The Securities and Exchange Commission of Pakistan (SECP) has issued a new procedure for the approval of capital expenditure and disposal of assets by the board of companies.
The SECP has issued an S.R.O.449(I)/2021 here on Friday to issue draft amendments to the Companies (General Provisions and Forms) Regulations, 2018.
Two cases discussed for the approval of capital expenditure and disposal of assets:
- For the Public interest company and large sized company, the amount of capital expenditure to be incurred on any single item shall be more than 25 million. The amount of book value for the disposal of a fixed asset shall be more than Rs. 5 million or one percent of the total assets of the company.
- For the medium-sized and a small sized company, the amount of capital expenditure to be incurred on any single item shall be more than five million rupees and the amount of book value for the disposal of a fixed asset shall be more than one million or one percent of the total assets of the company.
Provided that any capital expenditure to be incurred on land and building irrespective of the amount, or the disposal thereof, may be made only with the approval of the board.
Save as provided in the aforesaid proviso, it is further provided that any amount of an expenditure or disposal not exceeding the aforesaid limits may be approved by a committee constituted by the board comprising the chief executive officer, the chief financial officer, and at least one member of the board of directors under the general or specific authority of the board, SECP added.
