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HYDERABAD, July 8

THE Companies (Amendment) Bill 2003 would make the provisions of the Companies Act more effective and help arrest fraudulent actions of the corporates, market intermediaries and participants such as stock brokers, auditors and financial institutions, according to the Regional Director of Department of Company Affairs (DCA), Mr Samir Biswas.

He said that though the Companies Act was amended several times during the last four decades, the new Companies (Amendment) Bill 2003 is the most significant one with far reaching implications. While the earlier amendments were aimed at keeping pace with the changing corporate needs and challenges, the latest one was influenced by the loopholes found in accounting scams both in global and local corporate world.

Addressing a daylong workshop on Companies (Amendment) Bill, 2003, jointly organised by the Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI) and the Hyderabad Chapter of Cost Accounts here on Tuesday, Mr Biswas said the Bill was aimed at protecting shareholders' interests. Citing the report prepared by the Credit Rating Information Services of India Ltd (Crisil) after analysing the corporate governance practices adopted by a sample of 639 companies, Mr Biswas said Crisil had strongly recommended initiatives for effective implementation of corporate governance.

Further, the detailed recommendations of Naresh Chandra Committee, Joshi Committee and the Joint Parliamentary Committee have led to a larger bill for the amendment of Companies Act.

Stating that several significant amendments were being made to the Act with regard to the role of independent directors, auditors and cost accountants, he said the amended Act would encourage genuine promoters and professionalism in the corporate world, while acting tough on errant entities by way of stringent penalties.

Further, the DCA has recently constituted an expert committee to look into the valuation of corporate assets for mergers, amalgamations and acquisitions. Mr Biswas informed members of FAPCCI and Cost Accountants that the Department was also looking into revising upwardly the sitting fee for directors.

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