Ministry of Corporate Affairs placed on its web site a DRAFT notification on 4th September 2015 which proposed certain exemption to government companies producing defence equipments including space research from certain Para of Schedule III of the Companies Act, 2013.
This Notification shall come into force from the date of its publication in official Gazette but shall be effective only for financial statements prepared in respect of financial year ending on or after 31st March 2016.
There is no exemption to these companies for financial statements prepared in respect of financial year ending on 31st March 2015.
According to sub – section (6) of Section 129, the Central Government may, on its own or on an application by a class or classes of companies, by notification, exempt any class or classes of companies from complying with any of the requirements of this section or the rules made thereunder, if it is considered necessary to grant such exemption in the public interest and any such exemption may be granted either unconditionally or subject to such conditions as may be specified in the notification.
Central Government in present notification granted this exemption conditionally.
Following Para of Schedule III of the Companies Act, 2013 shall not apply to these companies:
- 5(viii)(c), and
- The Board of Directors of the company has given consent with regard to non – disclosure of information related to these paragraphs, as may be applicable to the company.
- The company shall disclose in the Notes to Accounts forming part of Balance Sheet and Profit & Loss Account, the fact of grant of exemption under this notification.
- The company shall comply prescribed Accounting Standards (AS) [Should not we read Indian Accounting Standards (Ind – AS) as well?]
- The company shall maintain and file such information as may be prescribed or called for or required by the government or the Reserve Bank of India or any other regulator.
Here, any term “any other regulator” is not prescribed and therefore include any regulator which may have jurisdiction over the company in any manner like taxation authorities.
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