NEW DELHI: The ministry of corporate affairs has amended rules to mandate detailed disclosure of funds accepted by companies under the Companies (Acceptance of Deposit) Rules, as per an official order.
The ministry said under the Companies (Acceptance of Deposit) Amendment rules, effective 29 August, disclosures have to be reported in amended forms.
The ministry also notified new forms for reporting details of deposits. Businesses will now be required to file by 30 June every year a return of deposits as per audited figures. Businesses will also have to report loans or advances received by the company from directors, shareholders, promoters or banks and financial institutions, which are referred to as exempted deposits.
Experts said the amended rules require companies to provide detailed disclosures with respect to exempted deposits in the revised forms.
“Such disclosures shall contain information pertaining to opening balance, additional loan during the year, repayments during the year, any other adjustment, closing balance and ageing of the loan outstanding for less than a year or 1 to 3 years or more than 3 years. Companies are also required to furnish information pertaining to liquid assets," said Bambi Bhalla, Emissary Counsel at law firm Cornellia Chambers.
Also, statutory auditors will be required to submit a declaration with respect to the exempted deposits and liquid assets. This move will help in ensuring greater transparency in reporting obligations, said Bhalla.
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