SEBI Eases Compliance Norms On Consolidated Results For Banks, Insurance Companies

Markets regulator SEBI on Tuesday gave relaxation to listed banks and insurance companies for publishing consolidated financial results for June quarter in the wake of coronavirus pandemic.

In addition, it has extended the exemption given to listed companies from publication of advertisement in newspapers about their board meetings, financial results and other events till June 30, SEBI said in a circular.

Earlier, the exemption was given till May 15.

In view of the continuing lockdown and the resultant bottlenecks relating to print versions of newspapers... exemptions from publication of advertisements in newspapers are extended for all events scheduled till June 30, 2020, the regulator noted.

Also, SEBI has eased compliance norms pertaining to requirement of sending physical copies of annual reports to shareholders; proxy forms for general meeting and dividend warrants or cheques.

Listed entities which are banking and/or insurance companies or having subsidiaries which are banking and/or insurance companies may submit consolidated financial results for the quarter ending June 30, 2020 on a voluntary basis, SEBI said.

However, they shall continue to submit the standalone financial results, it added.

If such listed entities choose to publish only standalone financial results and not consolidated financial results, they need to give reasons for the same, it noted.

This comes after the regulator received representations from listed entities that are banks or insurance companies highlighting the challenges in preparing consolidated financial results in view of different accounting standards being followed by companies belonging to same group and the difficulties in restating those financials as per IND-AS due to the prevailing circumstances in view of Covid- 19.

Under the Listing Obligations and Disclosure Requirements, in case a listed entity has subsidiaries, such entity needs to submit quarterly/year-to-date consolidated financial results.

The Companies Indian Accounting Standards Rules stipulate the adoption and applicability of Ind-AS in a phased manner beginning from financial year 2016-17.

Currently, Ind-AS is applicable to all listed entities with the exception of those in the banking and insurance sectors. RBI and IRDA have not yet notified the date of implementation of Ind-AS for banks and insurance companies, respectively.

With regard to requirement of sending physical copies of annual reports to shareholders, SEBI has dispensed with this norm for listed entities who conduct their AGMs during calendar year 2020 (till Dec. 31, 2020).

The norms require listed entity to send proxy forms to holders of securities in all cases mentioning that a holder may vote either for or against a resolution.

The requirement ... is dispensed with temporarily, in case of meetings held through electronic mode only. This relaxation is available for listed entities who conduct their AGMs through electronic mode during the calendar year 2020, SEBI said.

SEBI has also eased compliance requirement related to dividend warrants or cheques.

The norms prescribe issuance of 'payable-at-par' warrants or cheques in case it is not possible to use electronic modes of payment. Further, in case the amount payable as dividend exceeds Rs 1,500 the 'payable-at-par' warrants or cheques shall be sent by speed postage.

SEBI said the requirements of this regulation will apply upon normalization of postal services. However, in cases where e-mail addresses of shareholders are available, listed entities would have to endeavour to obtain their bank account details and use the electronic modes of payment.

This circular would come into force with immediate effect, the regulator noted.