Listed cos to provide annual information memorandum: SEBI

AIM will provide shareholders and prospective shareholders with accurate and relevant information about the financial and operating performance of the company

February 19, 2014 5:58 IST | India Infoline News Service
The Securities and Exchange Board of India (SEBI) on Tuesday asked all listed companies to prepare documents providing all relevant information about them every year.
These documents, to be known as annual information memorandum (AIM) will be in addition to the annual reports that companies have to issue with details on their earnings and balance sheets.
Additional disclosures to be included in Annual Report by listed companies in India have been specified through the Listing Agreement. Some of the key requirements:
Clause 49 specifies a detailed compliance report on Corporate Governance should be provided as part of the Annual Report.
Clause 55 requires specified listed companies to include in the specified format, a Business Responsibility Report as part of the Annual Report describing the initiatives taken from an
environmental, social and governance perspective.
All such information is available in fragments and there is no single document which contains all subsequent updates of the company at one place, SEBI said in a circular.
Further, Listed companies in India are required to make submissions with various authorities, viz. Stock Exchange, Registrar of Companies, Regulators, etc. The frequency of such submissions is stipulated by the relevant legislation and can be annual, half yearly, quarterly, event based, etc. While listed companies in India make such submissions, there is no availability of a comprehensive information memorandum about the company which would enable investors to obtain all relevant information at one place.
Further, the material events after listing disclosed to the public are available across a large time span and investors may find it difficult to access all relevant information for the purpose of making an informed investment decision.
AIM will provide shareholders and prospective shareholders with accurate and relevant information about the financial and operating performance of the company. Such a document will be comprehensive in nature and will include corporate governance and business responsibility reports and related party disclosures.
Once companies include such details in AIMs, their annual reports could limit their scope only to details required under the Companies Act, which will consequently reduce costs as AIM will be required to be filed in electronic format.
Sebi proposed that listed companies prepare AIM on a yearly basis and disseminate these within 135 days from the end of every fiscal.
The report, after being approved by the company’s board of directors, will be disseminated electronically on the company’s website and on stock exchanges, Sebi proposed.

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