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AMENDMENT IN SECTION 135 OF COMPANIES ACT 2013

Wed, 21 Aug 2019 11:48:00 +0000

Applicability of Section 135:-

As per section 135(1) of Companies Act, 2013, following Companies having,

Net worth of Rs. 500 crore or more

Turnover of Rs. 1000 crore or more

Net profit of Rs. 5 crore or more

Shall constitute Corporate Social Responsibility committee of the board consisting of 3 or more directors, out of which 1 director shall be independent director.

Role of CSR Committee:-

Formulate and recommend to the Board, a Corporate Social Responsibility Policy

Indicate the activities to be undertaken by the company as specified in Schedule VII. Such activities may include eradication of extreme hunger & poverty, promotion of education, promoting gender equality and empowering women, ensuring environmental sustainability and etc;

Recommend the amount of expenditure to be incurred on the activities specified above.

Monitor the Corporate Social Responsibility Policy of the company from time to time.

3. Amount to be Spent on CSR Activities:-

As per Companies Act, 2013 board of every Company as referred in Section 135(1) shall ensure company spends atleast 2% of average net profits of the company made during the 3 immediately preceding Financial Years.

Below is the example for calculating CSR Expenditure:-

Net Profits in 3 preceding FY:-

2015-16 25,00,000

2016-17 30,00,000

2017-18 (10,00,000)

Total Net Profit for 3 FY 45,00,000

Minimum amount to be spent on CSR activities in FY 2018-19 (45,00,000*0.02) 90,000

4. Amendments’ in Section 135 of Companies Act, 2013:-

The Companies (Amendment) Act, 2019 amended section 135 dealing with Corporate Social Responsibility. The Companies (Amendment) Act, 2019 received President’s assent and was published in Official Gazette on 31st July, 2019.

A. To calculate CSR expenditure, average net profit of 3 immediately preceding financial year had to be considered. But, there used to be concerns on how to calculate CSR expenditure for a company which is newly incorporated or which has not completed 3 years of its operations and satisfies any one of the condition as specified u/s 135(1).

With the recent amendment, there is clarity with respect to the above. As per amendment act, Company who has not completed a period of three financial years since its incorporation shall consider the average net profits earned by it during financial years after incorporation.

B. Prior to amendment act, if a company has not spent the earmarked CSR expenditure, it had to disclose the reasons in its board report at the annual general meeting of the company.

In this regard, Amendment Act provides that:-

Unspent amount related to an ongoing CSR project: – the Company has to transfer such unspent amount to a Fund specified in Schedule VII, within a period of 6 (six) months of the expiry of that financial year.

Fund specified under schedule VII are:-

1. Contribution to the Prime Minister’s national relief fund.

2. Any other fund set up by the central govt. for socio – economic development and relief and welfare of the schedule caste, tribes, other backward classes, minorities and women;

Unspent amount on ongoing CSR projects:-

1. The company within a period of 30 (thirty) days from the end of the financial year has to transfer the unspent contribution amount to a special account to be opened in any scheduled bank, to be called ‘the Unspent Corporate Social Responsibility Account’.

2. The amount so transferred to the designated account, is to be utilized in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of next 3 (three) financial years from the date of such transfer.

3. If the Company fails to utilize the said amount, it is required to transfer the same to a Fund specified in Schedule VII, within a period of 30 (thirty) days from the date of completion of the third financial year.

C. The Amendment Act has introduced penal provisions for non-compliance in reporting, utilization and transfer of the unspent CSR amount;

The company shall be punishable with fine which shall not be less than INR 50,000 but which may extend to INR 25 lacs.

Every officer of the Company who is in default shall be punishable with imprisonment for a term which may extend to 3 (three) years or with fine which shall not be less than INR 50,000 but which may extend to INR 5 lacs, or with both.

Author Comments:-

1. The Central Government is yet to prescribe conditions categorizing ‘ongoing project’ for purpose of section 135(6) of the Act.

2. The Central Government will issue general or special directions for a Company or class of Companies for ensuring compliance of provisions of section 135 of the Act.

3. The amendments to section 135 of the Act have not yet come into force. The Central Government by notification in Official Gazette shall appoint the effective date.

4. With amendment act under section 135 of Companies Act, it becomes imperative for corporate India to ensure adequate compliance of this law.

