Companies

Large private firms to be mandated to file ‘periodic’ financial statements

KR Srivats New Delhi | Updated on March 06, 2020 Published on March 06, 2020

Proposed move intended to make economic data more scientific

Call this the effect of blowouts in the NBFC and financial sector in recent years. The Centre has taken the next big step towards making it mandatory for certain large private companies to file their financial results on a “periodic basis” to the government.

This proposal, which will form part of the Companies (amendment) Bill 2020, will be in addition to the annual filing of financial statements — which is filed within six months of the closure of the financial year, official sources said.

“A new section 129A is proposed to be inserted to ensure that prescribed classes of unlisted companies file their financial results on a periodic basis. Periodic financial returns will have to be submitted so that periodic economic data is made more scientific,” they added.

Indications are that the periodicity of the filing will be made known through rules (subordinate legislation) once the enabling provision is introduced in the company law.

Easing compliance burden

Meanwhile, the Centre plans to bring amendments to the Company law so as to provide that private companies which list non-convertible debentures (NCDs) on stock exchanges would not be regarded as “listed companies” for the purpose of compliances.

“We propose to exclude certain class of companies from the definition of listed company’ mainly for listing of debt securities, in consultation with SEBI”, sources in the Corporate Affairs Ministry (MCA) said. This is expected to lower the compliance burden for companies that are only looking to list their debt securities in bourses.

Cross border insolvency

The Centre will not bring the proposed cross border insolvency framework as part of the proposed Companies (amendment) Bill, which will do an overhaul of the Companies Act, a government official said. The thinking in the Ministry is that cross border insolvency framework should be handled separately, the official said.

Meanwhile, the Standing Committee on Finance headed by BJP leader Jayant Sinha has in its report on the Insolvency and Bankruptcy (second amendment) Bill 2019 highlighted that cross border cases have already resulted in uncertain recoveries for creditors.

The Committee has urged the government to introduce the Bill (now in draft state and dedicated for cross border insolvency) in Parliament as soon as possible to further strengthen the insolvency framework.

Published on March 06, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
company law
Quarterly Results
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.