House panel adopts Companies Bill

Company boards may have at least one woman member if the suggestions on the Parliamentary Standing Committee on Finance examining the Companies Bill were to be accepted.

Written by Nistula Hebbar | New Delhi | Published: June 8, 2012 1:09 am

Company boards may have at least one woman member if the suggestions on the Parliamentary Standing Committee on Finance examining the Companies Bill were to be accepted.

In addition,the committee has suggested that company auditors be appointed by shareholders at every annual general meeting and also a mandatory spend on corporate social responsibility (CSR).

The Bill was being considered at a meeting held on Thursday,with officials of the corporate affairs ministry,piloting the bill arguing in vain for diluting some suggestions.

According to sources,the government officials had argued that since CSR would become a part of the law for the first time anywhere in the world,this clause “could be reviewed” after enactment. Committee members,however,added that looking at the trend where some companies found it difficult to channel funds properly into CSR activities a central funding agency should be set up to park the unspent money. Officials responded that the suggestion had to be reviewed as it involved setting up a central fund.

Spending on CSR remained high on the agenda with another suggestion being adopted that companies with a turnover of more than Rs 100 crore should spend CSR allocations in the local area where the company is located.

Another matter which attracted the attention of the committee was the question of appointment of auditors. The committee said that auditors were to be appointed by shareholders before every AGM,and the appointment would not be left to the board of directors alone.

With the Standing Committee adopting the Bill,the decks have been cleared for its passage in the Monsoon Session of Parliament.

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