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Thursday, April 20, 2023
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ByDR. S.D. ISRANI, Advocate & Sr. Partner
SD Israni Law ChambersICAI Seminar at Kandivali, Mumbai
on Sunday, 27th April 2013
Thursday, April 20, 2023
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Today’s business leader cannot justify his existence by profit statements alone. He must also render service to his local, national and world community.
DOROTHY SHAVER
THE COMPANIES ACT, 2013
Thursday, April 20, 2023
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COPORATE SOCIAL
RESPONSIBILITY (CSR)
THE COMPANIES ACT, 2013
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CSR VOLUNTARY
GUIDELINES, 2009
THE COMPANIES ACT, 2013
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Core ElementsCare for all StakeholdersEthical functioningRespect for Workers' Rights and WelfareRespect for Human RightsRespect for EnvironmentActivities for Social and Inclusive Development
THE COMPANIES ACT, 2013
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COMPANIES ACT, 2013&
CSR
THE COMPANIES ACT, 2013
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S. 135Every company having net worth of Rs. 500 crores or more, orTurnover of Rs. 1000 crores or more or A net profit of Rs. 5 crores or moreDuring any financial year
THE COMPANIES ACT, 2013
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To constitute a Corporate Social Responsibility (CSR) Committee of the Board consisting of three or more directors, out of which at least one director shall be an independent director.
Holding Co., Subsidiary Co., Foreign Co. having branch in India.
THE COMPANIES ACT, 2013
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The Board's report under sub-section (3) of section 134 shall disclose the composition of the Corporate Social Responsibility Committee.
THE COMPANIES ACT, 2013
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The CSR Committee shall,—(a) formulate and recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII;(b) recommend the amount of expenditure to be incurred on the activities referred to in clause (a); and(c) monitor the CSR Policy of the company from time to time.
THE COMPANIES ACT, 2013
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The Board shall,—after taking into account the recommendations made by the CSR Committee, approve the CSR Policy for the company and disclose contents of such Policy in its report and also place it on the company's website, in such manner as may be prescribed;
THE COMPANIES ACT, 2013
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The Board shall ensure that,—the activities as are included in CSR Policy of the company are undertaken by the company.
company spends, in every financial year, at least two per cent. of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its CSR Policy.
THE COMPANIES ACT, 2013
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Schedule VII
CSR Activities
THE COMPANIES ACT, 2013
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(i) eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water;
(ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects.
THE COMPANIES ACT, 2013
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(iii) promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centers, and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
THE COMPANIES ACT, 2013
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(iv) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintain quality of soil, air and water;
THE COMPANIES ACT, 2013
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(v) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
THE COMPANIES ACT, 2013
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(vi) measures for the benefit of armed forces veterans, war widows and their dependents;
(vii) training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports;
THE COMPANIES ACT, 2013
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(viii) contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;
THE COMPANIES ACT, 2013
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(ix) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;
(x) rural development projects
THE COMPANIES ACT, 2013
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Preference to the local area and areas around it where it operates, for spending the amount earmarked for CSR activities.
If the company fails to spend such amount, the Board to mention the dame in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount.
THE COMPANIES ACT, 2013
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IMPLEMENTATION
OF
CSR ACTIVITIES
THE COMPANIES ACT, 2013
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TRANSPARENT MONITORING MECHANISM
CSR REPORTINGANNUAL REPORT
IN THE BOARD’S REPORT
THE COMPANIES ACT, 2013
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WHEN CAN A COMPANY BE EXEMPTED
FROM THE APPLICABILITY OF THE
PROVISIONS OF S.135
THE COMPANIES ACT, 2013
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The making of money, the accumulation of material power, is not all there is to living. Life is something more than these, and the man who misses this truth misses the greatest joy and satisfaction that can come into his life – service for others.
