Govt: Will Monitor wp Activities From Next Year

August 28, 2015

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THE government today said it would start monitoring wp activities of corporates under the new Companies Act from next year. “This being the first year of implementation of the provisions, it will be possible to initiate monitoring of the wp activities under the above provision from next year only,” Minister of State for Corporate Affairs Nirmala Sitharaman informed the Rajya Sabha in a written reply.

Certain class of profitable companies are required to shell out at least 2 per cent of their three-year annual average net profit towards Corporate Social Responsibility (wp) works. These norms have come into effect from April 1.

Companies with a turnover of Rs 1,000 crore or more, at least Rs 500 crore net worth or minimum Rs 5 crore net profit are required to spend on wp, according to Section 135 of the Companies Act, 2013.

In a separate written statement, Corporate Affairs Minister Arun Jaitley said that wp expenditure has to be calculated on the basis of profit before tax.

Noting that there has been an inaccuracy in a reply to a supplementary question on wp in the Rajya Sabha on July 8, the government said that reference to “profit after tax/post tax profit was meant to refer to profit before tax.” (Agencies)