CHENNAI: The Ministry of Corporate Affairs will introduce the corporate governance norm on financial reporting in XBRL, or eXtensible Business Reporting Language, by companies only in a phased manner, M.A. Kuvadia, Regional Director, Southern Region, MCA, said on Monday.
Addressing a seminar on corporate governance hosted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Institute of Company Secretaries of India, Mr. Kuvadia said in the first phase, the revised corporate governance guidelines would apply only to companies listed in India and their subsidiaries having a paid-up capital of Rs. 5 crore and turnover above Rs. 100 crore. Again, the norm to report balance sheets and profit-and-loss accounts in the digital language of XBRL excludes banking, power, insurance, non-banking financial companies and their overseas subsidiaries, he said. In one of its recent circulars, MCA has permitted listed companies to file financial statements with additional fees up to November 30 or within 60 days of the due date, whichever is later, he said.
Mr. Kuvadia pointed out that XBRL was nothing but a digital language intended to provide a common and standard electronic format for business and financial reporting. The presentation of financial data in XBRL mode would facilitate analysis at the user’s end with ease, he said. The guidelines for Corporate Social Responsibility (CSR) issued in 2009 stipulating companies to earmark 2 per cent of net profit for CSR is at present mandatory for public sector companies. A similar proposal for private sector companies having a net worth of over Rs. 500 crore, a turnover over Rs. 1,000 crore or net profit over Rs. 5 crore in a year, is at present voluntary and will become mandatory once the Companies Bill 2009 is passed, he said.
R. Sridharan, central council member, ICSI, J. Chandra Mouli, convenor-Finance and Taxation, FICCI, R. Ramamurthy, convenor, CSR panel, FICCI, P. Murari, Advisor to FICCI president, also participated.