Covid-19 stress: Companies may not get immediate relief measures

With no national lockdown amid a surge in Covid incidents and no rush for filing new corporate insolvency cases, the government is not considering any immediate set of relief measures for companies.
 
Last year, after the pandemic hit India, the government had announced a slew of measures to ease the pressure on companies.
 
One of the steps taken was suspension of the insolvency and bankruptcy code (IBC). The corporate affairs ministry had also pushed deadlines for filing annual reports, allowing virtual board meetings in light of the national lockdown.
 

“We are keeping a close watch on the situation. There has been no such demand from the industry for any specific exemptions. We are also not seeing any rush in National National Company Law Tribunals (NCLTs). Let us see how the situation evolves,” a senior government official said.

 
He also said that the priority for companies currently is to ensure medical assistance and provide relief to those in need.
 
Another official said that companies have transitioned well into working virtually and are allowed to hold meetings online.
 
Some of the exemptions given as part of Covid relief measures last year would come to an end in June 2021. For instance, the exemption regarding dealing with restricted matters such as approval of the annual financial statements, board report, prospectus through video conferencing or other audio-visual means.
 
The government could revisit some of these exemptions and take steps if the situation warrants it, the officials said.

 
Implementation of the company auditor’s report order 2020, which brought about important disclosure requirements, was also deferred by a year to April 2022. 
 
Meanwhile, the ministry of corporate affairs (MCA) has said that spending for setting up makeshift hospitals and temporary Covid care facilities is an eligible corporate social responsibility (CSR) activity.
 
Funds companies spend on awareness programmes and public outreach campaigns regarding the vaccination drive could also be classified as CSR activity.
 
Any contribution made to the Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund set up to provide relief to those affected by any kind of emergency would also be classified as CSR.

 
As part of the relief package, the MCA had permitted waiver of additional filing fees for delayed filings by companies and LLPs. This was applicable until December 2020, allowing such entities to make a “fresh start”.