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

Rohit Power Generation Ltd is engaged in generating and supplying electricity. Its statements omit a matter that the Electricity Act, 2003 does not require to be disclosed, though Schedule III would have required it. A member alleges they fail to give a true and fair view. What is the position under section 129(1)?

The allegation fails on that ground. For an electricity generation or supply company, the financial statements are not treated as lacking a true and fair view merely because they omit matters the Electricity Act, 2003 does not require to be disclosed, as section 129(1) provides.

  1. AThe allegation succeeds, since Schedule III applies to every company without exception
  2. BThe allegation succeeds unless the omitted matter is below a materiality threshold fixed by the board
  3. CThe financial statements are not treated as failing to give a true and fair view merely because they omit a matter that the Electricity Act, 2003 does not require to be disclosedCorrect
  4. DThe allegation is decided by the Registrar, who must order a revision of the accounts

Explanation

The second proviso to section 129(1) says the Schedule III requirement does not apply to a company generating or supplying electricity, and the third proviso says its statements are not treated as failing to give a true and fair view merely because they omit matters not required by the Electricity Act, 2003. Hence the allegation fails on that ground alone.

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