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DPE weighing exemptions

Panel to reach broad consensus on number of exemptions under new companies Act

The department of public enterprises (DPE) has called a meeting of CPSE chiefs on May 9 in Gangtok to finalise the list of exemptions applicable to the public sector under the Companies Act 2013.

CPSEs enjoyed 62 exemptions under the erstwhile Companies Act of 1956. The DPE is now exploring how many of those exemptions are still relevant and if new ones may be needed by PSUs in a fast-globalising business environment.

A committee headed by Deepti Gaur Mukherjee, joint secretary in the DPE, has been mandated to examine the merit of exemptions in the changed business environment. The panel is expected to reach a broad consensus on required exemptions soon.

Despite the enactment of the Companies Act, 2013, central public sector enterprises can retain exemptions that were available to them under the Companies Act, 1956. The DPE has traditionally followed a consultative process to finalise exemptions so that PSUs should not feel any operational difficulties.

The replaced Companies Act, 1956, empowered the central government to modify the laws in relation to government companies from time to time. But most provisions of the new Act will be uniformly applicable to companies, including CPSUs.

According to experts, two matters of immediate concern to the central PSUs could be rotation of auditors and restatement of accounts.

By the Companies Act, 2013, the Comptroller and Auditor General (CAG) of India will appoint the statutory auditor for all government companies. This appointment must be ratified by the shareholders every year in the annual general meeting.

Experts said the new Act has provisions for restatement of financial statements and reopening of books of accounts of companies, a move that would help government companies, if their financial statements are either qualified by auditors or modified to highlight matters of uncertainty.

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First published on: 09-04-2014 at 03:06 IST
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