Sebi Scripts Definition Of Material Events For Cos

Sebi has suggested amendments to the listing agreement between stock exchanges and companies in accordance with the recommendations of the C B Bhave panel on continuing disclosure standards.

Sebi has stated that all such events which will have bearing on the performance or operations of the company as well as the price sensitive information should be informed to the stock exchange.

Amendments shall be effective for all the listed companies from the quarter ending June 1998 and the maximum period for publishing the above results by the companies shall be one month from the end of the quarter. Audited results can be published within two months form the end of the last quarter of the fin year.

Material events would include change in the character or nature of business. This means the issuer will promptly notify the exchange of any change in the nature of business through arrangements for technical, manufacturing, marketing or financial tie-up. This would also include any move by the issuer to sell or dispose or agree to sell or dispose of any unit or division.

The issuer will also inform the exchange about details of the damage caused to the unit and furnish to the exchange an estimate of the loss in revenue or production arising therefrom and steps taken to normalise the situation. The issuer will also inform the exchange about the commencement of the commercial operations of any unit or division where revenue from that unit for a full year of production or operations is estimated to be not less than ten per cent of the revenues of the issuer for the year.

There is a need to also disclose the impact on the financials of the company due to policy or regulatory changes announced by the government, litigation or dispute with a material impact, and revision in ratings.

Any other information having bearing on the operation /performance of the company as well as price sensitive information which includes but not restricted to; issue of any class of securities, acquisition, merger, demerger, amalgamation, restructuring, scheme of rearrangement, spinoff of divisions of the company etc; change in the market lot of the companies shares, sub division of equity shares of company; voluntary delisting by the company from the stock exchanges; forfeiture of shares; any action which will result alteration in the terms regarding redemption /cancellation retirement in whole or in part of any securities issued by the company; information regarding opening, closing of status of ADR, GDR or any other class of securities to be issued abroad; cancellation of rights or dividend or bonus should be made public immediately.