Allow extension for Co accounts up to 6 months amidst disruptions by Covid-19; ASSOCHAM to MCA

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New Delhi: As the Financial Year 2019-2020 comes to close amidst nationwide lockdown due to Covid-19 health crisis, the ASSOCHAM has sought from the Ministry of Corporate Affairs (MCA) one-time extension of annual company accounts, up to September 30 or at least by three months up to June 30, 2020.

As follow-up of a high level meeting with the MCA, the ASSOCHAM has submitted a representation to the ministry, stating that extension by three or six months for finalisation of annual accounts would be required to reflect the true and fair statement about the businesses.

“This once-in-century kind of an event like virus attack would hopefully recede in the next few weeks or months. It would be only after normalcy returns in the economy that the companies would be able to resume their regular operations. Return to normalcy is required for any fair statement of accounts,” said ASSOCHAM secretary general, Mr Deepak Sood, elaborating on the plea to the MCA.

The Chamber letter to the Minister of Finance and Corporate Affairs, Mrs Nirmala Sitharaman and the MCA Secretary Mr Injeti Srinivas recommended that forbearances be given under the Companies Act, 2013.

“AGM for all companies should be allowed to be held within six months of 30th June, 2020, or 30th September 2020 i.e., latest by 31st December, 2020 or 31st March 2021 respectively, and on case to case basis. Subsequent relaxation is also desirable in terms of extension of time for filing income-tax returns for companies.”

It suggested that the directors be allowed to participate in meetings to discuss matters such as approval of financial statements, board’s report, etc. through video-conferencing or other audio-visual means in place of mandatory physical presence up to 30 June 2020.

The chamber also suggested changes in the norms for valuation of inventory so that true state of affairs is reflected in the account.

The last date for submission of public comments and by all stakeholders on the draft rules for the Corporate Social Responsibility be also be extended up to June 30, 2020, the ASSOCHAM letter to MCA said.

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