ISLAMABAD (November 11 2003): The Securities and Exchange Commission of Pakistan (SECP) through an amendment in the Companies (General Provision and Forms) Rules, 1985, has notified qualifications of 'company secretary' to be appointed by listed and single-member companies.
It has also fixed limits for approval of capital expenditure or disposal of fixed assets by directors.
The format of the auditor's report on consolidated financial statements as well as the particulars of subscribers, directors and officers have also been notified.
The notification has been published in official Gazette as SRO 1003(I)/2003 dated October 29, 2003.
These amendments were initially issued for public opinion in official gazette as SRO 263(I)/2003 dated March 17, 2003 and have been finalized after taking into consideration the comments received from different quarters.
The amendments with new forms have also been placed on the SECP website www.secp.gov.pk with download facility.
The main features of the amendments are:
“Qualifications of company secretary – The Companies Ordinance, 1984 as amended through Companies (Amendment) Ordinance, 2002 requires each listed company and single-member company to have a secretary.
The qualifications of the secretary have now been prescribed such that the secretary to be appointed must either be
— member of a recognized body of professional accountants or corporate / chartered secretaries
— or a person holding a masters degree in Business Administration or Commerce or a Law Graduate from a university recognized by the higher Education Commission, with at least two years relevant experience.”
Furthermore, any person who had been engaged by a company as secretary before October 26, 2002, has been allowed to continue in that capacity provided that his experience in that position is not less than five years.
“Approval of capital expenditure etc by the directors – The Companies Ordinance empowers the directors of a company to incur capital expenditure on any single item or to dispose of a fixed asset on behalf of a company by means of a resolution passed at their meeting and according to the prescribed limits.
The limits have now been notified as exceeding Rs 1,000,000 (one million rupees) for capital expenditure on any single item and one hundred thousand rupees as the book value for the disposal of a fixed asset.”
“Auditors' report on consolidated financial statements – The Companies Ordinance requires preparation of consolidated financial statements of the group by the holding company.
This provision entails auditor of the holding company to report on these consolidated financial statements and the auditor of the subsidiary company to review and report on all interim financial statements of the subsidiary company on the prescribed form.
The format of the auditors' report on consolidated financial statements of a holding company has now been prescribed in form 35-C and auditor's review report on the interim financial statements of a subsidiary in Form 35-D.”
“Particulars to be specified by a subscriber, director or an officer – The Companies Ordinance requires each subscriber to the memorandum and articles of association of a company to provide such additional particulars as may be prescribed.
These additional particulars have now been prescribed which include the subscriber's national identity card number or in the case of foreign national, his passport number and in case of a person other than a natural person, the address of its registered office or principal office along with the aforesaid particulars of the authorized representative signing the documents.”
Moreover, the Companies Ordinance required every company to maintain a register of its directors and officers at its registered office.
The particulars for the same have now been prescribed to include in the case of an individual, in addition to the aforementioned particulars of a subscriber, the particulars of any other directorship or other office that he holds; In the case of a person other than natural person, the above particulars for each of its directors or office bearers; and in the case of a firm, the above particulars for each partner, and the date on which each became a partner.