TMI BlogAmendment in Schedule III to the Companies Act – what should be effective date- there is no harm in becoming more transparent voluntarily and as soon as possible.X X X X Extracts X X X X X X X X Extracts X X X X ..... Amendment in Schedule III to the Companies Act – what should be effective date- there is no harm in becoming more transparent voluntarily and as soon as possible. - By: - DEV KUMAR KOTHARI - Corporate Laws / IBC / SEBI - Dated:- 16-9-2021 - - Vide Notification dated 24th March, 2021 vide File no.17/62/2015- CL-V- Vol I issued / signed by K.V.R. Murty Joint Secretary to the Government of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia the Central Government have made several amendments in Schedule III to the Companies Act with effect from 1st day of April, 2021. Important dates- Notification is dated 24.03.2021 and effective date mentioned is 01.04.2021. This means that the notification has been issued before commencement of new FY on 01.04.2021 The purpose of amendments: Not mentioned in notification: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is surprising that the notification does not speak about any of objectives, purposes and need of such amendments. The amendment, is made just in exercise of statutory powers. This is, with due respect, is not in accordance with good policies for legislation. Any provision made and any amendment to it must be with some definite purpose, object and to serve the same. Without exploration of objec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tives, arbitrary amendment and provisions can be framed. That is not expected in a democratic set-up. On reading of various amendments and the amended Schedule III author find that the purposes of these amendments can be many , including the following important aspects of companies and their management about disclosure policies: Provide more information in financial statements, many of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which have become relevant recently and many are such which were considered important for long time. Many information intended to be provided are now available on websites of other authorities and therefore, it is possible for companies to gather relevant information and provide such information for the users of financial statements. Any adverse information for the company temporar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or long-term can be useful for the users of financial statement. To disclose information more in alignment with amendments relating to Accounting and auditing Standards and reporting requirements. Many people in control of companies are in practice of providing minimum information, there is no inclination to be transparent and share relevant information with stake holders, if it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in favour of company or its management. Therefore do not want to make voluntary disclosures, rather will try to hide information as much as possible. A statutory compulsion to make information available in standard forms is desirable. Provision is procedural and does not affect any vested rights of company: Amendment relating to preparation, presentation of financial information i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a procedural aspect. The purpose of amendment is to make more information available to stake holders. Providing more information cannot be considered as affecting rights of company, to hide or withhold information from stake holders. Right of stake holders for more relevant information: More information to be disclosed in fact confers more rights of relevant information for stake ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lders and people who can use statements for decision making about company to make investment or to divest investment or to continue with investments or to take remedial action to save investments etc. Therefore it cannot be said that providing more information as required under law is going to be adverse to any company or its stake holders. In case any such information is of nature that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can adversely affect company or its business and which does not serve any public purpose or purposes of stake holder, then company can take suitable steps for exemption from providing such information or can withhold such information with proper reasoning and disclosures and seek permission to withhold such information. Authors point of view: In view of above discussions, author is of view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, to be more concerned to share information any financial statement which are drafted and approved by the Board of Directors on or after 01.04.2021 should comply with the requirements of amended Schedule III to the Companies Act, 2013, particularly if any information so required is important for stake holders it must be shared with them. In search on web, author found that some learned p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersons have expressed view that the amendment will apply to accounting year starting on or after 01.04.2021. May be this can be treated as escape route, however, there is no harm in becoming more transparent voluntarily and as soon as possible. Relevant notification and amended Schedule III are available on this website, and other websites like that of MCS readers may refer to the same. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... readers are requested to send their views. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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