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As reported by The Hindu BusinessLine, the government might ask unlisted companies to submit financial statements on a quarterly or half-yearly basis.
At present, there are over 11 lac active unlisted companies in India. The aim is to have updated financial details about systemically-important companies that are not listed.
The Ministry of Corporate Affairs is planning to introduce provisions in the Company Law that would require unlisted firms to present financial statements to the government.
A PTI official has stated that there would be thresholds for deciding which categories of unlisted companies would be required to submit the details. And to implement this process, certain amendments in the Companies Act 2013 would be required.
Under the Securities and Exchange Board of India (SEBI) regulations, the listed companies are required to furnish their financial statements every three or six months; but in case of the unlisted companies, there is no provision at present.
Currently, an unlisted company can submit its financial statement and annual returns to the ministry at least six months after completion of a fiscal. After the end of a financial year, a company has to hold its Annual General Meeting (AGM) within six months and the financial statement has to be submitted within 30 days of the meeting.
Within 60 days of the AGM, the company is required to furnish the annual returns. Under the current system, the ministry would not be updated in case there are any significant financial issues during the course of a financial year, as per the official.