Public Company Reporting Requirements

Outcome of SEBI Board Meeting dated 30 September, 2024: Prohibition of Insider Trading Regulations related: - Expansion of the definition of connected persons to include a firm or its partner or employee where a “connected person” is also a partner, as well as individuals sharing a household or residence with a “connected person.” - The provisions related to connected persons will now apply to “relatives” rather than just “immediate relatives” - Insertion of a new definition “relative” to include the spouse, parents (including parents of the spouse), siblings (including siblings of the spouse), and children (including children of the spouse), along with their spouse LODR related - Introduction of single filing system for listed entities to file relevant reports, documents etc. on one exchange which will be automatically disseminated at the other exchange - Filings integrated into two broad categories viz., Integrated Filing (Governance) and Integrated Filing (Financial) - System driven disclosure of shareholding pattern and revision in credit ratings by Stock Exchanges - Detailed advertisement of financial results in newspapers would be optional for listed entities - Additional time of 3 months to fill up vacancies in Board and KMP positions at listed entities coming out of the CIRP - Increased time of 3 hours instead of 30 mins for outcome of board meeting that concludes after trading hours - Additional time (72 hours instead of 24 hours) for disclosure of legal disputes subject to maintaining such information in SDD - Disclosure of tax litigations and tax disputes on the basis of materiality. - Disclosure of fines / penalties imposed on the basis of new materiality threshold Rs. 1 lakh for sector regulators / enforcement agencies and Rs. 10 lakhs for other authorities) as against the present requirement to disclose all fines and penalties ICDR related - Faster Rights Issue: to be completed within 23 working days v/s present average timelines of 317 days. Requirement of filing Draft letter of offer (only issue related incremental information) with SEBI discontinued. Mandatory appointment of merchant banker made optional. - Pre-issue and price band advertisement will be merged into a single advertisement - Issuers can voluntarily disclose proforma financials for acquisitions or divestments already undertaken or proposed from issue proceeds in case of public issue, rights issue and QIPs - Issuers with outstanding SARS granted to employees, which are fully exercised for equity shares before filing the RHP are allowed to file the DRHP #SEBI #Boardmeeting #outcome #insidertrading #ICDR #LODR

Consolidation of Sustainability Reporting Standards 🌎 The landscape of sustainability reporting is shifting towards greater clarity and consistency. With multiple frameworks guiding corporate disclosures, the integration of these standards is key to easing the reporting process for companies and enhancing transparency for investors. The International Sustainability Standards Board (ISSB) is at the forefront of this effort, aligning with established frameworks like the Task Force on Climate-Related Financial Disclosures (TCFD) to streamline reporting guidelines. This alignment makes it easier for companies to report climate risks in a standardized format, improving consistency across the board. The International Financial Reporting Standards (IFRS) Foundation plays a critical role by merging several reporting frameworks, including the Climate Disclosure Standards Board (CDSB) and the Value Reporting Foundation (VRF). This consolidation reduces complexity, allowing companies to focus on one core set of standards rather than navigating multiple, overlapping guidelines. The Global Reporting Initiative (GRI) complements the work of ISSB by offering additional insights into social and governance factors. Together, these frameworks help companies address a full range of sustainability topics while maintaining compatibility with financial reporting needs. The Carbon Disclosure Project (CDP) also provides a foundation for climate-related disclosures. By building on CDP’s standards, these integrated frameworks offer companies a unified approach to reporting their environmental impacts in a way that is accessible and useful for stakeholders. Overall, the consolidation of these standards not only simplifies reporting but also promotes interoperability, enabling companies to share consistent, reliable data that meets global expectations. This unified approach is essential in building trust and transparency across industries and driving sustainable business practices. Source: IBM #sustainability #sustainable #business #esg #climatechange #climateaction #reporting

