New rules under Companies bill to be in place by FY'14 end: Ministry of Corporate Affairs

NEW DELHI: The Ministry of Corporate Affairs expects all the rules regarding the Companies bill likely to be in place by the end of this fiscal, after taking into account the suggestions from experts, public and other stakeholders.

A rules advisory committee comprising members from leading industry chambers, dignitaries, experts and lawyers among others, is currently working on draft rules and the same are expected to be put forth on MCA website for public comments by the end of this month itself, a senior ministry official said.

The suggestions on draft rules would be invited for a period of 45-60 days after which the rules advisory committee would gather all the comments and see to it as to how much the suggestions can be included.

"The basic tenancy of the rule would be transparency and disclosure and as far as possible we will try to take in as many views as possible," Ministry of Corporate Affairs Joint Secretary Renuka Kumar said adding "hopefully by April 1, 2014 the entire process would be complete."

Parliament on August 8, passed the much-awaited Companies Bill which aimed at protecting the interest of employees and small investors, with the government saying the "historic" measure will give impetus to growth and bring transparency. The Companies Bill, would replace the nearly 50-year-old Companies Act.

The new law requires companies that meet certain set of criteria, to spend at least two per cent of their average profits in the last three years towards corporate social responsibility (CSR) activities.

On the CSR provision of the Companies Bill, she said it a a leap of faith on the corporate sector.

"Some of the biggest industrial houses are giving large part of their profits to CSR. Voluntarily they have been doing. I do not see there is a need now to monitor this on a micro level basis where the money is being spent," Kumar said on the sidelines of a National Conference on Companies Bill 2013.

"We give them a broad mandate because all of us feel that it is time to legislate and we fully trust our corporates to really take it forward and it is leap of faith in the corporate sector and we expect them to do a great job as they have already been doing. We have a very simple reporting format," she added.