Sebi Makes Compliance With A/C Standards Compulsory

The Securities and Exchange Board of India (Sebi) has made it mandatory for all companies to comply with the accounting standards issued by the Institute of Chartered Accountants of India including those on segment reporting and consolidated financial statements.

Sebi has decided to amend Clause 41 and Clause 32 of the listing agreement besides adding a new clause 50 which would enhance the level of disclosure of listed companies, according to a statement by ICAI today.

As per the amendment made to Clause 11, companies would be required to furnish segment-wise revenue, capital employed along with the quarterly unaudited financial results commencing from September 30, 2001. The information should be furnished for each of the reportable primary segments like revenue, assets and liabilities as defined in the Accounting Standard 17 for segment reporting.

The companies would, however, have the option to publish consolidated quarterly financial results in addition to the unaudited quarterly results of the parent company as currently required under the Clause 41 of the listing agreement.

The amendments made to Clause 32 make it mandatory for the companies to publish consolidated financial statements in the annual report in addition to the individual financial statements. Audit of the CFS by statutory auditors of the company and filing of audited statements with the stock exchanges have also been made compulsory. The companies are also required to make disclosures in compliance with the accounting standards on related party disclosures in the annual reports.