CFOs post to be mandatory for companies

New Delhi: The central government has recommended that it be made mandatory for companies with a paid-up capital of Rs 5 crore and above to appoint a chief financial officer (CFO).

At present, listed companies that have audit committees need to appoint a CFO. The committee, headed by R D Joshi, director-general (investigation and registration), was constituted by the government to examine those provisions of the Companies Bill 1997, which are yet to be adopted.

The committee submitted its report to the secretary, department of company affairs on 25 September 2002. "Though the world has risen to this concept now, in India the pending 1997 Bill had already thought about it," say sources.

In fact, the 1997 Bill has proposed that every listed company, which has a paid-up capital of Rs 3 crore or more, should have a whole-time qualified financial officer called CFO, who shall either be a member of the Institute of Chartered Accountants of India or the Institute of Cost and Works Accountants of India.

The CFO will be responsible for the proper maintenance of the books of accounts of the company, ensuring disclosure of all required information indicated in the prospectus or any other offer documents, and the provisions of this Act relating to the accounts of the company are complied with, the Bill has suggested.