Cement, Energy and Environment

MCA is also expected to include the man– hours spent on voluntary social activity such as teaching and free consultations for social projects as genuine CSR activity. "In many companies, senior executives take up teaching assignments on company's time. The man-hou rs spent on such voluntary work may soon get counted as genuine CSR activity by assigning a value to the man– hours," said another lawyer. Courtesy: The Financial Express, New Delhi, 31.01.2014 Pg. No: 5, 6 CSR: STATES CANNOT TELL FIRMS HOW TO SPEND FUNDS, SAYS MINISTER State governments cannot interfere with companies' independence on corporate social responsibility spending , said Union Minister of State for Corporate Affairs Sachin Pilot. The Union Government had made it mandatory for companies to spend 2 per cent of net profit on CSR only to bring in transparency of corporate role in social development. But companies have the final say in deciding on what they spend their money on, he said. Pilot said the corporate sector had expressed concern that some State Governments were considering asking companies to contribute to the Chief Minister's relief fund. Addressing the inaugural of a conference on corporate governance, he said the rules under the New Companies Act 2013 are being notified in stages and will be ful ly in place by January. Whether it is CSR or decisions on the role of independent directors , the objective is to improve corporate governance to global standards. The law will create the correct environment for sustainable growth of corporate sector. B. Muthuraman, Vice Chairman , Tala Steel, said the corporate sector was committed to CSR, but was worried on the mandatory nature and implementation process. Some State Governments were seeking contributions from CSR funds. Companies , on their part, need to provide human resources and funds to concentrate on CSR as much as on core activities. At the event organized by the National Foundation for Corporate Governance, an agreement was signed between the Institute of Directors, UK, and Indian Institute of Corporate Affairs, to improve capabil ity m corporate governance. Courtesy: . The Hindu Business Line. Chennat. 13.12.2013 Pg. No.: 7 GOVT NOTIFIES RULES FOR CSR The government today notified much-awaited rules for the new "corporate social responsibility" regime, under which companies with sizable businesses would need to spend a minimum of two per cent of net profit for the benefit of the society. The CSR activities will have to be within India, and the new rules will also apply to foreign companies registered here. However, funds given to political parties and the money spent for the benefit of the company's own employees (and their families) will not count as CSR. Listing out the permitted CSR activities, the government said that they need to be undertaken as per approval of the company's board in accordance with its CSR policy and the decision of its CSR committee. The CSR rules will take effect from 1 April , as part of the new Companies Act. They will apply to the companies having at least Rs 5 crore net profit or Rs 1,000 crore turnover or Rs 500 crore net worth. NEW REGIME • CSR rules wi ll apply to the companies having at least Rs.S crore net profit, or Rs.1000 crore turnover or Rs.SOO crore net worth. • CSR activities will have to be within India, and the new rules will al so apply to foreign companies registered here. • Funds given to political parties will not count as CSR • New rules will take effect from 1 April. Such companies will need to spend two per cent of their three-year average annual net profit on CSR activities in each financial year, beginning the next fiscal- 2014-15. For the purpose of deciding the CSR spending eligibility of a company; profit from overseas branches and dividend received from other companies in India wil l be excluded from the net profit criteria . Besides, contributions made "directly or indirectly" to any political party have been excluded from CSR ambit. The CSR policy of a company should also specify that "surplus arising out of the CSR projects or programmes or activities shall not form part of the business profit of a company". I