From correspondents in Gujarat, India, 11:00 PM IST

Shareholders of the state-owned Gujarat Industries and Power Co Ltd have empowered the company board to allocate up to Rs.500 million (Rs.50 crore or about $12.5 million) for social welfare or rural development projects this fiscal.

This was one of the two special resolutions on corporate social responsibility activities adopted by GIPCL shareholders at the company's recent annual general meeting, despite the representative of UTI Asset Management Co objecting. The UTI arm said the resolutions were not in shareholders' interest as these would "lead to a substantial outflow from the company'.

UTI and mutual funds hold 6.29 percent in GIPCL.

With this, transfer of funds to the Gujarat State Economic Development Society (GSEDS) has become easier for GIPCL. Some time back, the state government had specifically asked another state-owned firm, the Gujarat State Fertiliser Co, to contribute to GSEDS.

However, a GIPSL official did not confirm whether GSEDS would be the beneficiary, and merely said: 'It is up to the board to decide to whom the funds will be sent.'

In a regulatory statement Friday, GIPCL said the contributions will be governed by the Section 293 (1) (e) of the Companies Act. This provision allows companies to contribute to any charitable organisation that works towards socio-economic cause.

(Staff Writer, © IANS)