Interpretation of “relevant period” defined in Explanation (a) ‑ Date of applicability of the sub‑section to private companies - Companies Law - Circular : No. 16/75 [32/4/75‑CL‑III],

Circular : No. 16/75 [32/4/75 ‑ CL ‑ III], dated 23 ‑ 6 ‑ 1975. Subject:- Interpretation of relevant period defined in Explanation (a) ‑ Date of applicability of the sub ‑ section to private companies Several representations have been received from various quarters relating to the interpretation of and the date of the applicability of the provisions of section 43A(1A) to the private companies with reference to the Explanation given at the end of the said section. The matter has been examined in consultation with the Department of Legal Affairs and it has been decided that the cases of the companies becoming public company by virtue of sub‑section (1A) of section 43A would fall under one of the three clauses as enumerated under Explanation to the said section, as follows : 1. Companies having the average annual turnover of Rs. 1 crore and above during the relevant period, consisting of three consecutive financial years and whose third financial year does not end prior to 31‑10‑1974, i.e., where the third financial year of the relevant period ended on 31‑10‑1974 or on any date thereafter but not after 31‑1‑1975, will be covered under sub‑clause (i) of clause (a) of the Explanation to section 43A and these companies shall become public companies on and from the expiry of a period of three months from the last date of the third financial year of the relevant period. 2. Companies, whose first or the second financial year, as the case may be, of the relevant period having an average annual turnover of Rs. 1 crore or above does not end prior to 31‑10‑1974, i.e., where either the first financial year or the second financial year of the relevant period is concluded on 1‑2‑1975, will fall under sub‑clause (ii) of clause (a) of the Explanation to section 43A and shall become public companies by virtue of the provisions of sub‑section (1A) of section 43A on and from the expiry of a period of three months from the last date of the third financial year of the relevant period. 3. Companies whose relevant period of three consecutive financial years having an average annual turnover of not less than Rs. 1 crore falls immediately after 1‑2‑1975, i.e., the third financial year of the relevant period ends after 1‑2‑1975, will fall under sub‑clause (iii) of clause (a) of the Explanation to section 43A and shall become public companies by virtue of section 43A(1A) on and from the expiry of a period of three months from the last date of the third financial year of the relevant period.