocols for disclosing financial results under these regulations. For disclosing financial statements, specific timelines have been allocated by the regulator.
Financial results under SEBI regulations would be applicable to the following:
These financial results under SEBI regulations are supposed to be submitted between 45 to 60 days from the end of the quarter of the financial year. Annual Financial results have to be submitted 60 days from the end of the financial year. Listed companies have to comply with the timelines allocated by the regulator.
In case the entity submits financial statements which are not audited as per the requirement of the authority, then such statements would be subject to limited review by the statutory auditor. The statutory auditor would have to submit a limited review final report. In case, the financial statements are submitted by a public company, then the review or audit will be conducted by a practising chartered accountant. Where the listed company submits audited financial results, then the statutory auditor will provide an audit report.
For the annual audit report a statement regarding the audit is required. The statement would be the opinion on the audit. The listed entity will submit the audit report to the stock exchange. If the audit report has an opinion which is not modified, then the company must submit a declaration to the stock exchange. This declaration must be submitted when the listed entity is publishing the annual audit report. Financial Results under SEBI regulations would be applicable to the above.
Financial results under SEBI regulations would be applicable to all entities. When a listed entity has a subsidiary, then financial results of the subsidiaries also have to be submitted along with the financial statements. The financial results of subsidiaries are known as consolidated financial results. Previously, there were ambiguities regarding the submission of financial statements of subsidiaries of listed entities. These ambiguities were applicable where the company has associates and joint ventures.
To overcome, these ambiguities the SEBI came out with a circular no LIST/COMP/30/2019-20 that listed entities with subsidiaries/ associate or joint venture companies have to submit consolidated financial results. However, these consolidated financial results must be submitted with the stand alone financial results of the company.
Any listed entity must follow the guidelines before publishing financial results under SEBI. The following are certain considerations which are required to be followed by a listed entity:
Before publishing or disclosing Financial Results under SEBI, every listed company must keep in mind the above points to follow effective compliance.
Also, Read: NSE Listing Process in India.
Regulation 47 deals with the aspect of a listed entity publishing its financial results in Newspaper advertisements.
The following is stated in the regulation:
Schedule IV talks about the disclosures made for financial results under SEBI regulations. The following disclosures have to be made for financial results under SEBI regulations:
Therefore a listed entity has to disclose along with financial results under SEBI Regulations.
Regulation 33 speaks about filing of financial results under SEBI regulations. These results are filed in the XBRL Mode. This must be done within 24 hours of putting up the results in PDF format. It is mandatory for a listed company to submit financial results in the below mode. Submitting financial results in any other mode would attract penalties under the Listing regulations.
A company registered under the companies act has to file certain statements and disclosures as per the requirement of the Ministry of Corporate Affairs (MCA) and the Registrar of Companies (ROC). Similarly, a listed company has to submit its financial results under SEBI regulations. The company has to file these disclosures within the allocated time. Before filing financial results in print and electronic media, prior approval from the board of directors is required. The financial results have to be either unaudited or audited. Non compliance with the above would attract severe penalties.
Read, Also: Why is it important to know about the Regulatory Framework of Listed Companies.
Varun Hariharan has completed the Legal Practice Course from BPP Law School, Manchester. He has a Masters in Commercial and Corporate Law from the Queen Mary University of London and LLB Honours from Bangor University, UK. He specialises in law related to corporate, artificial intelligence and technology law.
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