IntroductionThe listing of securities is ensured by way of

an agreement called Listing Agreement which is entered between a stock exchange and the issuing company.

The listing rules and regulations have been designed to safeguard the interests of investors and to ensure transparency through disclosures, proper supervision and control over the dealings in the conduct of listed companies in India.

Listing Agreement is of great importance as it provides all the terms & conditions to be complied by the company whose securities are listed on the stock exchange.

Clause 41- Unaudited Quarterly Financial ResultsAll the listed Companies w. e.f. March, 2000 are

required to furnish the details of profit earned/ loss incurred on quarterly basis in the prescribed proforma to the stock exchange.

The basic purpose of clause 41 is:

to ensure transparency by bringing the adequate information on corporate financial performance in public domain .

to provide a platform to the investors to take a well-informed decision.

Preparation & Submission of Financial Results The financial results filed and published in

compliance with this clause shall be prepared on the basis of accrual accounting policy .

The quarterly and year to date results shall be prepared in accordance with the recognition and measurement principles laid down in Accounting Standard 25 (AS 25 – Interim Financial Reporting) issued by the Institute of Chartered Accountants of India (ICAI) / Company (Accounting Standards) Rules, 2006, whichever is applicable.

Disclosure Requirements Submission of Quarterly, year to date and annual financial results to the

Stock Exchange.

In respect of first 3 Quarters: the Company has an option either to submit audited or unaudited Quarterly financials within 45 days from the end of the Quarter:

in case the Company opts to submit unaudited financials results, they shall be subjected to Limited Review Report from the Statutory Auditors of the Company.

in case the Company opts to submit audited financial results, they shall be accompanied by the audit report.

Disclosure Requirements In respect of last quarter, the Company is required to submit audited

financial results within 60 days from the end of the Quarter.

As a part of its audited or unaudited financial results for the half-year, the company shall also submit by way of a note, a statement of assets and liabilities as at the end of the half-year.

If the company has changed its name suggesting any new line of

business, it shall disclose the net sales or income, expenditure and net profit or loss after tax figures pertaining to the said new line of business separately in the financial results and shall continue to make such disclosures for the three years succeeding the date of change in name.

Disclosure Requirements If the Company has subsidiaries (first three quarters):

it may, in addition to submitting quarterly and year to date stand alone financial results to the stock exchange within forty-five days of the end of the quarter, also submit quarterly and year to date consolidated financial results within forty-five days from the end of the quarter.

 

Disclosure Requirements If the Company has subsidiaries (last quarter):

while submitting annual audited financial results prepared on

stand-alone basis it shall also submit annual audited consolidated financial results to the stock exchange within sixty days from the end of the financial year.

In case the company has subsidiaries and it opts to submit consolidated financial results, it may submit the consolidated financials as per IFRS

 

Other Requirements of Clause 41

Inform Stock Exchange- specifying the date of Board Meeting

Issue of Press Release- National Newspaper and Regional Newspaper

At least 7 working days prior to the date of Meeting

Furnish Quarterly Unaudited along with Limited Review Report/ Audited Financial Results along with Auditors Report.

Unaudited Results: within 45 days from the end of the Quarter.

Audited Results: within 60 days from the end of the Quarter

Outcome of Board meeting Within 15 minutes of the closure of the Board Meeting

Publish Results in national & Regional Newspaper

Within 48 hours from the closure of the Board meeting

Provisions of Clause 41: Recent amendments

S. No.

Particulars Erstwhile Provisions

Amendment

1. Time limit for submission of Unaudited Financial Results : Under Clause 41 (I) (c) the  company has an option either to submit audited or unaudited quarterly and year to date standalone financial results to the stock exchange within one month of the end of each quarter (other than the last quarter).Under Clause 41 (I) (e) company having subsidiaries has an option to submit consolidated financial results in addition to standalone financial results to the stock exchange(s)

Within 30 days from the end of Quarter

Within 45 days from the end of the Quarter

2. Time period for submission of Limited Review Report :Under clause 41 (I) (c) (i) the Company is required to submit Limited Review Report if the Company opts to submit unaudited financial results in respect of first 3 Quarters .

No time period prescribed

Within 45 days from the end of the Quarter along with financial results .

3. Limited Review Report need not be placed before Board again if the variation does not exceed 10% or more:Under Clause 41 (II) (d) a company has to place the limited review report on un-audited quarterly financial results before its Board of directors or the committee thereof (other than the audit committee).

The company has to place the limited review report on un-audited quarterly financial results before its Board of directors or the committee thereof (other than the audit committee), prior to  submitting the same to the stock exchange.

The company has to place the limited review report on un-audited quarterly financial results before its Board of directors or the committee thereof (other than the audit committee) where the variation between un-audited financials and financials amended pursuant to limited review for the same period, exceeds 10%.

4. Disclosure of quarterly financial results:

 In order to give a better comparative picture of the quarterly financial results, companies are required to disclose figures in respect of immediately preceding quarter as well in addition to the existing requirements and are required to submit the results of the last quarter along with the audited annual results.

5. Option to submit audited or unaudited financial results (Clause 41 (i) (d))

In respect of last Quarter, the Company has an option to submit unaudited quarterly financial results.

In respect of last Quarter, the Company is required to submit audited financial results for the entire financial year

Clause 41 (I) (d) Clause 41 (I) (eaa)

As per clause 41(I) (d), The company shall submit audited financial results for the entire financial year, within sixty days of the end of the financial year. The company shall also submit the audited financial results in respect of the last quarter along with the results for the entire financial year, with a note that the figures of last quarter are the balancing figures between audited figures in respect of the full financial year and the published year to date figures up to the third quarter of the current financial year.

As per clause 41(I) (eaa), when a company opts to submit un-audited financial results for the last quarter of the financial year, it shall, submit a statement of assets and liabilities as at the end of the financial year only along with the audited financial results for the entire financial year, as soon as they are approved by the Board.

 

Reporting Formats The Listing Agreement has specific formats for furnishing the Quarterly Results:

Separate formats for disclosure of Quarterly results by the Listed Companies and Banks.

Format for publishing Annual Audit Results.

Format for Segment Reporting

Review Report- Separately for Banks

Audit Report- Separately for Banks

Manner of approval and authentication of the financial results

Unaudited Quarterly Results:

Shall be approved by the Board of Directors or Committee thereof If approved by the Committee the results shall be placed before the Board at its next

meeting CEO/CFO shall certify- financial results do not contain any false or misleading statement

and do not omit any material fact. Subject to Limited Review by the Auditors. Signing of the Financial Results by the Managing Director/ Chairman/ Whole Time Director/

any other authorized Director.

Corporate Professionals Capital Pvt. LtdSEBI Registered Category I Merchant Banker

D-28, South Extension -I,New Delhi-110 049

Ph: +91.11.40622200; FAX: +91.11.40622201Contact: Anjali Aggarwal

Mobile: + 91 9971673336; Tel: +91.11.40622230Email: anjali@indiacp.com

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