Reduce time delay between financial results and annual reports: SEBI to CFOs | Mint

Mumbai, June 13 (PTI) Marketing Regulator Sebi Friday urged financial officers (financial officers) to reduce the passage between the announcement of financial results and the publication of full annual reports, aimed at improving investors’ confidence. In addition, CFOs were encouraged to deepen their involvement with audit committees and auditors, ensuring more collaborative and accountable financial disclosures, Sebi member Ananth Narayan said at an event here. Apart from emphasizing the important CFOS role in maintaining public trust, Narayan spoke about recent tendencies in capital formation, the opportunities and risks ahead, and the importance of creating effective regulations to promote continued capital growth. “Currently, the gap between annual results and full annual reports is between 70-140 days. The full report with notes to accounts, internal controls, audit key matters, and Caro (companies’ auditor report order) are much more informative. The shortening of this gap will significantly increase the transparency for investors. At the ETCFO Nextgen 2025 event on Friday, he emphasized that CFOs are needed to facilitate audit committees and auditors in the formation of the audit plan for the year and suggested that auditors should participate in the audit committee meetings, beyond discussing their specific items. This, he said further, will help increase confidence and open more communication channels between stakeholders. According to Narayan, the role of the CFO dramatically developed from a record holder to a forward-looking value architect. “If you (CFO) report on financial statements, it is not a routine formality. It is a solemn promise that what is offered is a true and equitable view of the financial health of the business. The promise is the basis of capital markets. If the trust is broken, the damage and great,” he added. He emphasized that CFOs should merely surpass the compliance with accounting standards and embrace their underlying principles, not just the letter, but the spirit of the law. Narayan pointed out that the rapid growth of India’s ecosystem of Securities Market, which expanded from 4.2 crore in March 2020 to 13 crore in March 2020. Mutual funds alone account for 6 unique investors, who tripled almost the number of six years ago. In FY 2024-25, mutual funds mobilized a record of £ 6 lakh crore in stock-pernicious risk-seeking funds. FPIs also had £ 71 Lakh Crore in stock assets in India from May 2025. At the same time, he emphasized the importance of security of investor trust. He warned against type I errors, such as management errors, technical crashes, fraud and manipulation that could seriously damage this trust. Similarly, he warned against Type II errors, where excessive regulation can impede innovation and growth. As AI, automation and energy -related technological shifts accelerate, the creation of business becomes more important than ever. Unfortunately, Narayan noted, there is a breach of trust on the type I errors. This includes cases of listed entities, sharp accounting practices around asset and investment valuations that mislead the public, and insider trading that are exploited unknown information for personal gain at the expense of retail investors. He also warned against the potholes of over-regulation, which could lead to type II errors and the formation of capital distortion. Narayan has called on CFOs and auditors to act as active partners in the formation of fair and balanced rules. He pointed out that Sebi’s consultative processes, including advisory committees, public consultations and regulatory working groups, were designed to include expert input, and suggested that it be time for financial heads to formally organize their votes for representation in these forums. Narayan, who raises concerns about current valuation practices, said there is a risk or at least a perception of ‘valuation shopping’, where entities seek the most favorable valuations. “Just as credit rating agencies (CRAS) are now revealed and held to standards, it is perhaps time for valuers to disclose assumptions, sensitivity series and records and hold accountable for ominous disorders,” he added.