Deemed Public Company - Companies Law - Letter : No. 32/17/75‑CL‑III,

Letter : No. 32/17/75 CL III, dated 9 9 1975. Subject:- Deemed Public Company The turnover criterion brought in by section 43A by the recent amendment for converting a Private company into a public company contemplates an average over a period of three consecutive financial years. There is nothing in this context to import that the turnover as reflected in the accounts of the company as audited by an auditor appointed in terms of the requirement of the Companies Act or laid before an annual general meeting should only be taken into account. The definition of financial year in section 2(17) is applicable only if there is nothing repugnant to it as may be gathered from the context of the section where that expression occurs. Since the purpose of section 43A is to introduce a fiction whereby a private company becomes a public company, it has to be interpreted in a manner which will serve the concept of the public interest underlying it to the fullest extent possible. To that concept, the holding of the annual general meeting or the circumstances whether accounts are audited or not is not germane stricto sensu. What is germane is the availability of the accounts to the board of directors whereby they may determine for themselves whether they satisfy the turnover criterion or not ? Given the accounts of the three financial years in the sense of three accounting years of the company, a company would attract the provisions of section 43A.