Vous êtes sur la page 1sur 11

CSR provisions in The Companies Bill, 2012

January 2013

THE COMPANIES BILL 2012

Former Corporate Affairs Minister, Mr Veerappa Moily introduced the Companies Bill, 2011 on 14th December, 2011 in Parliament Lok Sabha. The Bill was cleared by the Cabinet on November 24, 2011. On 18th Dec 2012 the Bill Amendments was presented by Mr. Sachin Pilot, the current Minster of Corporate Affairs, at the Lok Sabha and got it approved.

THE COMPANIES BILL 2012


The Companies Bill 2012 replaces the Companies Act 1956

Lok Sabha passed it in Winter session - December 18, 2012


Rajya Sabha likely to pass it during Budget Session-February 2013 After Rajya Sabha passes the Bill, the assent of the President of India and the Bills publication in the Official Gazette will be necessary before the Bill becomes as Act most likely from April 1, 2013 The New Companies Bill, 2012 have 29 Chapters, 407 Clauses (Sections) & 7 Schedules

CSR provisions in The Companies Bill, 2012

Corporate Social Responsibility (CSR) has for the first time been recognized in the Company Law. Clause 135 (under Chapter IX Accounts of Companies) of the Companies Bill 2012 deals with Corporate Social Responsibility.

Clause 135 contains 5 sub-clauses with one Explanation.


Schedule VII of the Companies Bill 2012 lists out the CSR activities.

This is the first time where a legal provision is introduced for Corporate Social
Responsibility.

CLAUSE 135 : Corporate Social Responsibility


Who must comply?
Every Company registered under the companies law or any previous laws
(Section 1) If (Section-135): Net worth of rupees 500 crore or more or Turnover of rupees 1000 crore or more or Net profit of rupees 5 crore or more during any financial year

Who will be held accountable? The company will constitute a CSR Committee of the board members consisting of three or more directors At least one committee member shall be an independent director

CLAUSE 135 : Corporate Social Responsibility

What will the CSR Committee do? Formulate and recommend to the Board, a Corporate Social

Responsibility Policy which shall indicate the activities to be undertaken


by the company as specified in Schedule VII Recommend the amount of expenditure to be incurred on the activities Monitor the Corporate Social Responsibility Policy of the company from time to time

CLAUSE 135 : Corporate Social Responsibility

What will be the role of the Board of Directors? Review the recommendations made by the CSR Committee Approve the CSR Policy for the company Disclose contents of the Policy in the company's report/website Shall ensure that the company spends in every financial year, at least two per cent of the average net profits How much will a company be required to spend on CSR? At least 2% of its average net profit made during the three immediately preceding financial years

CLAUSE 135 : Corporate Social Responsibility


What are the activities your company can undertake?

According to Schedule VII, Activities as a Project Mode, which may be included by companies in their Corporate Social Responsibility Policies are: 1. 2. 3. 4. 5. 6. Eradicating hunger and poverty Promotion of education Promoting gender equality and empowering women Health - reducing child mortality, improving maternal health, combating HIV, AIDS, malaria Employment enhancing vocational skills Contribution to PM's fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women Ensuring environmental sustainability Social business projects Such other matters as may be prescribed

7. 8. 9.

CLAUSE 135 : Corporate Social Responsibility


What does a company need to disclose in the Annual Report? The Boards financial report under sub-section (3) of section 134, shall disclose the composition of CSR committee, CSR policy and initiatives Amount of expenditure incurred on Corporate Social Responsibility activities Valid reasons in case of failure to spend the earmarked CSR budget

What is likely in the future

In Budget 2013 is likely to allow some tax-deduction /benefits to companies who spend money for CSR, thus making it attractive for the companies to spend money for CSR. An estimated 2,500 companies fall into this mandatory CSR-reporting category. CSR activities in the first year would be between rupees 9,000 crore and rupees 10,000 crore spent in social welfare.

Thank You

Vous aimerez peut-être aussi