Unlisted companies too may have to submit quarterly, half-yearly financial statements

The government is planning to introduce new provisions in the Companies Act that would require unlisted companies also to submit financial statements to the government on a quarterly or half-yearly basis, according to an official.

There are more than 11 lakh unlisted companies that are active in the country and the proposal also assumes significance against the backdrop of instances of financial woes at some large unlisted entities.
The corporate affairs ministry is looking at introducing provisions in the companies law that would require unlisted firms to furnish financial statements every three months or six months.
While listed companies are required to disclose their financials every three months under Sebi regulations, reports point out that there are systemically important but are not listed, whose financial details need to be updated.
Currently, unlisted companies are not required to furnish financial statements on a quarterly or half-yearly basis. Such a company can submit its financial statement and annual returns to the ministry even 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.
The government is now looking at thresholds for deciding which categories of unlisted companies would have to submit their financial statements on a quarterly or half-yearly basis.
This would require amendments in the Companies Act.