Some share market players are calling the regulators to standardize the information in the annual reports of publicity listed firms.
“Many annual reports talk about the companies’ corporate social responsibility, the country’s economy, etc, but those who want to invest will already be aware about it,” Rakshitha Perera, Head of Research Bartleet Mallory Stockbrokers said.
He said the intricacies of a firm’s group structure, its cross holdings, etc are information that most (international) investors are interested in, which are not included in some company annual reports.
“For an example, the New York Stock Exchange has standardised the way its listed firms' present annual reports where such information is mandatory,” he noted.
He said with such regulation, Sri Lanka is on a better footing to attract international capital. “We’re competing with more than 136 countries for investment. CSR, the country’s economy is undoubtedly important in a report, pertinent information relating to the company is also equally important. Regularizing the way a company reports its financial and annual data will make it that much easier to attract international investors,” he added.
Dr. Hareendra Dissa Bandara, Director, Financial Services Academy of the Securities & Exchange Commission agrees, saying that a minimum standard should be set in such reporting. “These requirements (pertaining to more information about a firm) can be incorporated into the minimum entry requirements of the Institute of Chartered Accountants of Sri Lanka annual reports competition, which will encourage the listed companies to report above this standard,” he told the Business Times.
Another analyst noted that critical information many investors will need in order to make sound and profitable decisions regarding the local markets and economies is important in annual reports.
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