Govt plans consolidated accounts for cos

This need for consolidated annual accounts is also imperative since a large number of Indian companies have been opting for overseas listing. “Gone are the days when profit and loss accounts and balance sheets were an inside exercise of accounting department of the company. The taste of stakeholders has changed and the investors want to understand what is said in the balance sheet and what is not said,” Dhall said.

Dhall also said the high-level committee headed by Naresh Chandra was looking into the audit system and the need for random review of accounts. The committee is holding its first meeting on Thursday.

Dhall also mentioned the need to set stringent norms for preferential allotments, employee stock options and other payouts by company managements, adding that increasing instances of discrepancies in these payouts have come to light.

“Preferential allotments as a provision was inserted in the companies act to tackle certain situations like large funds infusion or entering into tie ups for technology transfer. We need to lay down stringent norms for pricing and other norms of such allotments,” he said.

Again, in the case of employee stock option schemes, he said many discrepancies have come to light in the us where these schemes were used by the promoters to offload stakes. “We need to determine how much of total emolument of senior managers can be given in the form of stock options,” Dhall said, adding “we have to see whether there should be a cap on these incomes.”