EDWARD W. BOK
THE COMPANIES ACT, 2013
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Offences And Penalties
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Many fold Increase in Fine
More sections have minimum Fine provision
Fines range from Rs. 5000
to Rs. 25 crore and more
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Cognisance of Offences
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THE COMPANIES ACT, 2013
Section 439
Section 621 (Old)
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Registrar
Shareholder
Person authorised by
the Central Government
SEBI
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Composition of offences
THE COMPANIES ACT, 2013
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Section 621A (Old)
Section 441 (New- NE)
Compounding of Offences
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THE COMPANIES ACT, 2013
Compoundable Offences
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Three kinds of offences are permitted to be compounded
under the Act
THE COMPANIES ACT, 2013
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Offences
which are punishable
with fine only
THE COMPANIES ACT, 2013
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Offences which are punishable
with imprisonment or fine.
THE COMPANIES ACT, 2013
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Offences
which are punishable with
imprisonment or
fine or
both
THE COMPANIES ACT, 2013
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Non – Compoundable
An offence punishable with imprisonment only or
with imprisonment and fine is not compoundable
THE COMPANIES ACT, 2013
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CLB to compound offences without any limit
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Fine Below Rs. 50000 may be compound by
Regional Director
THE COMPANIES ACT, 2013
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Similar offence committed within
a period of three years
not compoundable.
THE COMPANIES ACT, 2013
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Offences punishable with imprisonment or
fine or both
prosecution before the Magistrate
THE COMPANIES ACT, 2013
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THE COMPANIES ACT, 2013
Effect of compounding of an offence
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THE COMPANIES ACT, 2013
no prosecution can be launched
in relation to such an offence.
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THE COMPANIES ACT, 2013
prosecution is pending shall be discharged
by the court.
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THE COMPANIES ACT, 2013
Where the offences which can be compounded only with the permission of the court, the
composition thereof shall have the effect of acquittal of the
accused
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THE COMPANIES ACT, 2013
Period of Limitation
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THE COMPANIES ACT, 2013
S.468
Code of Criminal Procedure
Period of limitation
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Six months if the offence is punishable
with fine only
THE COMPANIES ACT, 2013
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THE COMPANIES ACT, 2013
One year if the offence is
punishable with imprisonment for a term
not exceeding one year
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Three years
if the offence is punishable with imprisonment
for a term exceeding one year
but not exceeding three years.
THE COMPANIES ACT, 2013
Thursday, April 20, 2023
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S. 8
Fine not less than ten lakh rupees may extend to one crore rupees and
Directors and every officer of the company who is in default punishable with imprisonment for a term which may extend to three years or with fine not less than twenty-five thousand rupees which may extend to twenty-five lakh rupees, or with both:
THE COMPANIES ACT, 2013
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S.74 - Deposits
Fine not less than one crore rupees which may extend to ten crore rupees.
Every officer of the company who is in default punishable with imprisonment which may extend to seven years or with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees, or with both.
THE COMPANIES ACT, 2013
Thursday, April 20, 2023
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S. 41 Private PlacementContravention of this section:
Company, its promoters and directors liable for a penalty which may extend to the amount involved in the offer or invitation or two crore rupees, whichever is higher, and the company shall also refund all monies to subscribers within a period of thirty days of the order imposing the penalty
THE COMPANIES ACT, 2013
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S. 46 Issue of Duplicate Shares
Intent to defraud:punishable with fine which shall not be less than five times the face value of the shares involved in the issue of the duplicate certificate, which may extend to ten times the face value of such shares or rupees ten crores whichever is higher
THE COMPANIES ACT, 2013
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S. 195 Insider Trading
Any contravention punishable with imprisonment for a term upto five years or with fine which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of insider trading, whichever is higher, or with both.
THE COMPANIES ACT, 2013
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Presentation By:
S.D. ISRANI
Advocate & Senior Partner,
SD ISRANI LAW CHAMBERS,
911, Tulsiani Chambers,
Nariman Point,
Mumbai – 400021.
Ph: 22040117 /22810249
Email : [email protected] / [email protected]
THE COMPANIES ACT, 2013