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<ul><li>The Companies Amendment Bill was approved by the Cabinet, said that any amount left unspent should be transferred to a special account called the ‘Unspent Corporate Social Responsibility Account’. </li><li>Government will be taking over the money they are asked to spend, and transferred to its own fund. </li><li>Indian companies are known to spend as much as ₹15,000 crore<a href="https://www.livemint.com/companies/news/companies-will-have-to-pay-unused-csr-money-into-state-corpus/amp-1563381925491.html?__twitter_impression=true"> annually on</a> corporate social responsibility. </li></ul> It is common for most companies to miss out on fulfilling the government mandate to spend a certain amount of funds on social activities. And, soon government will be taking over the money they are asked to spend, and transfer to its own fund, as per the amendments to the <keyword id="1850989" type="PERSON" weightage="20" keywordseo="Companies-Act-2013">Companies Act 2013</keyword>, approved by the Cabinet. Most companies, <a href="https://thewire.in/business/one-in-three-bse-100-firms-falls-short-in-mandatory-csr-spending">including publicly listed </a>companies take the 2013 mandate of the government casually. As per the norm, companies with a net profit of over ₹5 crore or revenues of ₹1,000 crore or net worth of ₹500 crore; should spend 2% on their profits on corporate social responsibility (CSR). Six years on, few companies take it seriously though most top companies like Reliance Industries, L&amp;T and all public sector companies do take the efforts to ensure money flows to the right causes. Those who spend regularly tend to focus on education, rural development and healthcare. The Companies Bill amendments say that any amount left unspent should be transferred to a special account called the ‘Unspent Corporate Social Responsibility Account’. “Such amount shall be spent by the company in pursuance of its Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer,” the draft amendment said. Indian companies are known to spend as much as ₹15,000 crore<a href="https://www.livemint.com/companies/news/companies-will-have-to-pay-unused-csr-money-into-state-corpus/amp-1563381925491.html?__twitter_impression=true"> annually on</a> corporate social responsibility.

Indian companies will have to hand over the unspent money in the social responsibility fund to the government

New Delhi, Mar 16 () The corporate affairs ministry has sought public comments on proposed changes to rules governing Corporate Social Responsibility (CSR) policy under the companies law. "In order to operationalise the Companies (Amendment) Act, 2019, the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020 has been drafted for carrying out amendments in the Companies (CSR Policy) Rules, 2014," the ministry said in a notice. Under the companies law, certain classes of companies have to shell out at least two per cent of the average net profits, made during the three immediately preceding financial years, towards CSR activities. The Companies (Amendment) Act, 2019 amended Section 135 dealing with CSR and was published in the official gazette on July 31, 2019. Among other changes in the rules, the ministry has proposed setting up the 'National Unspent Corporate Social Responsibility Fund'. The fund would be utilised for the purposes of undertaking CSR projects in the areas or subjects specified in Schedule VII of the Act. "... until such fund is created the unspent CSR amount in terms of provisions of sub-section (5) and (6) of Section 135 of the Act shall be transferred by the company to any fund as specified in schedule VII of the Act," as per the draft rules. Under Section 135, every company having net worth of at least Rs 500 crore, turnover of Rs 1,000 crore or more, or a minimum net profit of Rs 5 crore during the immediately preceding financial year has to make CSR expenditure. Comments on the proposed changes in the rules have been sought till March 28. RAM MKJ

