SEBI eases compliance norms on consolidated results for banks, insurance companies

New Delhi: 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 the publication of advertisement in newspapers about their board meetings, financial results and other events till 30 June, SEBI said in a circular. Earlier, the exemption was given till 15 May. “In view of the continuing lockdown and the resultant bottlenecks relating to print versions of newspapers… exemptions from the publication of advertisements in newspapers are extended for all events scheduled till 30 June, 2020,” the regulator noted. [caption id=“attachment_4307425” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] Also, SEBI has eased compliance norms pertaining to the requirement of sending physical copies of annual reports to shareholders; proxy forms for a 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 30 June, 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 LODR (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 (Ind-AS)) Rules stipulate the adoption and applicability of Ind-AS in a phased manner beginning from the 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 the requirement of sending physical copies of annual reports to shareholders, SEBI has dispensed with this norm for listed entities who conduct their AGMs during the calendar year 2020 ( till 31 December, 2020). The norms require the 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 the compliance requirement related to dividend warrants or cheques. The norms prescribe the 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 normalisation 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.