In order to improve the continual disclosure standards, the Securities and Exchange Board of India (Sebi) has mandated corporates mobilising funds through public or rights issues to publish a statement showing utilisation of funds on a quarterly basis. The statement should accompany the declaration of quarterly results.
The statement should include variations between the projected utilisation of the fund or projected profitability statement made by it in its prospectus, and the actual utilisation of funds or actual profitability.
Earlier on, companies had to publish statement of utilisation of funds on a half yearly basis. The market regulator has been examining the possibility of making declaration of end-use of funds mandatory in every quarter, for quite some time.
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Sebi chairman D R Mehta had hinted at this on his visit to Calcutta on May 8.
Sebi has intimated the stock exchanges (SEs) through a circular dated May 10, requiring the SEs to make necessary amendments in their listing agreements.
On Sebi's major initiatives on the corporate governance front, Mehta had said that the Sebi guidelines on this would be implemented through the listing agreement of the corporates with the bourses.
"We had sent the recommendations to Sir Adrian Cadbury and received positive response. In fact, there was an advantage in our coming in later, since we could incorporate work done by the Cadbury committee and the OECD in this regard," Mehta said.
Meanwhile, the regulator will be meeting representatives of SEs today, to discuss various issues on dematerialised trading. "The regulator is likely to discuss whether or not to add more scrips in the compulsory dematerialised trading list," said Tapas Datta, executive director, Calcutta Stock Exchange, who will be attending the meeting.
Meanwhile, 63 companies, whose scrips were included in the list of securities for compulsory trading in dematerialised form for institutional investors and oversees corporate bodies (OCBs) effective from May 15, 2000, could not sign agreements and establish connectivity with the depositories in time.
Sebi announced that the effective date for compulsory trading by institutional investors and OCBs in dematerialised form for these 63 scrips stands postponed and the revised date would be announced later.