NEW DELHI: The corporate affairs ministry has extended the deadline for companies concerned to comply with deposit repayment reserve requirement till September 30 following requests from stakeholders for relaxations in the wake of the coronavirus pandemic. Besides, the ministry, which is implementing the Companies Act, has given extension for companies with respect to complying with depositing 15 per cent of secured debentures.
In a circular issued on Friday, the ministry said it was extending the deadline for the two requirements from June 30 to September 30 “keeping in view the requests received from various stakeholders seeking extension of time for compliance of the subject requirements on account of COVID-19”.
Under the Act, one of the requirements for a company to take deposits is to deposit, on or before April 30 every year, at least 20 per cent of the amount of its deposits maturing during the following financial year. The amount has to be kept in a scheduled bank as a ‘deposit repayment reserve account’.
Another relaxation is with respect to the time for investing or depositing 15 per cent of amount of debentures. As per the law, a company issuing secured debentures has to invest or deposit 15 per cent of the amount of its debentures maturing during the year. This has to be done on or before April 30 every year.
Sandeep Jhunjhunwala, Partner, Nangia Andersen LLP said the ministry has further extended the timelines for compliance related to deposit repayment reserves till September 30, providing an extended relief to companies with these compliances knocking on their door next week.
According to him, the move also considers the close approaching deadline of June-end for the debt-ridden corporates with deficiency of working capital due to the COVID-19 outbreak.
“Extension of timelines is a welcome move that would allow businesses to focus on re-opening and re-establishing their core functions,” he added.
Source: indiatimes.com
