A one-time census of all registered companies to create a frame by eliminating closed down and defunct companies should be conducted. This will also facilitate the estimation of population parameters.
The Registrars of Companies (ROCs), vested with the responsibility of allotting the Corporate Index Number (CIN), should monitor the submission of Annual Reports rigorously for a proper implementation of the Act and for purposes of annual updation of the frame as well as improvement of the database.
In the long run, this process of assigning CINs along with updation in respect of closed down and defunct companies would result in a complete frame. It should be made compulsory through the provisions of the Companies Act to mention the unique code (CIN) in all returns submitted by the companies.
Since some attributes, like listing status, ownership, industrial activity and State of registration are likely to change over a period of time, the CIN should take into account the likely changes in these attributes with the passage of time, to maintain the continuity in information at the individual company level.
The procedure of de-registration should be simplified by incorporating suitable provisions in the Companies Act.
At present, the Department of Company Affairs (DCA) or ROCs are not processing the information contained in the Annual Reports and Balance Sheets. They should be entrusted with the responsibility of processing and dissemination of information in respect of a set of variables for monitoring and policy formulation. To accomplish these tasks, suitable strengthening of the statistical personnel should be provided.
The DCA should also ensure that Annual Reports of companies required by Reserve Bank of India (RBI) ─ whether listed, deemed or private limited – are available to RBI so that further detailed analysis can be conducted. A mechanism for smooth supply of annual reports of all companies, both public limited and private limited, and both listed and non-listed, should be mutually agreed upon by the DCA and RBI.
Standards of Disclosure/Reporting (Para 12.2.6)
The minimum list of variables to be added in the Annual Report or Balance Sheet along with the format of Balance Sheet Abstract (BSA) should be finalised by the Department of Company Affairs (DCA) in consultation with the concerned agencies such as the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), the Central Statistical Organisation (CSO), etc.
A standard format should be formulated for uniform and timely reporting of data and to facilitate electronic processing.
Institutional Arrangement for Non-listed Companies (Para 12.3.2)
Companies having assets or sales over, say, Rs. 50 crores (on the lines of deemed public company in the Companies Act), or having a market share of over 10 per cent in a particular market segment, or those with controlling foreign interest should be brought under some legal obligations to provide for necessary disclosure of annual reports and their accessibility to the public. Such transparency with regard to reporting and disclosure requirements should be adequate, even if not necessarily on par with listed companies.
The DCA should have the primary responsibility of bringing out basic statistics in respect of such companies.