The information which is summarised herein does not constitute financial or other professional advice and is general in nature. It does not take into account your specific circumstances and should not be acted on without full understanding of your current situation and future goals and objectives by a fully qualified advisor.

Ref: https://taxguru.in/company-law/corporate-social-responsibility-amendment-section-135.html

SECTION 135 OF COMPANIES ACT 2013

1. Applicability of Section 135:-

As per section 135(1) of Companies Act, 2013, following Companies having,

Net worth of Rs. 500 crore or more

Turnover of Rs. 1000 crore or more

Net profit of Rs. 5 crore or more

Shall constitute Corporate Social Responsibility committee of the board consisting of 3 or more directors, out of which 1 director shall be independent director.

2. Role of CSR Committee:-

Formulate and recommend to the Board, a Corporate Social Responsibility Policy

Recommend the amount of expenditure to be incurred on the activities specified above.

Monitor the Corporate Social Responsibility Policy of the company from time to time.

3. Amount to be Spent on CSR Activities:-

Below is the example for calculating CSR Expenditure:-

Particulars Amount Amount

Net Profits in 3 preceding FY:-

2015-16 25,00,000

2016-17 30,00,000

2017-18 (10,00,000)

Total Net Profit for 3 FY 45,00,000

Minimum amount to be spent on CSR activities in FY 2018-19 (45,00,000*0.02) 90,000

4. Amendments’ in Section 135 of Companies Act, 2013:-

B. Prior to amendment act, if a company has not spent the earmarked CSR expenditure, it had to disclose the reasons in its board report at the annual general meeting of the company.

In this regard, Amendment Act provides that:-

Fund specified under schedule VII are:-

1. Contribution to the Prime Minister’s national relief fund.

2. Any other fund set up by the central govt. for socio – economic development and relief and welfare of the schedule caste, tribes, other backward classes, minorities and women;

Unspent amount on ongoing CSR projects:-

C. The Amendment Act has introduced penal provisions for non-compliance in reporting, utilization and transfer of the unspent CSR amount;

The company shall be punishable with fine which shall not be less than INR 50,000 but which may extend to INR 25 lacs.

Author Comments:-

1. The Central Government is yet to prescribe conditions categorizing ‘ongoing project’ for purpose of section 135(6) of the Act.

2. The Central Government will issue general or special directions for a Company or class of Companies for ensuring compliance of provisions of section 135 of the Act.

3. The amendments to section 135 of the Act have not yet come into force. The Central Government by notification in Official Gazette shall appoint the effective date.

4. With amendment act under section 135 of Companies Act, it becomes imperative for corporate India to ensure adequate compliance of this law.

Ref: https://taxguru.in/company-law/corporate-social-responsibility-amendment-section-135.html

Shale’s Dark Side: Methane Emissions Are Soaring

Sun, 18 Aug 2019 17:59:00 +0000

A new study finds that shale oil and gas is behind the global rise in methane pollution over the past decade, a major source of greenhouse gas emissions.

The study, published in Biogeosciences, was able to separate methane emissions from conventional versus unconventional drilling, as well as methane from other “biogenic” sources, such as agriculture or wetlands. “This recent increase in methane is massive,” Robert W. Howarth of Cornell University, the author of the study, said in a statement. “It’s globally significant. It’s contributed to some of the increase in global warming we’ve seen and shale gas is a major player.”

Methane emissions rose in the late 20th century, and then leveled off in the early 2000s. “Since 2008, however, methane concentrations have again been rising rapidly,” Howarth wrote.

Howarth said that “chemical fingerprints” in the atmosphere point to shale oil and gas, as the methane from unconventional drilling has less carbon-13 relative to carbon-12, which distinguishes it from methane coming from conventional sources, including from gas and coal. Because two-thirds of all new natural gas production over the last decade has come from shale, and because the chemical composition of methane in the atmosphere has changed, Howarth concluded that shale gas is a key driver in the increase of methane.

Prior research did not explicitly focus on the fossil fuel industry, and instead put blame on other sources of methane emissions, such as agriculture and wetlands.

“Previous studies erroneously concluded that biological sources are the cause of the rising methane,” Howarth said. He was able to separate out the source of the increase. The conclusion was clear: “The commercialization of shale gas and oil in the 21st century has dramatically increased global methane emissions.”

