The revised Companies Bill, which is expected to be introduced in the winter session of Parliament, has limited the number of companies an auditor can serve to 20. It has also brought in more clarity on criminal liability of auditors.
An official release said the amendments are expected to make the Companies Bill, 2011 "serve still better the interests of the corporates, investors and other stakeholders".
"The proposed legislation will bring the law on the subject of corporate functioning and regulation in tune with the global best practices so that there is further improvement in corporate governance in the country through enhanced accountability and transparency," the release said.
A provision has been introduced to make expenditure on Corporate Social Responsibility (CSR) mandatory. If companies are unable to meet CSR norms, they will have to give explanations. Also, companies should give preference to local areas while spending on CSR activities.
According to the release, the new proposals include annual ratification of appointment of auditors for five years and introduction of a new clause related to offence of falsely inducing banks for obtaining credit.
Cabinet approves hospital patient care allowance
In good news for about two lakh central government employees, the union cabinet today approved doubling of existing rates of hospital patient care allowance.
Besides, it has decided to revise the existing rate of risk allowance given to central government employees engaged in hazardous duties across the country.
"The cabinet today approved revision of rates of Risk Allowance. Hospital Patient Care Allowance and Patient Care Allowance payable to about two lakh entitled central government employees are to double from existing rates with effect from September 1, 2008," an official statement said.
The decision will result in considerable financial savings as compared to the Risk Insurance Schemes or Packages, the statement said.
The financial implication of doubling the rate of Risk Allowance, Hospital Patient Care Allowance and Patient Care Allowance would be Rs 42.16 crore per annum, as against Rs 503.26 crore plus service tax (approximately) for implementing the risk insurance package.
"The amount of Risk Allowance, Hospital Patient Care Allowance and Patient Care Allowance would be automatically raised by 25 per cent every time the Dearness Allowance on the revised pay structure goes up by 50 per cent," it said.