Govt relaxes norms for filing accounts, fixing CEO salary

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For ensuring ease of doing business, the government today announced flexibility for corporates to finalise accounts and exempted unlisted companies having inadequate or no profit from seeking approval for CEO’s salary. Addressing his first press conference after taking over the new assignment, Corporate Affairs Minister Murli Deora said that he would like to ensure that corporates “devote their time and effort inrunning their enterprises than spending time in the corridors of government offices”.

By amending rules, the government has decided to allow holding companies not to physically attach the accounts of all subsidiaries along with their annual report.

Mr. Deora said that for large and globalised companies with many and geographically scattered subsidiaries attaching accounts of subsidiary firms with themselves become difficult.

However, this has been done without compromising the disclosure norms because the key accounting data in regard to subsidiary companies would be found in the consolidated accounts of the parent firm.

The unlisted companies, which have no shareholders in the form of general public, and are making no or inadequate profit, are being exempted from seeking approval for remuneration for top management.

However, the managerial remuneration would be subject approval by the special resolution of the shareholders.

For companies that have closed operations and are not filing annual returns, the MCA has launched a scheme for easy exit. The scheme, which was to close on January 31, have been extended till April this year.

Another initiative includes exempting companies in the areas of defence, space, research, export-oriented units, shipping,airlines, hotels and trading, from giving quantity details about their business.

India ranks 134th out of 183 nations in terms of ease of doing business.