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Concessions to Corporate Sector



Concessions to Corporate Sector 

The Ministry of Corporate Affairs has notified Companies (Corporate Social Responsibility Policy) Rules, 2014 (http://www.mca.gov.in), which prescribes the format for disclosure of utilisation of Corporate Social Responsibility (CSR) funds by the companies.


            There are no specific tax exemption/concessions to companies under the Income Tax Act, 1961 for expenditure incurred by companies towards CSR. However, spending by companies on several activities like rural development projects, skill development projects, agricultural extension projects, contribution to Prime Minister’s National Relief Fund etc., which find place in Schedule VII of the Companies Act, 2013, may qualify for tax exemptions under relevant provisions of Income Tax Act, 1961 subject to the fulfilment of any specified conditions.

            This Ministry administers the Companies Act, which does not deal with employment policy of corporates.

            The rate of growth of corporates in various States during each of the last three financial years, State/UT-wise is given in Annex.

            This Ministry neither deals with priority sector nor with the investment policy of the companies.

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha.



ANNEX





Rate of growth of corporate in terms of number of companies in the registry in  various States/UT during each of the last three FYs (State/UT-wise Distribution)
      ( Year on year growth in terms of percentage)


Sr. No.
State/UT
2012-13
2013-14
2014-15


1
Andaman and Nicobar Islands
8.90
14.73
11.46


2
Andhra Pradesh
7.08
7.38
9.17


3
Arunachal Pradesh
4.94
5.67
1.40


4
Assam
5.19
3.71
2.11


5
Bihar
9.99
13.08
8.21


6
Chandigarh
6.06
5.23
3.24


7
Chhattisgarh
7.41
7.53
4.35


8
Dadar & Nagar Haveli
4.19
5.80
3.15


9
Daman and Diu
2.91
7.41
2.30


10
Delhi
6.59
6.45
4.08


11
Goa
3.99
3.51
2.15


12
Gujarat
6.12
6.56
3.87


13
Haryana
15.04
14.78
9.80


14
Himachal Pradesh
6.43
6.66
4.47


15
Jammu and Kashmir
8.81
8.85
4.63


16
Jharkhand
10.57
12.53
7.46


17
Karnataka
7.34
8.14
6.39


18
Kerala
8.12
7.99
4.32


19
Lakshadweep
0.00
0.00
0.00


20
Madhya Pradesh
8.54
7.87
4.49


21
Maharashtra
5.96
6.16
3.71


22
Manipur
8.12
11.54
9.93


23
Meghalaya
4.22
2.77
1.91


24
Mizoram
5.62
2.20
5.21


25
Nagaland
6.03
4.13
2.02


26
Odisha
9.33
7.25
4.53


27
Puducherry
3.25
3.39
2.55


28
Punjab
4.81
4.97
2.86


29
Rajasthan
8.59
8.01
3.67


30
Sikkim
0.00
0.00
0.00


31
Tamil Nadu
5.98
5.85
4.23


32
Telangana
7.93
7.88
5.21


33
Tripura
13.41
12.66
5.39


34
Uttar Pradesh
11.97
13.20
9.15


35
Uttarakhand
10.33
11.20
7.15


36
West Bengal
7.23
5.48
2.24



Note: Number of companies as on end March of the year has been taken for computation
of year on year growth.
*********

Appointment of Independent Director in the Company Including Public Sector Undertakings (PSUs) 

Section 149(4) provides that every listed company shall have atleast 1/3rd of total number of directors as independent directors.   Clause 49(II) of Listing Agreement further requires that in case the listed company does not have a regular non-executive Chairman, at least half of the Board should comprise Independent Directors.   Further, where the regular non-executive Chairman is a promoter of the company or is related to any promoter or person occupying management positions at the Board level or at one level below the Board, at least one-half of the Board of the company shall consist of indpendendent directors. 

Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014 prescribe that unlisted public companies having a paid up capital of Rs. 10 crores OR more, OR turnover of Rs. 100 crores or more, OR having outstanding loans, debentures and deposits exceeding Rs. 50 crores, should have atleast two independent directors.  However, if the audit committee constitution requires a higher number, then such higher number of independent directors shall be appointed.   These provisions are applicable to Public Sector Undertakings (PSUs) also. 

Section 149 (6) read with Rule 5 of Companies (Appointment and Qualification of Directors) Rules, 2014 prescribes the qualifications etc. for an Independent Director.  In addition, Department of Public Enterprises has prescribed criteria for selection/appointment of non-official Directors on the Board of CPSEs as per Annexure-I.

The number of companies, category wise, which have not appointed woman directors are as follows:-

(i) listed companies including listed PSUs:- 1707
(ii) unlisted companies including unlisted PSUs:- 329

SEBI had prescribed fines on listed companies (other than PSUs) between Rs. 50,000 and Rs. 1,42,000 depending upon period of default from 1st April, 2015 to 1st October, 2015.   Additionally, a per day fine of Rs. 5,000 is being imposed for continued violation after 1st October, 2015.   SEBI had requested Government to advise the concerned administrative Ministries to take appropriate steps for ensuring compliance by defaulting listed PSUs.  Prosecution has been launched against 121 defaulting unlisted companies(other than PSUs). 

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha.


Annexure-I

Criteria for selection/appointment of non-official Directors on the Boards of CPSEs as laid down by the Government.

(A)      Criteria of Experience
(i)                 Retired Government officials with a minimum of 10 years experience at Joint Secretary level or above.

(ii)               Persons who have retired as CMD/CEOs of CPSEs and Functional
Directors of the Schedule 'A CPSEs. The ex-Chief Executives and ex­-Functional Directors of the CPSEs will not be considered for appointment as non-official Director on the Board of the CPSE from which they retire. Serving Chief Executives/Directors of CPSEs will not be eligible to be considered for appointment as non-official Directors on the Boards of any CPSEs.


(iii)             Academicians/Directors of Institutes/Heads of Department and Professors having more than 10 years teaching or research experience in the relevant domain e.g. management, finance, marketing, technology, human resources, or law.

(iv)             Professionals of repute having more than 15 years of relevant domain
experience in fields relevant to the company's area of operation.

(v)               Former CEOs of private companies if the company is (a) listed on the
Stock Exchanges or (b) unlisted but profit making and having an annual turnover of at least Rs.250 crore.

(vi)             Persons of eminence with proven track record from Industry, Business or Agriculture or Management.


(vii)           Serving CEOs and Directors of private companies listed on the Stock Exchanges may also be considered for appointment as part-time non­official Directors on the Boards of CPSEs in exceptional circumstances.

(B)              Criteria of Educational Qualification

Minimum graduate degree from a recognized university.

(C)             Criteria of Age

The age band should be between 45-65 years (minimum/maximum limit).  This   could, however, be relaxed for eminent professionals, for reasons to be recorded, being limited to 70 years.
(D)        Reappointment

The non-official Directors, will not be re-appointed in the same CPSE after completing a maximum of two tenures, each tenure being for a period of three years.
(E)         Appointment in number of CPSEs at the same time
One person will not be appointed as non-official Director on the Boards of more than three CPSEs at the same time.

 (F)   Directorship in private companies                   

A person being considered for appointment as non-official Director on the Board of CPSEs should not hold directorship in more than 10 private companies.

*******
Registered Companies with ROC 

Companies registered with Registrar of Companies (ROCs), State/UT-wise as on 26.11.2015 is at Annexure – I. Number of closed companies, State/UT-wise during the last three years and current financial year is at Annexure - II.

