The Parliamentary Standing Committee on Finance has proposed mandatory corporate social responsibility (CSR) by companies as part of changes to the Companies Bill, 2009.
It says every company having a net worth of 500 crore or more, or a turnover of 1,000 crore or more, or a net profit of 5 crore or more, during a year shall be required to spend every year at least 2% of the company's average net profit during the three immediately-preceding financial years, on CSR activities of the company's choosing.
If a company does not have adequate profit or is not in a position to spend the prescribed amount on CSR, the directors of such company are required to make a disclosure and give suitable reasons in their annual report, with a view to checking non-compliance.
It says every company having a net worth of 500 crore or more, or a turnover of 1,000 crore or more, or a net profit of 5 crore or more, during a year shall be required to spend every year at least 2% of the company's average net profit during the three immediately-preceding financial years, on CSR activities of the company's choosing.
If a company does not have adequate profit or is not in a position to spend the prescribed amount on CSR, the directors of such company are required to make a disclosure and give suitable reasons in their annual report, with a view to checking non-compliance.
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