TO ensure better adoption and stronger scrutiny of corporate governance standards, the Ministry of Corporate Affairs (MCA) is considering referring the necessity for stringent rules for larger unlisted companies functioning within business conglomerates to the Company Law Committee (CLC), which recently had its term protracted by a year. Even though publicly listed companies are subject to vigorous disclosure rules and regulations, their unlisted counterparts presently do not abide by analogous standards.
The Securities and Exchange Board of India (SEBI), in its annual report for the financial year 20222023, accentuated the significance of efficiently handling and supervising probable perils stemming from unlisted entities within complex conglomerates. The suggested measures intend to nurture clarity and answerability within these diversified entities.
The CLC is considering a comprehensive structure to make larger unlisted firms comprising mature start-ups under a stringent supervisory framework. Among other rules and regulations, the committee is expected to deliberate elevated levels of guidelines on financial reporting. Obligatory submission of quarterly or biannual financial statements is among the directives being discussed for these entities, for which a permitting provision was introduced in the Companies Act in 2021. But a complete reporting frame has yet to be announced.
This story is from the October 2023 edition of Indian Economy & Market.
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This story is from the October 2023 edition of Indian Economy & Market.
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