INDEPENDENT DIRECTORS MAY STAY OFF UNLISTED SMEs

Unlisted Small and Medium Enterprises (SMEs) will be exempted from the proposed new company law’s requirement to reserve one-third of the board seats for independent directors. SMEs will also be spared other compliance requirements in accounting and law. The Institute of Chartered Accountants of India is working in this direction. The accounting profession’s regulator is evolving a stripped down version of accounting standards for SMEs in line with the latest simplified international standard that reduces the accounting guidance applicable to SMEs by more than 85% when compared with the full set of International Financial Reporting Standards. The JJ Irani panel had suggested a separate format of accounts or even a separate standard for small companies.