IFRS 18 is Here: A New Era for Financial Statement Presentation A significant shift in financial reporting is on the horizon. The International Accounting Standards Board (IASB) has issued IFRS 18, a new standard for the presentation and disclosure in financial statements, which will officially replace the long-standing IAS 1. This marks a pivotal moment for preparers and users of financial statements, aiming to enhance comparability and transparency in financial reporting worldwide. Key Changes to Expect: IFRS 18 introduces several key changes designed to improve the structure and content of the statement of profit or loss. The most notable changes include: Defined Categories in the Statement of Profit or Loss: IFRS 18 mandates the classification of income and expenses into three main categories: operating, investing, and financing. This structured approach is intended to provide a more consistent and comparable view of a company's performance. New Required Subtotals: The new standard will require the presentation of two key subtotals in the statement of profit or loss: Operating profit or loss Profit or loss before financing and income tax These defined subtotals will offer a clearer picture of a company's core operational performance. Enhanced Disclosures for Management-Defined Performance Measures (MPMs): Companies will now be required to provide more transparent disclosures about any non-GAAP or alternative performance measures they use. This includes a reconciliation to the nearest IFRS-defined total, bringing greater clarity and discipline to the use of such metrics. Improved Aggregation and Disaggregation: IFRS 18 provides more detailed guidance on how to group and separate information in the financial statements, aiming to strike a better balance between providing sufficient detail without overwhelming users with immaterial information. What This Means for Businesses and Investors: The implementation of IFRS 18 will require companies to review and potentially revise their financial reporting systems and processes to align with the new presentation requirements. This may involve changes to chart of accounts, internal controls, and financial statement templates. For investors and other users of financial statements, IFRS 18 is expected to bring significant benefits. The standardized presentation and enhanced disclosures will facilitate more meaningful analysis and comparison of companies across different industries and jurisdictions. The clearer distinction between operating, investing, and financing activities will provide deeper insights into a company's value creation process. The transition to IFRS 18 presents both a challenge and an opportunity. By embracing these changes, companies can enhance their financial storytelling and provide stakeholders with a more transparent and coherent view of their performance in the new era of financial reporting. #IFRS18 #IFRS #IAS1

IFRS 18 IS HERE: USHERING A NEW ERA IN FINANCIAL STATEMENT PRESENTATION Starting 1 January 2027 (early adoption permitted), IFRS 18 will officially replace IAS 1 – Presentation of Financial Statements, marking a major milestone in the evolution of financial reporting. As a Finance Team Lead with deep hands-on experience in IFRS and international accounting standards, I’ve had the opportunity to dive into this transformative change — and it’s clear: this isn’t just about compliance. It’s about how we tell the financial story of our organizations to investors, regulators, and stakeholders. What’s Changing? At the heart of IFRS 18 is a more structured and standardized Statement of Profit or Loss, now categorized into three clearly defined sections: 1️⃣ Operating – Core business activities (e.g., revenue, cost of sales, admin expenses), now culminating in a mandatory “Operating Profit” subtotal. 2️⃣ Investing – Captures returns from associates and investments, helping users understand value creation beyond operations. 3️⃣ Financing – Reflects interest expense, FX losses, and the cost of capital, separated from business performance. Another key highlight: The introduction of “Profit Before Financing and Income Tax” – a new subtotal that gives clearer insight into core performance. Gone are the gray areas and inconsistent reporting practices. Now, CFOs and finance leaders must align internal systems, reporting structures, and the chart of accounts to reflect this new classification model. Practical Implications 1) Interest Expense on Lease Liabilities 🔹 Previously: Reported inconsistently under finance costs 🔹 Now: Must be classified under Financing 2) Investment in Associates 🔹 Previously: Placed variably across statements 🔹 Now: Clearly under Investing Revenue & Cost of Sales 🔹 Remain under Operating Why This Matters for CFOs & Finance Teams: ✅ Clarity – Standardization across industries improves comparability ✅ Discipline – Enhanced transparency for Management-Defined Performance Measures (MPMs) ✅ Confidence – Transparent reporting builds investor trust ✅ Future-Readiness – Aligning systems now avoids disruption later The time to prepare is now. Let’s not view IFRS 18 as just a new standard — but as a strategic opportunity to elevate financial storytelling with structure, consistency, and confidence. 👉 IFRS 18 is not just a compliance requirement — it's a communication tool for value. #IFRS18 #FinanceLeadership #FinancialReporting #AccountingStandards #IASB #FinanceTeamLead #IFRS #TransparencyInFinance #MPMs #OperatingProfit #InvestingActivities #FinancingActivities #FinancialStorytelling #CFOInsights #FutureOfFinance #ChartOfAccounts #ERPTransformation