Govt to amend CSR rules under companies law

New Delhi, Feb 16 () More companies in India are complying with corporate social responsibility norms under the Companies Act, 2013, with 76 per cent firms having spent 2 per cent or more of their profits on such initiatives during 2019, according to a report. The findings of the 'India CSR Reporting Survey 2019', compiled by KPMG in India, that covered 100 companies also revealed a 150 per cent rise in the number of firms that have committed to carry forward 2 per cent of the unspent amount. The Companies Act which came into effect from April 1, 2014 stipulates that firms with a net worth of Rs 500 crore or more, or a turnover of Rs 100 crore or more, or a net profit of Rs 5 crore or more during the immediately preceding financial year are required to spend 2 per cent of their profits on corporate social responsibility (CSR) programmes. Eligible companies need to form a CSR committee, formulate a policy, and implement projects in alignment with Schedule VII of the Act. CSR-related disclosures need to be made in the annual report in the format prescribed by the Act. According to the report, there has been a 325 per cent increase in the number of companies that have disclosed details of outreach in annual report. Besides, 30 per cent firms studied in the report have had more than three CSR committee meetings. "While the overall CSR spending is increasing, it is also heartening to observe the increase in number of companies going beyond the 2 per cent mandate and even companies who are not required to spending allocating budgets for CSR and spending," said Santhosh Jayaram, Partner and Head, Sustainability and CSR Advisory at KPMG in India. RSN ABM

More firms in India complying with CSR norms under Companies Act: Report

New Delhi, Jan 29 () In a move that will help lessen the burden on the National Company Law Tribunal (NCLT), the government has notified the rules for winding up of companies under the companies law.
 The Corporate Affairs Ministry has notified the Companies (Winding Up) Rules, 2020, which would be effective from April 1.
 Petitions for winding up of companies are subject to various conditions, including thresholds on turnover and paid-up capital.
 Akila Agrawal, Partner &amp; Head (M&amp;A) at law firm Cyril Amarchand Mangaldas, said the rules seek to inter-alia reduce the burden of the NCLT by enabling summary procedures for liquidation to be filed with the central government.
 "Though the draft rules had made this available only for small companies, the final rules make it available to companies that have assets of book value not exceeding Rs 1 crore; and have not taken deposits beyond Rs 25 lakh or have no secured loans beyond Rs 50 lakh or turnover beyond Rs 50 crore or paid up capital beyond Rs 1 crore.
 "A large part of the procedure applicable to regular companies continues to be applicable to the companies that can opt for the summary procedure. It is therefore unclear if the process will be fast tracked merely by shifting the jurisdiction to the central government," she noted.
 Currently, voluntary liquidation cases are primarily taken up under the Insolvency and Bankruptcy Code (IBC).
 The rules have been notified under the Companies Act, 2013, which is implemented by the ministry. RAM MR

