As per the news published in livemint, the Govt. is planning to introduce a provision in the Company’s Act 2013 to make unlisted companies give their financial results on a quarterly or Half-yearly basis, similar to listed companies, in place of yearly disclosure.
Unlisted companies mostly provide annual financial data in the month of Oct or Nov. This means, the annual results ending in March, becomes available to investors via Ministry of Corporate Affairs, after 6 Months.
1. All companies should not fall into this provision, as it will increase unnecessary compliance costs of filling & auditing of financials data, etc, especially for smaller companies. So, turnover or PAT based criterion must be adopted to select which company has to comply with this provision and should not be applied to all in unison.
2. This is a good step considering, today, we get to know about the financials of the companies once in a year. So, if this provision comes into the picture, then we can gauze company performance on a 3-Months or 6-Months basis, which will give more insight into the business of the company.
3. Good for unlisted shares investors as they will come in par with listed companies shareholders, in terms of frequency of disclosures.