Salient
Features of Companies Bill, 2012 on CSR:
Lok
Sabha on 18th December, 2012 passed Companies Bill, 2012.
Clause
135:
(1)
Every company having net worth of rupees five hundred crore or more, or
turnover of rupees one thousand crore or more or a net profit of rupees five
crore or more during any financial year shall constitute a Corporate Social
Responsibility Committee of the Board consisting of three or more directors,
out of which at least one director shall be an independent director.
(2)
The Board's report under sub-section (3) of section 134 shall disclose
the composition of the Corporate Social Responsibility Committee.
(3)
The Corporate Social Responsibility Committee shall:
(a) 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;
(b) Recommend the
amount of expenditure to be incurred on the activities referred to in clause (a);
and
(c) Monitor the
Corporate Social Responsibility Policy of the company from time to time.
(4)
The Board of every company referred to in sub-section (1) shall:
(a) After taking
into account the recommendations made by the Corporate Social Responsibility
Committee, approve the Corporate Social Responsibility Policy for the company
and disclose contents of such Policy in its report and also place it on the
company's website, if any, in such manner as may be prescribed; and
(b) Ensure that the
activities as are included in Corporate Social Responsibility Policy of the
company are undertaken by the company.
(5)
The Board of every company referred to in sub-section (1), shall ensure
that the company spends, in every financial year, at least two per cent of the
average net profits of the company made during the three immediately preceding
financial years, in pursuance of its Corporate Social Responsibility Policy:
Provided that the company shall give preference to the local area and areas
around it where it operates, for spending the amount earmarked for Corporate
Social Responsibility activities: Provided further that if the company fails to
spend such amount, the Board shall, in its report made under clause (o)
of sub-section (3) of section 134, specify the reasons for not spending
the amount.
Explanation.—for
the purposes of this section “average net profit” shall be calculated in accordance
with the provisions of section 198.
SCHEDULE
VII
Activities
which may be included by companies in their Corporate Social Responsibility Policies
Activities relating to:
(i) Eradicating
extreme hunger and poverty;
(ii) Promotion of
education;
(iii) Promoting
gender equality and empowering women;
(iv) Reducing child
mortlity and improving maternal health;
(v) Combating human
immunodeficiency virus, acquired immune deficiency syndrome, malaria and other
diseases;
(vi) Ensuring
environmental sustainability;
(vii) Employment
enhancing vocational skills;
(viii) Social
business projects;
(ix) Contribution
to the Prime Minister's National Relief 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; and
(x)
Such other matters as may be prescribed.
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