Govt notifies rules for winding up of companies under Cos Act

<ul class="summary-list"><li>Whole Foods didn't break the law when it banned workers from wearing BLM slogans, a federal judge ruled.</li><li>In some cases, workers were disciplined for wearing face masks and pins with BLM slogans.</li></ul>Whole Foods didn't break the law when it banned workers from wearing apparel and accessories with Black Lives Matter slogans and in some cases disciplined them for breaking this policy, a federal judge has ruled.From early June 2020, following the <a target="_blank" href="https://www.businessinsider.com/george-floyd-protests-defining-history-politics-election-black-lives-matter-2020-6">killing of George Floyd</a>, some Whole Foods staff starting wearing items including face masks, pins, jewelry, and T-shirts with BLM phrases such as "I can't breathe," "BLM," and "Black Lives Matter."Managers and supervisory staff at the Amazon-owned retailer told workers that this <a target="_blank" href="https://www.businessinsider.com/whole-foods-black-lives-matter-constitutional-rights-violated-first-amendment-2022-1">violated the company's dress code</a>, and generally told them that they could either remove the item in question or clock out and go home early, which incurred attendance or dress-policy violations, allegedly leading to discharges in some cases, per the case proceedings. Some employees staged walkouts after being told they couldn't wear accessories with BLM slogans.<div type="image" title="Whole Foods" height="1646" width="2500" msid="106216116" hostid="261" sizebytes="203756"></div>In a summary of the case, Ariel L. Sotolongo, an administrative law judge for the National Labor Relations Board, said that the grocery-store chain hadn't disputed that it had banned staff from wearing BLM messaging and disciplined them for violating this policy. Instead, the case focused on whether this ban broke <a target="_blank" href="https://www.nlrb.gov/about-nlrb/rights-we-protect/whats-law/employers">Section 7 of the Labor Relations Act</a>, which says that the wearing of some items related to employment conditions like union buttons and T-shirts is a protected concerted activity, and whether disciplining staff based on this was unlawful, Sotolongo wrote.Whole Foods' uniform policy had told staff that to wear company-branded shirts or ones "without any visible slogan, message, logo or advertising on them," and said only company hats were allowed.Barbara Smith, the retailer's vice president of team member services, testified that after workers started wearing items with BLM messaging, the company's leadership agreed that this violated the dress code and discussed how to enforce the policy while acknowledging the delicacy of the subject and respecting staff's opinions.The NLRB General Counsel, representing the affected Whole Foods staff, argued that workers wore items with BLM messaging at work to show solidarity with their Black colleagues and show opposition to systemic racism in the workplace. The General Counsel also said that some employees saw Whole Foods' ban of BLM messaging as discriminatory and racist, and therefore their defiance of the policy was protected activity.But Sotolongo wrote that interviews with workers suggested that the majority started donning BLM messaging to show support for the movement generally, without any specific goal connected to their employment or working conditions. Workers only started looking for a way to connect the items to their employment to provide legal cover after Whole Foods starting disciplining staff for violating the policy, Sotolongo wrote, citing online messages between workers.Sotolongo also wrote that the "vast majority" of employees disciplined for wearing BLM messaging were not Black."The fact that BLM may be a movement of great significance to African Americans, and that its goals are valid, does not mean that a rule prohibiting the displaying of such message at work is 'racist,'" he wrote. "The fact that WFM in the past had permitted and even supported employees donning messages is support other social-political causes, such as the LGTBQ movement, does not support the implication that the banning of BLM messaging was racially motivated."Sotolongo concluded in a decision on Wednesday that Whole Foods workers who wore items with slogans related to the BLM movement weren't engaged in protected activity under Section 7 of the Act and that disciplinary actions taken by the retailer, including verbal and written warnings, didn't violate the Act.But Shannon Liss-Riordan, the lawyer representing the workers, told <a target="_blank" href="https://www.nytimes.com/2023/12/21/business/whole-foods-black-lives-matter.html">The New York Times</a> in response to the ruling that if employers believed that they were taking an action to improve the terms and conditions of their workplace, that should count as protected activity.Sotolongo did, however, note that the uniform policy Whole Foods had in place from 2013 to 2020 violated part of Section 8 of the Act because it was "overly broad" and didn't state that staff could wear union insignia. Barbara Smith, the retailer's vice president of team member services, had previously testified that the policy allowed workers to wear union insignia like pins and buttons.Whole Foods told <a target="_blank" href="https://edition.cnn.com/2023/12/21/business/whole-foods-ban-black-lives-matter/index.html">CNN</a> that it was "pleased" with the outcome, adding that it was focused on creating "both a safe and inclusive workplace for all."<a target="_blank" href="https://www.businessinsider.com/whole-foods-new-dress-code-policy-employee-reactions-2020-10">Whole Foods updated its dress code</a> in late 2020, which explicitly prohibited employees from wearing face masks with prints, slogans, or logos bigger than one inch.

Whole Foods didn't break the law by punishing workers who wore pins and face masks with BLM slogans, judge rules