Section 560 of the Companies Act, 1956 (corresponding provision in Companies Act, 2013 is Section 248, which is not yet notified) provides for striking off the names of those companies which have not been carrying on business or not in operation, if the Registrar of Companies has a reason to believe so, after following prescribed procedure.   The Ministry had from time to time come out with Easy Exit Schemes to enable such companies which are not carrying on business or in operation, to apply for and get their names removed from the register.   The Ministry had also introduced a Fast Track Exit Scheme for defunct companies to approach the Registrar of Companies from time to time for striking off their names. As the scheme is still continuing, no separate/new proposal is under consideration of the Ministry.    The number of companies which have been struck off from the register of companies during the years 2012-13, 2013-14, 2014-15 and 2015-16 (till 04.11.2015) are given in Annexure-III.

The Government has already brought out several changes in the registration process such as (i) the requirement for obtaining Director Identification Number by all Directors,   (ii) verification of the address of registered office by obtaining supporting documents, and   (iii) certification by a Company Secretary, Chartered Accountant, Cost Accountant or Advocate who, are required to personally visit the registered office and verify its existence. Detailed rules have been prescribed in Companies (Incorporation) Rules, 2014 in this regard.  Further, it is stated that while Companies Act, 2013 (Chapter XXI, Part-I) provides for registration of unregistered bodies, it does not mandate for all unregistered bodies/companies to be registered under the said Act.

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha.


Annexure –I

Number of Companies registered, State/UT-wise, as on 26.11.2015

Sl. No.
State/UT
Number of Companies
1.
Andaman and Nicobar Islands
278
2.
Andhra Pradesh
22566
3.
Arunachal Pradesh
507
4.
Assam
9568
5.
Bihar
21129
6.
Chandigarh
13091
7.
Chhattisgarh
7780
8.
Daman and Diu
309
9.
Delhi
282539
10.
Dadar Nagar Haveli
455
11.
Goa
7495
12.
Gujarat
83804
13.
Himachal Pradesh
4916
14.
Haryana
28522
15.
Jharkhand
9476
16.
Jammu and Kashmir
4246
17.
Karnataka
83454
18.
Kerala
39500
19.
Lakshadweep
12
20.
Maharashtra
307838
21.
Meghalaya
1001
22.
Manipur
462
23.
Madhya Pradesh
30828
24.
Mizoram
104
25.
Nagaland
503
26.
Orissa
19213
27.
Punjab
26823
28.
Pondicherry
2977
29.
Rajasthan
47318
30.
Sikkim
0
31.
Telangana
80702
32.
Tamil Nadu
118962
33.
Tripura
350
34.
Uttar Pradesh
70125
35.
Uttarakhand
5013
36.
West Bengal
187970
Total
1519836











Annexure –II
Annexure referred to in Part (a) of the Answer to Lok Sabha Unstarred
Question No. 1043 for 04.12.2015

Number of closed companies, State/UT-wise
Sl. No.
State/UT
Year
2012-13
Year
2013-14
Year
2014-15
Year
2015-16 (upto 26.11.2015)
1.
Andaman & Nicobar Islands
0
2
0
0
2.
Andhra Pradesh
36
287
481
181
3.
Arunachal Pradesh
9
11
0
2
4.
Assam
118
193
29
44
5.
Bihar
26
3
115
191
6.
Chandigarh
464
110
359
145
7.
Chhattisgarh
22
16
46
40
8.
Daman and Diu
0
3
1
2
9.
Delhi
2012
1726
3098
2900
10.
Dadar Nagar Haveli
0
2
6
4
11.
Goa
48
105
73
43
12.
Gujarat
342
619
739
867
13.
Himachal Pradesh
144
25
36
107
14.
Haryana
144
146
244
306
15.
Jharkhand
15
0
35
135
16.
Jammu and Kashmir
14
10
35
23
17.
Karnataka
63
920
1005
665
18.
Kerala
259
332
329
382
19.
Lakshadweep
0
0
0
0
20.
Maharashtra
2018
2188
2846
2118
21.
Meghalaya
19
16
5
4
22.
Manipur
5
3
0
1
 23.
Madhya Pradesh
147
237
206
371
 24.
Mizoram
10
7
0
0
25.
Nagaland
12
10
0
3
26.
Orissa
1182
221
415
52
27.
Punjab
1098
136
586
205
28.
Pondicherry
16
18
16
24
29.
Rajasthan
195
300
852
685
30.
Sikkim
0
0
0
0
31.
Telangana
0
0
6923
704
32.
Tamil Nadu
1367
1192
1031
1079
33.
Tripura
10
11
2
2
34.
Uttar Pradesh
200
173
553
996
35.
Uttarakhand
3
0
90
38
36.
West Bengal
4562
1796
1869
1611

