Islamabad, Aug 30; SECP Announces New Financial Statement Disclosure Rules for Listed Companies. New disclosure criteria for financial statements by listed firms and their subsidiaries that do not have their primary business activity involved in Shariah-compliant activities have been announced by the Securities and Exchange Commission of Pakistan (SECP). S. R. O.1278(I)/2024, which amends the Fourth Schedule of the Companies Act of 2017, has been released by the SECP.
The following must be disclosed in a standalone and consolidated financial statement in accordance with Section 228 of the Securities Act by every listed company and its subsidiary that does not engage in Shariah-compliant business activities as its primary business activities. These disclosures must be made separately and through a note that is cross-referenced with pertinent notes.
Disclosures pertaining to the Liability Side of the Statement of Financial Position are needed. These include financing obtained through Islamic channels, whether it be long-term, short-term, or lease finance.
Interest or markup that is accumulated on traditional loans or advances.
Statement of Financial Position – Asset Side Disclosures Needed: ·Shariah-compliant bank deposits, bank balances, and TDRs; ·Long-term and short-term Shariah-compliant investments.
Disclosures Needed in Connection with the Comprehensive Income Statement:
Income derived from a business division that complies with Shariah.
Liquidated damages or late payments breakdown.
Gain, loss, or dividend on investments made in accordance with Shariah, or portion of profit received from
companions who follow Shariah.
Profit derived from bank deposits, bank balances, or TDRs that adhere to Shariah regulations.
Gains on exchange of real currency
Gains on exchange made with traditional derivative financial instruments.
Profit made using an Islamic financing method.
• Total interest received on all traditional advances or loans.
·Source and comprehensive breakdown of additional revenue, comprising division of various or incidental parts of additional revenue into revenue that complies with Shariah and income that does not.
Other Disclosure Requirements are:
- Relationship with Shariah-compliant financial institutions, including banks, takaful operators and their windows, etc.
For the purposes of this clause, non-halal food and beverages, entertainment that does not comply with Shariah, insurance, interest-based lending, gambling, betting, liquor and liquor-related activities, pork and pork-related activities, conventional banks’ operations, and other activities that are deemed Shariah non-permissible are all considered Shariah non-permissible, according to SECP.
