RBI has amended the Non-Banking Financial (Deposit Accepting) Companies Prudential Norms Directions, 2007 and Non-Banking Financial (Non-Deposit Accepting) Companies Prudential Norms Directions, 2007 requiring every NBFCs to finalize its balance sheet within a period of 3 months from the date to which it pertains.
Above amendments would shorten the time line available to such NBFC for finalization of its financial statements as compared to the time available under the Companies Act, 1956.
The Companies Act 1956 inter alia provides that:
1. Time gap between the close of the financial year of a company and laying of the audited financial statements in its Annual General Meeting (AGM) for approval by shareholders shall not be more than 6 months (9 months in case of the 1st AGM).
2. Every company must hold an AGM once in a calendar year and time gap between two successive AGM cannot exceed more than 15 months.
Circular No. DNBS.PD/ CC.No. 204 / 03.05.002 /2010-11 dated 1 December 2010, Notification No. DNBS. 217 / CGM (US)-2010 dated 1 December 2010 and Notification No. DNBS. 218 / CGM (US)- 2010 dated 1 December 2010, issued by RBI.