Does a global cyber outage qualify as a "material cybersecurity incident"? This is the question hundreds of companies are grappling with this week. Under the SEC cyber rule, public companies are required to promptly disclose material cybersecurity incidents under Item 1.05 of Form 8-K. If the company is unsure whether the incident is material, the SEC released guidance that those incidents should be reported under Item 8.01. But what is a "material cybersecurity incident"? "Material" - Limits the information required to be furnished to those matters about which an average prudent investor ought reasonably to be informed before purchasing a security. "Cybersecurity Incident" -  An unauthorized occurrence, or a series of related unauthorized occurrences, on or conducted through a registrant’s information systems that jeopardizes the confidentiality, integrity, or availability of a registrant’s information systems or any information residing therein.  Late last week, CrowdStrike released a faulty driver update for its flagship Endpoint Detection and Response tool, Falcon. Drivers operate at the kernel level of a computer, a critical and highly controlled part of the system. Typically, software avoids running in the kernel to prevent system crashes that can lead to data corruption. This corruption impacted any Windows 10 machine running Falcon-roughly 9 million devices. However, since these were mainly enterprise machines, the crashes occurred at airports, banks, healthcare facilities, government agencies, and other locations, resulting in an extensively publicized outage. Over the past 5 days, CrowdStrike's stock value plunged more than 25% as a direct result of this event. On Monday, CrowdStrike filed a Form 8-K under Item 8.01 and not Item 1.05-indicating they had not determined this to be a "material cybersecurity incident." How could that be? The answer is in the definition. This is certainly a "material" event, as evidenced by the more than 25% drop in stock value. But is it a "cybersecurity incident"? The SEC's definition turns on an "unauthorized occurrence." While a threat actor need not be involved, the occurrence itself must be unauthorized-a fire at a datacenter, for instance, could qualify. CrowdStrike's update, though faulty, was authorized. As such, it may not fall within the ambit of the SEC rule. Erring on the side of transparency, CrowdStrike reported this incident through the most legally sufficient vehicle available - Item 8.01. What does this mean for CrowdStrike's public customers impacted by this event? Other companies should consider a range of factors when assessing whether this incident materially impacted them, such as: -Reputational harm -Remediation costs -Legal risks -Lost revenues -Insurance Importantly, these should also be placed in the context of a global cyber outage - e.g., what is the reputational damage to single company amongst thousands impacted? This will be unique to each company --

🌍 As private equity firms manage trillions of dollars globally, how do they communicate their sustainability efforts? More importantly, do their disclosures actually reflect tangible environmental and social impacts? These critical questions are tackled in a new study by Jefferson Kaduvinal Abraham, Marcel Olbert, and Florin V. titled "ESG Disclosures in the Private Equity Industry, published in the Journal of Accounting Research (2024). This terrific paper systematically examines how private equity (PE) firms report on environmental, social, and governance (ESG) practices and whether these reports align with real outcomes. Here are the key findings: 1️⃣ Growing ESG Transparency: Using data from 5,468 PE firms between 2000 and 2022, the paper shows a significant increase in voluntary ESG disclosures on firms' websites, particularly after 2011. PE firms are increasingly discussing social and environmental issues alongside governance, with social topics recently surpassing environmental ones. 2️⃣ Demand from Investors: The paper finds that fund investors (Limited Partners, LPs) with ESG preferences are a major driver of increased disclosures. When PE firms raise capital, ESG transparency spikes, especially from firms aiming to attract LPs with strong sustainability commitments. 3️⃣ Positive ESG Outcomes: PE firms that disclose more ESG information also tend to have better ESG performance in their portfolio companies. For example, companies acquired by PE firms with high environmental disclosures saw reductions in emissions and chemical releases of up to 26%. 4️⃣ ESG Outcomes: The study shows that PE firms with more comprehensive ESG disclosures tend to deliver stronger outcomes, suggesting that these disclosures are credible and not merely for appearance, despite concerns about greenwashing in the industry. 📊 Implications: The authors highlight several important implications of their findings. For investors, the research underscores the value of scrutinizing ESG disclosures when allocating capital, as these disclosures are linked to real-world performance. For regulators, the study provides evidence supporting the case for more standardized ESG reporting requirements across the private equity sector. This could help mitigate the risks of greenwashing while promoting genuine improvements in sustainability practices across portfolio companies. 🌱 As ESG issues become more central to private capital, these findings are critical for investors and regulators alike. This important piece of research underscores the need for transparent and reliable ESG reporting, not just to attract capital, but also to drive real-world improvements in sustainability. #ESG #PrivateEquity #Sustainability #CorporateTransparency #ResponsibleInvesting 📖 Read the full paper here: https://lnkd.in/eNKAMqqM