(Eds: Adding details) New Delhi, Mar 23 () Spending by corporates to deal with the coronavirus outbreak will be considered as CSR activity under the companies law, the government said on Monday. In India, over 400 people have been infected by the coronavirus and at least seven people have died, while many states have announced lockdown to curb spreading of the infection. Under the companies law, certain classes of profitable entities have to shell out at least 2 per cent of their three-year annual net profit towards Corporate Social Responsibility (CSR) activities in a particular financial year. "It is hereby clarified that spending of CSR funds for COVID-19 is eligible CSR activity," the corporate affairs ministry said in a circular on Monday. The ministry is implementing the Companies Act. CSR funds could be utilised for various activities related to COVID-19, including those relating to preventive healthcare and sanitation, as per the circular. A senior official said the CSR funds could be used for direct expenditure to contain the spread, morbidity and mortality due to the disease. Corporate Affairs Minister Nirmala Sitharaman tweeted the circular. "In view of the spread of novel #CoronaVirus in India, its declaration as pandemic by the WHO, and decision of Government of India to treat this as notified disaster, it is hereby clarified that spending of CSR funds for COVID-19 is eligible CSR activity...," she tweeted. Consultancy Corporate Professionals Group Founder Pavan Kumar Vijay said the ministry's clarification on CSR was a welcome step. "For the purpose, it is suggested that the government may immediately create a portal on which specific requirements by way of equipment, medicines, etc may be posted and the corporates may be permitted to contribute in cash or kind towards those specific requirements. This will ensure coordinated efforts and avoid duplication," he said. Under Section 135 of the Companies Act, 2013, every company having net worth of at least Rs 500 crore, turnover of Rs 1,000 crore or more, or a minimum net profit of Rs 5 crore during the immediately preceding financial year has to make CSR expenditure. RAM RVKRVK

Companies' expenditure to tackle COVID-19 to be considered as CSR activity: Govt

New Delhi, Dec 9 () The Corporate Social Responsibility (CSR) is a board-driven process and the board of the company is empowered to decide, implement and monitor such activities, Union minister Anurag Singh Thakur said in Lok Sabha on Monday.
The union minister of state for finance said a company can also undertake its CSR activities through a registered trust or a registered society or a Section 8 company as per Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Rules, 2014.
"Corporate Social Responsibility (CSR) is a board-driven process and the board of the company is empowered to decide, implement and monitor the activities undertaken as per Schedule VII of the Companies Act, 2013 taking into consideration the recommendation of its CSR committee," he said during the Question Hour.
Thakur said the entire CSR architecture is disclosure- based and CSR mandated companies are required to file details of CSR amount spent annually in MCA21 registry. Completion status of CSR projects or activities are not maintained by the government.
 Whenever, any violation of CSR provisions is noticed, action against such non-compliant companies is initiated as per the provisions of the Companies Act, 2013 following due process of law, he said. ACB AAR

CSR a company board's driven process: Minister Thakur

The <keyword id="905742" type="ORGANIZATION" weightage="80" keywordseo="Narendra-Modi-led-government">Narendra Modi-led government</keyword> will not let companies get away easily if they do not spend the mandated 2% of their profits on Corporate Social Responsibility (<keyword id="6354502" type="ORGANIZATION" weightage="80" keywordseo="CSR">CSR</keyword>) activities as specified by law. The government is planning to add more teeth to the Companies Act 2013 by introducing the penalty clause for companies that miss this target spending repeatedly. At present, non-compliance of CSR rule isn't penalized by the Companies Law, and those unable to spend the stipulated amount can get away with some justification. 
 
“Under the current law, there's no mandatory obligation on the company, but a responsibility is cast upon the board members. In case companies repeatedly fail to do so for two or more years, they should be penalized. We can’t leave any grey areas in law,” a senior government official told ET. 
 
Under the Companies Act 2013, a company must spend 2% of its average net profit in the preceding three years on CSR if it has a turnover of Rs 1,000 crore or more, or net worth of Rs 500 crore or more, or net profit of Rs 5 crore or more. 
 
