sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
« News Headlines »
 What to do if you missed the (second) tax deadline
 Income-tax (5th Amendment) Rules, 2018 - Notification under section 9A (3) of the Income-tax Act, 1961 in respect of Fund Manager Regime
 Income Tax department warns salaried class again filing wrong ITRs
 ITR-1 form for AY 18-19 now available for e-filing
 New Income Tax Return Form for Salaried Class available in Portal
 Income Tax Return: ITR-1 ready for e-filing, says I-T department
 6 Tax changes you need to keep in mind while filing ITR for FY17-18 Income Tax Return efiling
 Income-tax (5th Amendment) Rules, 2018
 Last-minute tax tips for late filers
 What demonetisation did to tax collections
 Income–Tax (Fourth Amendment) Rules, 2018

Abridged reporting
May, 17th 2007

The Securities and Exchange Board of India (SEBI) has heeded to the plea of listed companies to send but a skeletal annual report to their members.

It has directed stock exchanges to amend Clause 32 of the Listing Agreement accordingly. More than two decades ago, Section 219 of the Companies Act, 1956 was amended to the same effect.

SEBI, which came onto the scene much later (1992, to be precise), however, did not offer this escape route to listed companies.

Obviously, it must have thought that the norms on disclosure for companies in which public are substantially interested read, listed companies vis--vis the norms for others ought to be more demanding. In the event, the sudden volte-face in its thinking is a tad perplexing.

Escape Routes

Three extenuating factors have been pleaded for affording this escape route First, those members who make a written request for a complete report would in any case be supplied one, which is what section 219 also mandates. Second, the full report in any case is available if only members want. And, third, why inflict avoidable costs on companies which printing voluminous reports means.

A listed company that mobilises funds from the public should not fight shy of baring all to its members.

Having furnished the requisite information the next thing is to disseminate it to them. Why should a member be expected to go to the Registrar's office or go to the web site of the company?

Not all members are computer-savvy or have access to the Internet. The cost argument is laughable to say the least. Companies, which splurge on advertising, travelling and other expenses, cannot be heard to say that full-fledged annual reports cost them a fortune and burns a hole in their pockets. Cost-cutting obviously needs to be done elsewhere.

The abridged report together with complete audit report may whet the curiosity of the reader without sating it. The auditor might have gone hammer and tongs at an accounting policy for which answer might lie in the full-fledged report.

Now it is unfair to expect a discerning reader to ask for the full report to sate his curiosity before he attends the annual general meeting especially when there is no guarantee that the full report would arrive on time so as to give him a clear 21-day access to it before the meeting.

Unwise stance?

The listed companies' plea for parity of treatment in this regard with unlisted ones smacks of a pennywise pound-foolish stance.

It is perfectly all right for the law to exempt unlisted companies as in vast majority of cases such companies have membership comprised largely from a charmed circle of friends and relatives on first name terms with their promoters.

But not so for a listed company whose members are strewn, as it were, all over the place sometimes even abroad.

Having sought their money, the least such a company can do to them is to provide an easy and untrammeled access to its annual report.

S. Murlidharan
(The author is a Delhi-based chartered accountant.)

Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Services SEO LLC e-boost Search Engine Optimization Services Internet Marketing Services Website Placement Services On-site Webs

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions