To provide consolidated information on companies to investors in a single document, SEBI has proposed that the top 200 companies by market capitalisation would have to file an annual information memorandum (AIM) every year.

The AIM should contain details about the company, its history, promoters, contact information, key managerial personnel, business description, industry description, capital structure, market price information, risk factors, financial statements, management’s discussion and analysis of financial condition and results of operations, utilisation of issue proceeds, industry specific regulations and policies, legal information and litigation and material information in the preceding year.

This will be applicable for the top 200 companies from April 1, according to a SEBI discussion paper released on Tuesday.

Companies need to file the AIM within 135 days from the end of a financial year on their websites and on stock exchanges. The requirement for other companies would be from April 1, 2015.

Companies have to update information every year and file AIM only in e-form. SEBI has proposed that all the qualitative and quantitative information in the AIM has to be reviewed for accuracy, sufficiency and relevance.

AIM would be useful to investors for taking an informed investment decision, enable listed companies raise capital expeditiously, said SEBI. Moreover, inclusion of reports on corporate governance, business responsibility and related party transactions would mean their exclusion in the annual report.

Tejesh Chitlangi, Partner, IC Legal, said “The proposal looks good. However, listed companies will have to strengthen their legal-compliance teams so as to keep a regular track of company activities and annually collate the very broad set of information required to be disclosed under AIM.”

For companies planning an initial public offering, the requirement of AIM would commence with the IPO. The disclosures made by the companies at the IPO stage has to be updated annually to ensure that updated information is available in public domain at any point of time.

Companies wishing to use the AIM as a draft offer document for future capital raisings have to submit an auditor's examination report along with the AIM, said SEBI.

Related Topics
comment COMMENT NOW