Cos to give 2% profit for CSR
Sidhartha TNN
New Delhi: India Inc should brace to set aside some of its profit on corporate social responsibility (CSR).
The ministry of company affairs,which is finalizing the new Companies Bill,has accepted a parliamentary standing committees recommendation on the issue.The standing committee on finance headed by former finance minister Yashwant Sinha has proposed that companies with a turnover of Rs 1,000 crore or net profit of Rs 5 crore or more earmark 2% of their net profit for the preceding three years on CSR.
Though corporates and industry chambers had lobbied hard against the move,the government has decided to go ahead with the proposal.It is,however,unclear what really constitutes spending on social responsibility.The committee had left it to companies to decide policy and spending.
While mandating CSR spend,the government had decided against policing and will leave it to companies to implement what the law prescribes.If a company fails to meet the spend,it will have to spell out the reasons for the shortfall to its shareholders.
The CSR spending proposed to be mandated in the new Companies Act would be in addition to what is being prescribed for companies in the mining or the coal sector.For instance,in case of Posco,the environment ministry has asked the Korean company to spend 2% of its annual profit on CSR.
Share And Care
Companies with turnover of 1,000cr or net profit of 5cr to earmark 2% of net profit for the preceding three years on CSR Companies failing to make the spending will have to spell out the reasons to shareholders Coal ministry toying with idea of mandating CSR levy on mining in no-go areas
Sidhartha TNN
New Delhi: India Inc should brace to set aside some of its profit on corporate social responsibility (CSR).
The ministry of company affairs,which is finalizing the new Companies Bill,has accepted a parliamentary standing committees recommendation on the issue.The standing committee on finance headed by former finance minister Yashwant Sinha has proposed that companies with a turnover of Rs 1,000 crore or net profit of Rs 5 crore or more earmark 2% of their net profit for the preceding three years on CSR.
Though corporates and industry chambers had lobbied hard against the move,the government has decided to go ahead with the proposal.It is,however,unclear what really constitutes spending on social responsibility.The committee had left it to companies to decide policy and spending.
While mandating CSR spend,the government had decided against policing and will leave it to companies to implement what the law prescribes.If a company fails to meet the spend,it will have to spell out the reasons for the shortfall to its shareholders.
The CSR spending proposed to be mandated in the new Companies Act would be in addition to what is being prescribed for companies in the mining or the coal sector.For instance,in case of Posco,the environment ministry has asked the Korean company to spend 2% of its annual profit on CSR.
Share And Care
Companies with turnover of 1,000cr or net profit of 5cr to earmark 2% of net profit for the preceding three years on CSR Companies failing to make the spending will have to spell out the reasons to shareholders Coal ministry toying with idea of mandating CSR levy on mining in no-go areas
SANCHITA GUPTA
PGDM 2ND SEM
No comments:
Post a Comment