Ref: www.Oilprice.com

Doublestar starts up scrap tire pyrolysis plant

Sat, 17 Aug 2019 14:43:00 +0000

Zhumadian, China – Doublestar has started up phase one of a scrap tire pyrolysis plant in Zhumadian, Henan province that is able to handle 100,000 tonne rubber or 10 million passenger car tires each year.

“The plant has been running smoothly for over a month,” said Doublestar Group chairman and general manager Chai Yongsen during his speech at the China Rubber Conference held in Guangzhou.

Located in Zhumadian’s Runan county, the new plant’s phase one has 133,000 m2 land area and received €44 million (330 million yuan) investment.

The 100kt of scrap tires at Doublestar’s new plant would produce 45kt pyrolysis oil, 35kt carbon black, 12kt steel cord and 8kt pyrolysis gas each year, generating €48 million annual revenue.

This is the world’s first plant of its kind with “zero pollution, zero emission, zero residue,” said Chai.

Doublestar also plans to build two more scrap tire pyrolysis plants in Shiyan, Hubei and Qingdao, Shandong.

Ref: https://www.european-rubber-journal.com/2019/08/15/doublestar-starts-up-scrap-tire-pyrolysis-plant/

Pyrolysis is the (only) way

Tue, 13 Aug 2019 08:16:00 +0000

Don’t Just Recycle...Pyrolise

Click to see more

Environmental Factors of Waste Tire Pyrolysis

Thu, 08 Aug 2019 07:23:00 +0000

Just Saw this report and thought could share it

Ref : https://www.academia.edu/33431173/Environmental_Factors_of_Waste_Tire_Pyrolysis_Gasification_and_Liquefaction_California_Integrated_Waste_Management_Board?auto=download

Environmental_Factors_of_Waste_Tire_Pyro.pdf

Tata Steel takes scrap route to scale up long products business

Tue, 06 Aug 2019 14:35:00 +0000

Steel long products are used in infrastructure and construction segment, an area where the government is laying immense thrust to up investments

With limited scope for organic expansion of long products capacity, Tata Steel, the country’s oldest producer of the alloy, will be setting up multiple recycling units in the West, South and North to grow in the segment.

“We will be using the distributor-production modal to scale up long product capacity and hence will not be putting any capital. We will be underwriting the capacity and hence there will be no risk but at the same there is a brand promise,” T V Narendran, chief executive officer and managing director, told Business Standard.

Currently, of the total consolidated capacity of 33 million tonnes, Tata Steel has only 3-million tone long-capacity at Jamshedpur and another one million tonnes via the recently acquired insolvent asset of Usha Martin. Jamshedpur could see an addition of another 2 million tonnes long product capacity leaving no further room to add more capacity at the facility.

Steel long products are used in infrastructure and construction segment, an area where the government is laying immense thrust to up investments.

“The plan is to build steel long product centers where iron ore is less and scrap is in abundance. Also, the unit should be closer to the market as it will keep logistics cost lower,” said Narendran. “We already do a million tonnes rebar through this model and to ensure quality, we have our people at those plants,” he added.

Apart from total 10 million tonnes (of which 3 million is long product capacity) at Jamshedpur, Tata Steel’s Angul (5.6 million tonnes) and Kalinganagar (8 million tonnes) facilities in Odisha produce only flat steel, meant for auto sector.

“The East (part of the country) allows us to build integrated steel plants at the existing plants and we can build up to 35-40 million tonnes as land and opportunities are available,” said Narendran.

Naveen Jindal-led Jindal Steel & Power and state-owned SAIL are the two other large steel long product producers in the country but with integrated steel plants.

India’s scrap steel market is scattered with ship-breaking, construction, auto and power sector, among others being the contributors to the same. “We are setting up the first plant in the North next year. If that one becomes a success, we can scale up this project,” said Narendran.

Ref: https://www.business-standard.com/article/companies/tata-steel-takes-scrap-route-to-scale-up-long-products-business-119080501710_1.html

4th July business world

Sun, 04 Aug 2019 18:31:00 +0000

Our article in the Businessworld- Sun 4th July 2019 http://www.businessworld.in/article/Saving-The-Environment-One-Rubber-Tyre-At-A-Time/03-08-2019-174253/

Corporate Social Responsibility Rules Tightened-The Need

Fri, 02 Aug 2019 01:06:00 +0000

The Companies Amendment Bill 2019 seeks to tighten the Corporate Social Responsibility provisions as enumerated under the Section 135 of the Companies Act, 2013 which presently requires certain classes of Companies to shell out 2% of the average net profits of the Company for the three immediate preceding years towards CSR spending.

