A government company is a company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, a State Government, or both. The government company is subject to the provisions of the Companies Act, 2013 (“the Act”), but it has a distinct audit regime.
The CAG Audit
The Comptroller and Auditor General (“CAG”) appoints the auditor of a government company, and the auditor submits the report to the CAG. The CAG has the power to conduct a supplementary audit, and the CAG's report is laid before the Parliament or the State Legislature.
The CAG can issue directions to the auditor under Section 143(5), and the auditor must comply with the directions. The CAG's oversight is a constitutional function, and it is designed to ensure the accountability of the government company.
The Board and the Governance
The government company must have a board of directors, and the directors are appointed by the government. The company must comply with the provisions relating to the independent directors, the audit committee, and the nomination and remuneration committee. The company is also subject to the RTI Act and the CVC guidelines where applicable.
The Compliance
The government company must file the annual return, the financial statements, and the other statutory returns. The company must also comply with the CAG's audit requirements and the directions issued by the administrative ministry. The compliance is monitored by the ministry and the CAG.
Call to Action
Anuj Desai & Associates advises government companies on the audit and compliance regime—from the CAG audit and the directions to the board governance and the statutory filings. If your government company needs assistance with its compliance, we can help.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
🔗 linkedin.com/in/ca-anuj-desai-122547230
Article 177