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One out of five Indian firms do not declare Q4 results
A BS Research Bureau study of top 100 companies listed on the Bombay Stock Exchange shows that at least 24 have not declared their fourth quarter numbers for financial year 2010-11, though they have filed audited results for the whole year.
The number was 23 in the previous year.
Investor associations and some senior auditors said companies were being less transparent and putting investors to inconvenience by denying them the complete picture of their financials.
S Vedula of Investors Grievances Forum, a Sebi-registered investors' association, said: "Companies should declare Q4 numbers along with the full financial year's audited numbers. The additional time companies get is for submitting their audited results and not to conceal anything from investors."
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One out of five Indian firms do not declare Q4 results
The list includes several companies from the Tata Group and the Reliance Anil Dhirubhai Group, such as Tata Steel, Tata Motors, TCS, Tata Global Beverages, Tata Power, Reliance Power, Reliance Communications and Reliance Capital. Public sector undertakings Coal India, Powergrid and NHPC are part of the list, besides private companies such as Unitech, Indiabulls Financials and Ambuja Cements.
NHPC Chairman and Managing Director A B L Srivastava said: "It is not mandatory to declare Q4 numbers. We are going by the law. After our audit committee meets in Mumbai, we explain all the numbers to analysts and investors."
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One out of five Indian firms do not declare Q4 results
AK Sinha, director, finance, Coal India, said it was not mandatory to give Q4 numbers.
"Also, we did not have audited Q4 results of last year as we were not listed then."
When asked if Coal India would start declaring Q4 numbers, he said, "I cannot commit."
In an email response, a Tata Motors spokesperson said: "As is expected and mandated, Tata Motors declares quarterly performance at the end of first, second and third quarters, so that investors get a moving picture through the financial year.
"At the end of a financial year, it is Tata Motors' belief, the company's full year's performance and picture is of greater importance - it being connected to dividend payout, etc - for an investor than that of the last quarter specifically. Hence, at the end of the financial year, Tata Motors declares full-year performance."
One out of five Indian firms do not declare Q4 results
Many said this was not an investor-friendly practice. Lack of fourth quarter numbers means investors who want to know about developments over the quarter and those who want to compare it with the same period of previous years are left in the lurch, say institutional investors.
Sanjay Sinha, CEO, L&T Mutual Fund, says it is better if companies disclose more.
"There is a provision in law. Right now, some companies exercise it. Others choose not to. But more the disclosure, the better it is."
Some auditors said companies were talking shelter in the language of the clause, while breaching its spirit.
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One out of five Indian firms do not declare Q4 results
KH Vishwanathan of Astute Consulting said there was no exemption.
"As per the listing agreement, every company is required to declare quarterly results within 45 days of the end of the quarter. There is no exception. It is for exchanges to see if companies are adhering to the listing agreement. Sebi can impose a penalty."
Agarwal said this did not involve any extra cost or inconvenience to companies or auditors.
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One out of five Indian firms do not declare Q4 results
Senior broker Deena Mehta said Sebi should make declaration of quarterly numbers compulsory for at least the top companies.
"This should be at least enforced for stocks in the A-group or the ones on the futures and options list. While exchanges should look at it from a disciplinary and regulatory point of view, Sebi should take action keeping in mind investor interest."
According to her, the action should be two-fold. "While there should penal action for failure to report, measures should also be taken to ensure that companies fall in line in future," she said.
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One out of five Indian firms do not declare Q4 results
In September 2009, a Sebi committee on disclosure and accounting standards had observed that: "If a company opts to submit annual audited results in lieu of its last quarter financial results, there is no information available in public domain about its financials for about five months or more, which could make its shares more prone to insider trading."
In April 2010, Sebi had amended Clause 41 of the listing agreement to make listed entities disclose quarterly (audited or un-audited with limited review) results within 45 days of the end of a quarter.
It further said that audited annual results shall be disclosed within 60 days of the end of the financial year for entities which opted to submit annual audited results in lieu of the last quarter unaudited financial results with limited review.
"When you declare the audited annual numbers, they include fourth quarter numbers. They can be derived. Sebi rules permit declaration of audited annual results by 60 days," said Atul Desai, a senior chartered accountant who audits some large companies.
