NEW DELHI: CSR Violations have been decriminalised, said Nirmala Sitharaman, Minister for Finance and Corporate Affairs announced at press briefly today .
Earlier, parliament approved the Companies (Amendment) Bill which sought to tighten CSR norms and ensure stricter action for non-compliance of the company law regulations.
A key change in the bill pertains to Corporate Social Responsibility (CSR) spending, wherein companies would have to mandatorily keep unspent money in a special account.
The new amendments of the act says that any amount remaining unspent under sub-section 5, pursuant to any ongoing project fulfilling such conditions, undertaken by a company in persuance of its Corporate Social Responsibility (CSR) Policy, shall be transferred by the company within a period of thirty days from the end of the financial year to a special account to be opened by the company.
The sub-section 5 of the act, says that the articles may contain the provision for the entrenchment whether made on formation of a company or by amendment, agreed by all the members of the company in case of private company and special resolution in case of public company.
The unspent amount shall be spent by the company in pursuance of its obligation towards CSR Policy within a period of three financial years from the date of such transfer, failing which, the company shall transfer the amount to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year.