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CS Professional · Drafting, Pleadings and Appearances · Documents under Companies Act, 2013

Kaveri Power Ltd generates and supplies electricity. Its financial statements omit a matter that the Electricity Act, 2003 does not require to be disclosed. A shareholder alleges the statements therefore fail to give a true and fair view. What is the position under Section 129?

The statements are not treated as lacking a true and fair view merely because of the omission. Section 129(1) provides that for an electricity generation or supply company, matters not required to be disclosed by the Electricity Act, 2003 need not be disclosed to show a true and fair view.

  1. AThe statements are not treated as lacking a true and fair view merely because of that omissionCorrect
  2. BThe statements are invalid unless the omitted matter is disclosed in a note
  3. CThe Registrar must reject the statements and ask the company to refile them
  4. DThe omission is allowed only if the Central Government has approved it in advance

Explanation

The third proviso to Section 129(1) says financial statements are not treated as failing to disclose a true and fair view merely because they omit matters not required by the Electricity Act, 2003, for an electricity generating or supplying company. No advance approval is mentioned, and the omission alone does not invalidate the statements.

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