You are here: Home » Companies » News
Business Standard

Corp Affairs Ministry amends norms related to buyback offers

Entities can take into consideration unaudited accounts while making calculation for buyback offers

Press Trust of India  |  New Delhi 

Corp Affairs Min amends norms related to buyback offers

To ensure that pricing of offers are based on the company's updated financials, the government has amended rules pertaining to share capital and debentures under the law.

Corporate Affairs Ministry, which is implementing the Act, has introduced a new norm whereby entities can take into consideration unaudited accounts -- that have been subject to limited review by auditors -- while making calculation for offers.

In this regard, changes have been made to the (Share Capital and Debentures) Rules, 2014. These norms are applicable for private companies and unlisted public firms.

"Provided that where the audited accounts are more than six months old, the calculations with reference to shall be on the basis of unaudited accounts not older than six months from the date of offer document which are subjected to limited review by auditors of the company," the notification said.

The move is expected to help in deciding the buyback calculations based on updated financial numbers.

For shares buyback and other securities, earlier only audit accounts that were not older than six months from the date of offer document were to be considered for making the calculations.

With regard to buyback offers, auditors have to send a report to the board of directors of the company stating that they have enquired into the firm's state of affairs.

Among others, the auditors are also required to mention about accounts on the basis of which calculation with reference to buyback is done.

First Published: Sun, March 20 2016. 11:43 IST
RECOMMENDED FOR YOU