Corporate Affairs Ministry, which is implementing the Companies 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 buyback offers.
In this regard, changes have been made to the Companies (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 buyback 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.