Moneylife's seminar with Mr Noshir Dadrawala on the various intricacies of the changed scenario as a result of the CSR norms applicable from this year, under the Companies Act 2013.
There is unlikely to be a flood of money coming into the hands of NGOs, said Mr Noshir Dadrawala, philantrophy expert addressing a seminar on legal compliances required under Corporate Social Responsibility (CSR) mandated by the new Companies Bill.
MrDadrawala pointed out that the government and corporate India had already revised downwards to Rs 16,000 crore, the estimate of CSR funds that were likely to be available from companies that fall in the target bracket. This is down from the earlier estimate of Rs20,000 crore. India is the first country in the world to make CSR spending mandatory for the private sector and Mr Dadrawala narrated how the new government was continuously grapplying with the definition of what activities fall under the ambit of CSR under the act. The list was constantly changing and the rules were still evolving.
Mr Dadrawala also pointed out that while this wasn't great news for NGOs, there wouldnt be a hefty business opportunity for innumerable self-styled CSR experts that had sprung up in India.
Mr Dadrawala was addressing a packed audience at Moneylife Foundation, comprising largely of NGOs and corporte offcials on the provisions of the act and legal compliance required under it.
Mr Dadrawala gave a general introduction to the CSR environment as it stands today.
He spoke about the prevailing optimism among NGOs and NPOs about the possible flood of charity money that the semi- mandatory CSR norms under the Comapnies Act 2013 would bring. He dispelled any notions that the audience had that a whole lot of money would be coming their way and that fund-raising would suddenly become a cake-walk.
Considering the mandated nature of the CSR norms, Mr Dadrawala said that in spite of the hurried drafting of the act during its initial passage, there were still frequent notifications that keep modifying the application of the law. “Ministry of Corporate Affairs (MCA) is the most confused entity CSR today. If you think the corporates and NGOs are confused, the government is even more confused than them. They have issued 3 notifications with back and forth regarding just the Schedule 7 of the law, and that too in just 6 months.”
Mr Dadrawala is the Chief Executive of Mumbai-based Centre for Advancement of Philanthropy, an NGO specialising in charity laws, CSR compliance for companies and good governance for non-profits. Among his various other achievements and work, is one of Directors of Asia Pacific Philanthropy Consortium (APPC), member of the Coordinating Committee of Worldwide Initiatives & Network of Grant-makers (WINGS), Fellow of the Centre for Study of Philanthropy (New York), and member of the advisory council of the International Centre for Not-for-profit Law. His work has also included teaching and educating in the field of philanthropy and has written numerous books on the subject too.
He spoke about the different kind of NGOs that can be registered and the ways to go about this. However, in the matter of exemptions, “Exemptions under 80 (g) alone are not really attractive to corporates. 80 (g) may be said to be a graduation degree, 35 (a) (c) could be considered a post-graduation and an exemption under 35 (1) (2) is like a PhD. If you have a 35 (1) (2) exemption, corporates will tend to look at funding you seriously.”
He took questions from a very active audience all through the session and was more than forthcoming in his replies. The topic of registering as a trust, society and a Section 8 entity was also discussed, while speaking about the various pros and cons of each type of NGO.
He said that, “some corporates are still under the impression that section 135 amd by extensio nthe CSR rules apply to them from some time in the future, but the section is enforceable since this assessment year itself.” He explained that to better understand definitions and other things under the law, allied laws like FCRA rules are a good guide.
Taking the audience through the stages of evolution of philanthropy itself, to the motivations behind philanthropy, he then came down to the nitty gritty of the act and its various provisions. In terms of CSR, Section 135 (1) decides whether a corporate must conform to the CSR spend requirements.
“Any experimenting that you want to do under CSR and the expenditure ofthe money, do it this year,” he said. His point was that the list of negative exclusions of what 'shall not' qualify as CSR will only grow as Indian companies look for ways to wriggle out of spending money on real and important CSR activities. The liberal interpretations of the Schedule 7 meant that a wide range of issues and projects could be taken up under the CSR mandate of a corporate.
Then there was the thorny issue of CSR reporting to consider. He explained that there was a serious amount of responsibility at the feet of the directors who would form a part of the CSR committee of the corporate. As such, reporting is one of the most legally important provisions. He explained that punitive action under the CSR law is reserved for non-disclosure, which is why the great importanc to reporting. There is little punishment in response to mis-application of the monies spent under the act yet.
With the background of the MCA's projections under CSR spends that will soon be needed under the law, Mr Dadrawala took on questions once again in the end and tried to resolve as many questions as possible.
Nifty may suffer small dips but could rise over the next few days
In Friday’s closing report, we had mentioned that the Indian benchmarks may make a short bounce. Monday was the second consecutive day of gain on the bourses. The two days of gain on the S&P BSE Sensex wiped off the losses made on 14 October 2014 and 17 October 2014, while NSE’s CNX Nifty covered up almost most of the losses.
Sensex opened at 26,434 while Nifty opened at 7,897. After a huge gap up opening, the Sensex moved in the range of 26,369 and 26,518 while Nifty moved in a narrow range of 7,857 and 7,906. Sensex closed at 26,430 (up 321 points or 1.23%) while Nifty closed at 7,879 (up 100 points or 1.28%). NSE recorded a volume of 73.69 crore shares. India VIX fell 13.48% to close at 14.1900.
Except for flat IT (0.68%), all the other indices on the NSE closed in the green. The top five gainers were CPSE (3.51%), PSE (3.02%), Commodities (2.18%), Auto (2.07%) and Infra (2.04%).
