India Inc Needs More Clarity on ‘Companies Bill 2012’

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INDIACSR News Network

MUMBAI: The industry captains while discussing the new Companies Bill 2012 have raised many observations on grounds of insufficient clarity of the Bill. During a Conference on the discussion on ‘Companies Bill 2012’ organised by Confederation of Indian Industry (CII), India Inc stated in one voice that the actual draft of rules and regulations which would be based on the Companies Bill will actually give a perspective on what kind of impact it would make on the functioning of the businesses.

CII LogoMr. Nawshir Mirza, Independent Director, Tata Power Limited, said, “The Bill has been passed in the Lok Sabha and is waiting for the nod of Rajya Sabha. About 300 rules and regulations would have to be formed to give actual shape to the Bill. The proposed policy is an outline on the basis of which it would have to be equipped with the effective rules. Once, in the place it would give the India Inc a fair amount of understanding as in what operational and financial changes they ought to make to adhere by the policies.”

Giving an overview of the existing practice over the Bill’s prescription, Mr. Chaitanya Kalia, Partner, Advisory Services, Ernst & Young, said, “About 3000 companies in India are engaged into the Corporate Social Responsibility (CSR) related activities. As per the Companies Bill 2012, the companies will have to disclose the amounts and details of activities on which they have been spent under CSR. The companies engaged into CSR have spent an average of 2 per cent of profits in last three years. About Rs 9,000 crore would be the amount spent on the CSR following implementation of the proposed Companies Bill.”

He added that the Bill will also categorise the mandate on activities which can be classified as the CSR. “Activities towards promoting education, poverty alleviation, gender equality, HIV-AIDS etc. will be at the core of CSR practices as suggested in the Companies Bill,” Mr. Kalia said.

Whereas, Mr. Amrish Shah, Transaction Tax Leader, Ernst & Young, while speaking on the ‘Merger & Acquisitions and Tax Related Implications’ said, “Under the new Companies Bill, the limit of maximum number of members in a private limited company would be increased to 200 from 50. This will improve the private companies’ fund raising capacity and encourage the entrepreneurship. Buyback of shares will be allowed once a year under specific categories and Indian companies will also be allowed to merge with the foreign companies.”

An eminent panel of industry experts too discussed the various details of the Bill and how Industry will be impacted as soon as it is passed by the Rajya Sabha. The panellists included Mr Bharat Vasani ,Chief Legal & Group General Counsel, Tata Sons Ltd; Mr Suhail Nathani Partner, Economic Laws Practice; Mr R N Mukhija, Advisor to the Chairman, Ex President (Operations) & Member of the Board, Larsen & Toubro Ltd and Mr Pramod Gupta, Country Chief Financial Officer, Novartis India Ltd.  Over 150 participants from Industry participated in the Seminar which was well received.

(www.indiacsr.in)

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