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| Sunday, 26 January 2003 |
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Business |  |
| News Business Features Editorial
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Non-compliance in 50 companies - sec The Securities and Exchange Commission (SEC) has reviewed 100 annual reports and accounts of listed companies and found that 50 companies have not complied with the relevant rules and regulations. Areas of non-compliance were accounting policies, directors' responsibility, rights, preferences and restriction of shares, nature and purpose of reserves, inadequate cross-references, sub-classification of the line items presented, amount of inventories pledged, cost formula used, tax reconciliation, the amount of tax losses and defined contribution plans. Amounts of restriction on titles and property, plant and equipment pledged as securities, details of revalued assets, exchange differences, market value of marketable investments, details of goodwill and negative goodwill, financial information by segments, elements of related party transactions not disclosed, maturities of assets and liabilities, concentration in the distribution of assets, the amount of non-performing loans and the basis of calculation were also areas of non-compliance, states the SEC Annual Report 2002. The Corporate Affairs Division of the SEC has taken action on the non-compliance cases, considering the nature and materiality of the issues and has cautioned the companies that such deviations should not occur in the future. The division has also forwarded a report of its findings to the Institute of Chartered Accountants of Sri Lanka. It has also received 35 complaints from shareholders of listed companies. Three complaints were outside the jurisdiction of the SEC. Two complaints out of the 32 complaints are pending while the rest has been resolved. The SEC monitors trading of listed securities on the Colombo Stock Exchange for unusual price and volume movements using a real time computer-assisted surveillance system. The division also scrutinises newspaper articles and verifies rumours and advertisements on a daily basis to identify any possible breaches of securities laws and regulations. The surveillance staff monitor the share movements for indications of market manipulations and/or insider dealing. During the year 2002, 22 issues were examined. |
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