New Companies Bill focus more on CSR

V. Rishi Kumar Hyderabad | Updated on October 30, 2012 Published on October 30, 2012

The Companies Bill 2011, approved by the Union cabinet, lays special focus on corporate social responsibility.

The Act is likely to be passed during the winter session of Parliament. It makes companies answerable towards corporate social responsibility and makes it mandatory for companies with a net profit of Rs 5 crore or more to spend 2 per cent of its profit after tax on CSR, Bhaskar Chatterjee, Director General and CEO, Indian Institute of Corporate Affairs, Ministry Corporate Affairs, said.

Delivering his address at the 13th Annual Greentech Global Conference on Environment and CSR, he said not spending or even failing to report the same in the report to Ministry of Corporate Affairs (MCA) attracts fine of Rs.50 lakh and even imprisonment of 2 years.

The companies are answerable to its shareholders and stakeholders and all those affected by its business.

Cheque-book charity where you give a cheque to a temple or an organisation and forget and think that your CSR activity is over is not CSR. Anything done to your employees is not CSR, it is a human resource activity. Anything done by volunteers of your organisation cannot be counted as CSR.

"We will soon have a meeting with the Governor of Reserve Bank of India urging them to make these rules/guidelines also applicable to all the banks in the banking sector," he said.

Published on October 30, 2012
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