Of the 50 stocks on the Nifty, 41 ended in the green. The top five gainers were Ultratech Cement (5.90%), ONGC (5.01%), Hindalco (4.70%), DLF (4.48%) and BPCL (4.10%). The top five losers were Jindal Steel (7.35%), Wipro (1.88%), Infosys (1.07%), TCS (0.64%), ITC (0.61%).
Of the 1,577 companies on the NSE, 934 companies closed in the green, 587 companies closed in the red while 56 companies closed flat.
The Bharatiya Janata Party (BJP) secured a clear majority in Haryana and is set to form the government in state. BJP emerged with a clear mandate in Haryana, winning 47 seats in the 90-member assembly with a 33.2% vote share. The party emerged as the single largest party in Maharashtra and is likely to form the government in state. In Maharashtra, the BJP won 122 seats in the 288-member assembly, falling 23 seats short of the 145 seats required for a simple majority. The NCP, which won 41 seats, said it will offer BJP "outside support" to form a stable government in the state.
The Cabinet Committee of Economic Affairs (CCEA) on Saturday approved the new domestic gas pricing policy. As per the formulation approved by the CCEA, upward revision in gas prices will be approximately 75% less as compared to the price arrived at using Rangarajan formula. About 80% of the additional revenues due to revision in gas price will go to the government companies. Government will get additional revenue of approximately Rs3,800 crore per annum on account of higher royalty, higher profit petroleum and higher taxes.
The government decided to make the price of diesel market-determined at both retail and refinery gate level for all consumers from midnight of 18/19th October 2014.
Henceforth, oil marketing companies (OMCs) are free to determine selling prices of the product in the domestic market, Indian Oil Corporation said in a statement. IOC rose 3.84%. HPCL (7.28%) was among the top three gainers in ‘A’ group on the BSE. HPCL hit its 52-week high today. ONGC (5.44%) was the top gainer in Sensex 30 pack.
Jindal Steel (8.58%) was the top loser in ‘A’ group on the BSE. The stock hit its 52-week low today. The Central Bureau of Investigation (CBI) on Sunday registered a fresh case against JSPL. It was alleged that ‘Gare Palma IV/1' coal block was allocated to JSPL for its sponge iron plant (SIP). It is alleged that the company proposed and entered into irregular mining lease covering area much beyond the coordinates stipulated by Ministry of Coal, resorted to excess coal mining, irregular regularisation of area beyond coordinates and excess coal mined, sale of raw coal, sale of coal fines and middling to other than specified end users, irregular permission for consumption of coal in expansion of kilns and other related allegations.
All the IT stocks in the Sensex 30 stock were among the losers. The top three losers were Wipro (1.67%), Infosys (1.09%) and TCS (0.88%).
US indices closed Friday in the green.
US consumer confidence unexpectedly rose in October to the highest level in seven years, showing a brightening in Americans' moods as gas prices drop and the labour market gains traction. The Thomson Reuters/University of Michigan preliminary sentiment index for this month increased to 86.4, the strongest since July 2007.
All the Asian indices closed Monday in the green. Nikkei 225 (3.98%) was the top gainer.
Japan's $1.2 trillion Government Pension Investment Fund, the world's largest public pension fund, is working out plans to increase its portfolio allocation devoted to domestic stocks to around 25%.
In China, the country's central bank -- the People's Bank of China -- is reportedly planning the injection of about 200 billion yuan ($32.7 billion) into some national and regional lenders.
European indices were trading in the red while US Futures too were trading lower.
As against 21% in 2009, Congress got a vote share of 17.9% this time while its seat tally dropped hugely to 42 from 82 in Maharashtra assembly polls
The Bharatiya Janata Party (BJP) may have fallen short of the majority mark in Maharashtra but its vote share nearly doubled in the just-held Assembly polls compared to that in 2009. At the same time, a 3% swing in votes cost Congress a whopping 40 seats placing it at number three position, after Shiv Sena.
BJP, which contested this election after parting ways with its 25-year-old ally Shiv Sena, recorded a huge jump in its tally of seats from 46 to 122 in a four-cornered contest. However, it stopped short of the majority figure of 145 by 23 seats.
According to data from the Election Commission, at the same time, BJP registered a vote share of 27.8% against 14.02% in 2009.
In the May Lok Sabha elections, when it was in alliance with Shiv Sena and fought against Congress-Nationalist Congress Party (NCP) combine, the BJP got 27.3% of the votes to bag 23 of the 48 seats at stake.
In the case of BJP’s erstwhile ally Shiv Sena, a 3% rise from 16.26% to 19.4% was enough to nearly double its seats to 63 this time from 33 in 2009. The Shiv Sena polled 20.6% to get 18 seats.
For Congress, a 3% swing in votes against it cost it 40 seats. As against 21.01% in 2009, Congress got a vote share of 17.9% this time while its seat tally dropped hugely from 82 to 42.
In the Lok Sabha polls, the Congress polled 18.1% votes but got only two seats.
The vote share of Congress’ erstwhile ally NCP rose marginally to 17.3% from 16.4% but that did not translate into more seats.
The Sharad Pawar-led NCP won 41 seats as against 62 in the previous elections. It had won four seats in Lok Sabha polls with a vote share of 16%.
The Raj Thackeray-led Maharashtra Navnirman Sena (MNS) secured 3.1% of the votes but could get only one seat.
In these assembly polls, 4,119 candidates were in the fray. BJP had fielded 280 candidates, Congress 287, NCP 282, Shiv Sena 282, BSP 260, MNS 219, CPI 34 and CPM 19.