NEW DELHI: The government is planning to make it mandatory for the companies to set aside 2% of their profits for non-core social activities under the wider domain of corporate social responsibility (CSR) related work. The easy exit scheme —launched by the government to allow companies that have closed operations and are not filing their annual returns will be extended till April 30, 2011 to facilitate firms to strike off their names without any major hurdle.
In the last one month more than 13,000 companies have applied for closure.
“We expect many more companies to apply for closure under the scheme, these companies would be exempt from elaborate legal procedure required for closing down,” said Murli Deora, corporate affairs minister on Tuesday.
Last year, about 7000 companies had applied for closure.
The minister also said that the new Companies Bill, pending in Parliament, is set to be taken up in the forthcoming Budget session. “The bill has already been exhaustively discussed with stakeholders and the Parliamentary Standing Committee on Finance. The ministry intends to introduce the revised bill in the ensuing Budget session of Parliament,” Deora said.
The minister also said that the new accounting norms —International Financial Reporting Standards (IFRS) —will commence from April 1. The corporate affairs and finance ministries would hold discussions on certain tax issues. However, the minister said that the government would hold further consultations with the corporates and other stakeholders such as FICCI, Assocham, CII, Institute of Chartered Accountants of India and ICSI.
In the first phase, Nifty 50 or BSE Sensex companies, firms whose securities are listed on stock exchanges outside India and all those having net worth of Rs1,000 crore would be required to switch to the new accounting system.
Insurance and banks, however, would be required to move to IFRS from from 2012.
(Hindustan Times, 8 Feb 2011)