The new law, which came into effect on April 1, 2014, says if a company isn't able to give a satisfactory explanation about not spending on CSR activities, the corporate affairs ministry, at most, can question the roles and responsibility of its directors, but can’t act beyond that. “The quantum of penalty in case of non-compliance hasn’t been worked out,” the official added. However, the industry and corporate lawyers are critical of the government’s proposal of penalising in case of repeated non-compliance. 
 “A better proposition would be to provide <keyword id="547488" type="UNKNOWN" weightage="80" keywordseo="tax-incentives">tax incentives</keyword> to corporates, effectively complying with the CSR obligations,” a senior executive of a multinational told ET. 
 Around 14,000 companies are expected to spend about Rs 15,000 crore on various social projects under the mandatory CSR spending. The government has provided a list of activities that qualify as CSR, which include measures to eradicate hunger, promote education and rural <keyword id="6356028" type="COMPANY" weightage="80" keywordseo="Sports">sports</keyword>, protection of heritage, and environmental sustainability. 
 The companies which fail to spend the entire 2% on CSR activities can also transfer the remaining amount to the <keyword id="71" type="POSITION" weightage="60" keywordseo="Prime-Minister">Prime Minister</keyword>’s relief fund. “The government expects companies to abide by the spirit of the legislation, which is currently enacted on the principle of 'comply or explain', and does not have any penal provisions. If the compliance levels are seen to be low, the corporate affairs ministry would consider introduction of penalties,” said Sai Venkateshwaran, Partner and Head -Accounting Advisory Services, <keyword id="50041" type="CITY" weightage="80" keywordseo="KPMG">KPMG</keyword> in India.

Narendra Modi-Led Government Plans To Penalise CSR Defaulters Under Companies Act 2013

Hidden investors took over Corizon Health, a leading prison healthcare company. Then they deployed the Texas Two-Step.

The government has made some changes in the norms meant for <keyword id="113603" type="ORGANIZATION" weightage="100" keywordseo="corporate-social-responsibility">Corporate Social Responsibility</keyword> (<keyword id="6354502" type="ORGANIZATION" weightage="100" keywordseo="CSR">CSR</keyword>) activities under the <keyword id="6390099" type="COMPANY" weightage="80" keywordseo="Companies-Act">Companies Act</keyword>, under which, certain class of profitable companies are required to spend at least 2% of their three-year annual average net profit towards CSR activities. 
 
According to the Act, companies are allowed to build CSR capacities for their own personnel through other institutions on the condition that such expenses do not surpass 5% of the total amount spent on social welfare activities in a financial year. The Corporate Affairs Ministry has said that 5% cap would include "expenditure on administrative overheads." 
 
The changes have been made to the Companies (Corporate Social Responsibility Policy) Rules, 2014, through a notification dated September 12. 
 
As per the earlier norms, companies could build CSR capacities of their own personnel and their implementing agencies through institutions with a proven track record of at least three financial years. However, such expenditure should not exceed by 5 % of company’s total CSR expenditure in a single financial year.

Govt Changes
CSR Spending Norms

New Delhi, Dec 26 () The government has sought nominations for the national Corporate Social Responsibility (CSR) awards that will recognise companies that have made a positive impact through such activities.
 Under the Companies Act, 2013, certain class of profitable entities are required to spend at least two per cent of their three-year average annual net profit towards CSR works.
 The national CSR awards seeks to recognise the companies that have positively impacted both business and society by taking a strategic approach to CSR through collaborative programme, according to a communication posted on the website of the corporate affairs ministry.
 Besides, the awards looks to identify innovative approaches and employing application and technologies that would help in building a robust CSR programme to further the cause of inclusive and sustainable development, it added.
 A total of 20 awards would be given in three categories -- based on CSR spend, projects in aspirational districts or difficult terrains, and projects in national priority areas.
 Three awards, one each in the three categories, would be reserved for Micro, Small and Medium Enterprises (MSMEs).
 The deadline for submitting nominiations is February 15, 2020.
 Nominations can be made by ministries and central government departments, state governments, union territories, professional institutions like ICSI, ICAI and ICMAI, as also national level trade and industry chambers, as per the communication.
 The first set of national CSR awards were given away on October 29. AST RAM
RAM

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Indian companies will have to hand over the unspent money in the social responsibility fund to the government

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More firms in India complying with CSR norms under Companies Act: Report

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Whole Foods didn't break the law by punishing workers who wore pins and face masks with BLM slogans, judge rules

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Hidden investors took over Corizon Health, a leading prison healthcare company. Then they deployed the Texas Two-Step.

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Govt invites nominations for 2020 national CSR awards

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