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Ambarish Mukherjee

NEW DELHI, May 10

THE Securities and Exchange Board of India (SEBI) has decided that henceforth listed companies will have to disclose audit qualifications in the unaudited/audited financial results published by them under clause 41 of the listing agreement, along with the impact of the audit qualifications on the company's profit or loss.

This move is expected to bring greater transparency into the functioning of listed companies.

To start with, all listed companies will now have to mandatorily disclose audit qualifications in their published annual results for 2001-02 as well as specify a definite time frame by when they will be able to remove the qualifications.

SEBI has instructed the stock exchanges to amend their listing agreement to ensure that the companies disclose audit qualifications in the unaudited/audited financial results.

SEBI has informed the exchanges that in case there is an audit qualification in the accounts of a listed company, the exchanges must ask the company to explain why there is audit qualification in the accounts and why the company failed to publish accounts without audit qualifications and when the company would remove the qualifications and publish accounts without qualifications.

The capital market regulator has also provided a specific format for companies which opt to publish audited results for the entire year within three months instead of publishing unaudited results for the last quarter within 30 days.

The SEBI move follows recommendations of the Accounting Standards Committee of SEBI, which the capital market regulator has decided to implement.

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