Well, it's now official. The U.S. Securities and Exchange Commission (SEC) just put out this press release. SEC registrants (any company that files documents with the SEC) must: 1) Disclose any #cybersecurity incident they determine to be material and to describe the material aspects of the incident's nature, scope, and timing, as well as its material impact or reasonably likely material impact on the registrant. This is due four business days after it is determined that a cybersecurity incident is material. 2) Describe their processes, if any, for assessing, identifying, and managing material #risks from cybersecurity threats, as well as reasonably likely material effects of risks from cybersecurity #threats and previous cybersecurity incidents. 3) Describe the #board of directors’ oversight of risks from cybersecurity threats and management’s role and expertise in assessing and managing material risks from cybersecurity threats. The 2nd and 3rd disclosures will be required in a registrant's annual report, due beginning with fiscal years ending on or after December 15, 2023.

Overview of data requirements of ESRS: The information companies need to provide, assess and report if they find ESRS material (high-level summary) The European Sustainability Reporting Standards (ESRS), under the Corporate Sustainability Reporting Directive (CSRD), provide a structured framework for companies to disclose sustainability-related information. This chart presents reporting requirements across ESRS, categorizing sustainability topics into environmental (E), social (S), and governance (G) dimensions, including sub-topics. However, this is not the full picture, as companies must also conduct a materiality assessment to provide relevant information for stakeholders. It highlights where policies, actions, targets, transition plans, and key metrics are mandatory. At a topical level, if an organization deems a data point immaterial, it does not have to report on it. A sustainability topic must typically be reported under a specific disclosure requirement to become actionable. Reliable reporting requires diligent systems, operating procedures, and data manuals. Companies must conduct a double materiality assessment to determine whether a sustainability matter has a significant financial impact or affects people and the environment. The chart outlines ESRS reporting requirements, including policies, actions, targets, and transition plans. For example, Environmental Topics (E1-E5) require both policies and targets for CSRD compliance and GHG reductions, and a reporting on plans, investments, and levers (by e.g., including CapEx and OpEx-planning from EU taxonomy). Gaps exist between commitments and implementation. However, since CSRD is a reporting directive, it does not mandate specific actions. Sustainability reporting must go beyond commitments and include measurable actions. Each policy should have specific objectives linked to measurable targets for accountability. The Social Standards (ESRS S1-S4) and Governance Standard (G1) are policy-based. CSRD and ESRS require reporting on human rights, labor conditions, and social responsibility, referencing OECD and UNGP. SMEs must prepare for extended supplier reporting obligations. Policies must be implemented via transition or action plans to support long-term sustainability. Companies must assign accountability for each material sustainability matter. Hopefully once implemented and transposed, the Corporate Sustainability Due Diligence Directive (CSDDD) will work alongside CSRD, requiring businesses to integrate ESG into corporate governance. Looking forward to see a lot of new ESRS reports in the coming months!