*****


Annexure –III
Annexure referred to in Part (b) to (d) of the Answer to Lok Sabha Unstarred
Question No. 1043 for 04.12.2015
Number of companies struck off, State/UT-wise
Sl. No.
State/UT
Year
2012-13
Year
2013-14
Year
2014-15
Year
2015-16 (upto 04.11.2015)
1.
Andaman & Nicobar Islands
0
2
0
0
2.
Andhra Pradesh
13
251
268
1
3.
Arunachal Pradesh
2
11
0
1
4.
Assam
71
190
25
31
5.
Bihar
25
3
133
157
6.
Chandigarh
364
107
337
120
7.
Chhattisgarh
4
20
28
0
8.
Daman and Diu
0
2
0
0
9.
Delhi
1307
1050
2020
1719
10.
Dadar Nagar Haveli
0
1
4
4
11.
Goa
22
86
50
0
12.
Gujarat
367
367
462
662
13.
Himachal Pradesh
146
35
21
94
14.
Haryana
96
123
195
207
15.
Jharkhand
11
0
100
57
16.
Jammu and Kashmir
5
19
25
0
17.
Karnataka
219
634
829
587
18.
Kerala
253
319
321
361
19.
Lakshadweep
0
0
0
0
20.
Maharashtra
1131
1356
1756
890
21.
Meghalaya
14
15
4
3
22.
Manipur
4
3
0
0
23.
Madhya Pradesh
0
245
194
286
24.
Mizoram
1
7
0
0
25.
Nagaland
8
10
0
3
26.
Orissa
1248
226
431
46
27.
Punjab
771
145
558
171
28.
Pondicherry
13
17
20
7
29.
Rajasthan
166
266
569
548
30.
Sikkim
0
0
0
0
31.
Telangana
111
554
90
0
32.
Tamil Nadu
695
932
1017
450
33.
Tripura
7
11
2
2
34.
Uttar Pradesh
154
433
693
412
35.
Uttarakhand
0
0
84
33
36.
West Bengal
3880
1662
1147
725
Total
11108
9102
11383
7577

*****
Participation of CCI in the Conference 
Under the mandate given by section 49 of the Competition Act, 2002, Competition Commission of India (CCI) takes measures to engage in competition advocacy, creating awareness and imparting training on competition issues. This is done, inter-alia, by participation of Chairperson, Members and officials of the Commission in various conferences, seminars and workshops organized by various stakeholders. CCI, however, has not participated in any commercial event.

During financial year 2015-16, CCI has, till date, participated in 55 advocacy events, out of which 04 have been organized by ASSOCHAM. The invites to such conferences are from business associations/stakeholders and the Commission does not engage with the individual sponsors, if any, and members of the associations.

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha. 
*****
CSR for War Widows and War Veterans 
Schedule VII of the Companies Act, 2013, that enlists the eligible Corporate Social Responsibility (CSR) activities, already covers, inter-alia, ‘measures for the benefit of armed forces veterans, war widows and their dependents’ at item no. (vi). However, the decision to allocate CSR fund across various items of Schedule VII is taken by the Board of the Company under the provisions of the Act.

This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha. 
*****


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