“CORPORATE GOVERNANCE AND CSR COMPLIANCE UNDER COMPANIES ACT, 2013” held on 5 NOVEMBER, 2014

The Amity Law School Noida has conducted a seminar on Corporate Governance and CSR Compliance under Companies Act, 2013. This act has replaced our old Indian Companies Act 1956. It is for the first time that the main structure of the companies act has undergone huge changes.

The event witnessed presence of eminent Company Secretaries, advocates and eminent practitioners of Company Law. Among the distinguished luminaries were Shri N.K.jain, Past CEO and Secretary, ICSI & Corporate Advisor, Mr. Nesar Ahmed, Ex-president, ICSI & Director, Mr. Nesar Consulting (P) Ltd and Shri O P Dhami Ex president ICSI.

The speakers highlighted the important amendments done through Companies Act 2013. This act has taken concepts of CSR from UN Millenium document with some minor changes to it including inclusion of Prime Minister Swacch Bharat Kosh.

Also this act laid emphasis on Corporate Social Responsibility concept which needs to be done as a mandate from current year. CS Shalini Thakur, Company Secretary and Associate Partner, Mahima Consultancy said that it CSR is not charity or donation, but it should be taken up willingly by the corporate.

Event was further graced by release of a book on ‘A Review of Laws Relating to Tourism in India’ edited by Maj Gen Nilendra Kumar, Director Amity Law School Noida. It is a compilation of the articles written by the distinguished academicians, corporate and law students and researchers. It is a one of its kind book on Laws related to Tourism in India.

The second session commenced with Mr. Pradeep Panda’s speech, DGM and Company secretary, LG electronics. He spoke at length on the topic: “provisions of CSR under the act”. During his speech he mention, “Business cannot survive without healthy society but societies are paying tax for social infrastructure over more directly useful areas of development.” Through this he wanted to convey that, people in today’s time are more focused on secondary issues and those issues are causing primary issues such as education, health and cleanliness to take the backseat in the developmental climate. He said, “Society plays a major role in developing business at a large scale” and he feels that, because of this business should also contribute back to towards society.

Mr. Yug Samrat, company secretary, network 18 (reliance group) was the second speaker and his topic of discussion was “New changes under the corporate governance norms”. He started by stating the meaning of “shubh labh” which means earning profit through fair and legal means and said that generosity is the good profit which is sidelined by the people. He stated the fact that TATA introduced CSR schemes decades ago than the parliament did.

Ms. Shalini, Company Secretary and associate Partner, Mahima Consultancy,  spoke on the topic of “Corporate Governance:  Overall Perspective”.  She talked about the overall practicality of CSR and stated that CSR is different from charity because charity is when you get some tax benefit in return but CSR is above and beyond charity. When donations are made for CSR then there is surety that the money ends up travelling via the proper channels and is not sidelined to other destinations. This, she felt, was very important for the development of the country.

Mr. Sharad Tyagi, Associate Partner, Seth Dua & Associates, was speaker number 4, and his topic of choice was “Application of CSR – Few Cases”. He started his speech by stating the 3 requirements of CSR, i.e., the net worth requirement, turnover requirement and net profit requirement. He also stated that 2% of average net profit should be spent doing activities for the betterment of the society as a whole and that these activities should be specified in the company mandate.

Mr. M K Rustagi, Company Secretary & President, Pioneer Flex Industries, was speaker number 5 and his topic of choice was “CSR – A Practical Perspective”.  In his opinion, CSR is only a pillar of the corporate sector. He stated a few facts about CSR; some o these facts are listed below:

Corporate governance ranking of India is 34 and china has a better CSR rating than India. CSR expenditure is expected to have a major impact on gdp. CSR is voluntary in a few countries like UK, the US and China. It is also mandatory in a few other countries such as France, Sweden and Malaysia.

To compile the discussion we could understand that CSR addition to the new Companies Act 2013, has brought major revolution by making the CSR activities to be understood much beyond a way of Tax saving or charity. This has given CSR a form where corporate must think of returning to the society what it has already used from the society. Now the corporate is expected to take more interest and initiative into the CSR activities. These activities have been grouped under various heads. Participation of Women among the Directors, inclusion of Swacch Bharat and initiatives like preservation of National Heritage and culture has added new dimensions to our CSR initiatives. This is the first year when it is being applicable to the corporate. Let’s hope these new initiatives of CSR and corporate governance would yield better spheres of growth for India as a whole.