With enhanced responsibility on auditors and more stringent code of conduct for the directors, the 'Companies Act 2013' is going to be more facilitative and streamlined than its previous version. The new law is slated to strengthen the concept of the shareholder, stated Dinesh Agrawal, Chairman, CII Chhattisgarh State Council.
He said that the new Act, effective from this fiscal year i.e., April 1, 2014, is going to strengthen accounting standards and shareholder rights while making it mandatory for companies with market capitalization of more than Rs 500 crore to spend 2 per cent of their annual net profits on corporate social responsibility (CSR).
Agrawal was addressing a Workshop on 'Companies Act 2013' organized by the Confederation of Indian Industry (CII), Chhattisgarh here on Saturday.
O P Singhania, Convener, CII Economic Affairs, Finance & Taxation Panel and Managing Partner, O P Singhania & Company during setting up the theme said that The 'Companies Act 2013' introduces significant changes in the provisions related to governance, e-management, compliance and enforcement, disclosure norms, auditors and mergers and acquisitions.
Also, new concepts such as one-person company, small companies, dormant company, class action suits, registered valuers and corporate social responsibility have been included. The new Companies Act 2013, which replaces the erstwhile Act of 1956, is a game changer for Indian Companies.
With the growing participation of investors and other stake holders in companies, the question of transparency in deals with related parties has often been a topic of much debate and discussion. To increase the degree of transparency in loans / Deposits and Related Party Transactions, the 'Companies Act, 2013' placing the onus on board of directors to review, approve and explain such transactions to shareholders and in some cases seeks their approval.
Failure for non-compliance or default attracts huge penalty and also personal liability on directors/officials of the company. Apparently enunciation of the provision of the Sections and Rules of The 'Companies Act, 2013' has been put on a fast track and may be difficult to comprehend at the users’ end.
Bhaswar Sarkar, Partner, SR Batliboi & Co llP discussed on analysing the importance of provisions of the new 'Companies Act 2013' and Auditing. Himanshu Patel, Partner, Deloitte Haskins & Sells llP spoke on 'Related Party Transactions', CSR under new 'Companies Act 2013' & their related tax Impacts.
Arabinda Debta, Senior Company Secretary, and S A Habib, AGM (HR) form TRl Krosaki Refractories limited shared on the recent changes in the Companies Act with respect to CSR and Best Practices on CSR Activities. The workshop witnessed the presence of Directors, CEOs, CFOs and CSR Heads of Companies.