Unlocking IPO Success: The Power of Restating Financial Statements 🚀📊 Preparing for an IPO is an exciting yet challenging journey, and one of the most critical steps in the process is restating consolidated financial statements. As per SEBI (ICDR) Regulations, 2018, restatement ensures consistency in accounting policies, presentation, and disclosures across all periods reflected in the offer document. This applies to the latest financial year, the previous three years, and any stub period. Here’s what you need to know: Restatement Scenarios: 1️⃣ Indian GAAP to Ind AS Conversion Companies reporting under Indian GAAP are advised to adopt Ind AS early in the IPO process. While initial restated financials can be presented under Indian GAAP, Ind AS must be adopted once the listing process begins. Early adoption minimizes costs, saves time, and enhances comparability with peers. 2️⃣ Already Reporting Under Ind AS Adjustments are usually limited to ensuring consistency in accounting policies and practices, simplifying the process. Key Adjustments During Restatement 📈Change in Accounting Policies Retrospective adjustments may be needed for new standards like Ind AS 115 (Revenue) or Ind AS 116 (Leases). Regulatory amendments must also be incorporated consistently. ❌ Prior Period Errors Errors such as incorrect accruals or misclassified expenses are corrected to ensure transparency and accuracy. 💡 Changes in Accounting Estimates Adjustments like depreciation or inventory obsolescence are applied prospectively, reflecting the company’s current position. 📝 Auditor’s Report Opinions Issues like qualified or adverse opinions must be addressed and explained in the offer document. Why Early Adoption of Ind AS is Crucial 💰 Better Valuation: Ind AS adjustments can significantly influence profitability, equity, and IPO pricing. 💼 Investor Confidence: Transparent financials under Ind AS boost credibility and trust. 🤝 Peer Comparability: Aligning with industry peers enhances relatability for potential investors. ⏳ Effort Optimization: Simultaneous preparation of IPO restatement and Ind AS restatement saves resources. The Restatement Process ✅ Restated financials must cover the past three years and any stub period. 📚 Adjustments for changes in accounting policies, errors, or estimates must be meticulously handled. 📄 All restated financials require statutory auditor certification under ICAI guidelines. 🌟 Your IPO dream deserves nothing less than precision, preparation, and perfection. Let the numbers tell a story that investors can’t resist! 📈✨ LinkedIn Guide to Creating CA Sakshi Borikar

What does ESG transparency mean for the future of business? Imagine: You're walking into a store, ready to make a purchase. You pick up two products, one with clear information about its environmental impact, how it's made, and whether it supports fair labor practices and one without. Which one would you choose? Now, Shift that decision-making to investors, customers, or even governments. They’re increasingly prioritizing companies that openly share their Environmental, Social, and Governance (ESG) efforts. Why? Because transparency builds trust, and trust drives long-term success. Here’s the challenge: ESG disclosures aren’t just nice-to-have anymore they’re becoming mandatory. Governments, regulatory bodies, and stock exchanges worldwide are implementing ESG compliance requirements. According to a recent report over 90% of global investors consider ESG factors when making decisions, and more than 75% of large companies now issue sustainability reports. These reports aren’t just data dumps; they’re stories. They tell us how a company is reducing carbon emissions, supporting its workforce, and making governance decisions that align with broader societal goals. Think of it as a window into how a business impacts the world and, just as importantly, how it manages the risks and opportunities tied to that impact. In my opinion, ESG transparency isn’t only about ticking boxes. It’s about accountability showing that businesses understand their role in shaping a sustainable future. Companies that approach ESG disclosures thoughtfully, with clear frameworks and genuine commitment, are more likely to win the trust of their stakeholders and thrive in an increasingly conscientious marketplace. For businesses navigating this complex landscape, it’s crucial to understand the most common ESG disclosure frameworks, like the Global Reporting Initiative (GRI) or the Sustainability Accounting Standards Board (SASB). These frameworks provide a structure, ensuring reports are not just thorough but also meaningful. The journey to ESG transparency might feel overwhelming at first, but it’s also an opportunity a chance to stand out by showcasing what you stand for. How does your organization approach transparency? Do you see it as a compliance exercise or a way to connect authentically with your audience?