The provision also requires the company to specify the reasons for not spending the amount in the Board’s report but there are no penal provisions for not spending the amount. This has resulted into non-compliance of the CSR provisions on a large scale basis and most companies have excused themselves from spending the amount and get away by simply stating vague and fake reasons in their Board’s report. These Companies have compiled huge surplus of the unspent corporate social responsibility amount.

After Companies (Amendment) Bill, 2019

The Amendment Bill 2019 seeks to bring the following changes in section 135 of Companies act 2013:-

(5) The Board of every company referred to in sub-section (1), shall ensure that the 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 or where the company has not completed the period of three financial years since its incorporation [1], during such immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy:

Provided further that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount and unless the unspent amount relates to any ongoing project referred to in subsection (6), transfer such unspent amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year.[2]

The Bill inserts a new sub-section (6), which provides that any amount remaining unspent under sub section (5) pursuant to any ongoing project, undertaken by a company in pursuance of its CSR Policy, shall be transferred by the company within a period of 30 days from the end of the financial year to a special account, named as “Unspent Corporate Social Responsibility Account“. Further, the said amount shall be spent within next 3 years from the date of such transfer, failing which, the company shall transfer the same to the Funds specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year.

Lastly, the Amendment Bill seeks to insert a new sub-section (7), i.e. penal provisions relating to non-compliance of the aforesaid provisions. Accordingly, the company shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to twenty-five lakh rupees and every officer of such company who is in default shall be punishable with imprisonment for a term which may extend to three years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees, or with both.

It is understood that after the enactment of the amendment bill the unspent amount relating to “ongoing projects” shall be transferred to escrow account within 30 days from the end of the financial year for a period of three years from the date of transfer during which it has to be spent for CSR activities and thereafter if there is unspent amount it shall be transferred within thirty days from the date of completion of the third financial year.

In other cases the unspent amount has to transfer to fund specified in Schedule VII, within a period of six months of the expiry of the financial year.

Does this imply that companies have to transfer the unspent amount that has compiled since the enactment of Section 135 of the Companies Act, 2013?

The Government should consider allowing opening of interest earning special account instead of escrow account, for deposit of unspent account by corporate. This will increase the amount to be spent on CSR activities.

It is also necessary that amendment should be made in Board’s Report /Annual forms as well so as to include the details of the special account including the details of amount utilized and balance at the end of financial year to monitor the compliance of the rules.

It is a good move but it is also true that genuine corporate face hardship to find a genuine project and at times the tenure of project extends the financial year.

Ref: taxguru

National Tyre Pyrolysis Corporation Gets Its ISO 9001:205 certificate

Thu, 01 Aug 2019 14:54:00 +0000

Happy to share that We received our ISO Certification Today...One more of our milestones

Europe faces challenges in meeting plastic bottle recovery target

Wed, 31 Jul 2019 18:23:00 +0000

In March, the European Parliament adopted the Commission-proposed Single-Use Plastics (SUP) Directive to increase the recycling of polyethylene terephthalate (PET), the main component in plastic bottles and containers for packaging foods and beverages and personal care products. This development was already supported by a range of international brands through their own recycling pledges.

Today, the results of a study conducted by ICIS on the 2018 market were released, which looked at the supply chain: collection, recycling and end-use of PET. The report is a collaborative effort including national authorities, compliance agencies, deposit return schemes and recyclers. The conclusion is that the PET bottle collection rate in western Europe has risen from 58% in 2016 to 63% in 2018 and is projected to reach 65% in 2019. Under the SUP Directive the industry is required to reach recovery rates of 77% by 2025 and 90% by 2029, but the collection volume growth rate is currently falling. ICIS estimates that the volume of collected material will need to increase by 7% per annum if the 2029 target is to be met.

Helen McGeough, ICIS senior analyst, Plastics Recycling explained the dynamics. “The rise in demand for RPET (recycled PET) began early on in 2018 as supply issues for virgin PET resin carried over from the end of 2017; this pushed up demand from sectors that could easily use either feedstock. This in turn pushed up prices as supply was constrained, since collection activity did not increase in line with demand. The drive for food-grade RPET came later in 2018, once the SUP Directive was passed.

“Despite the boost in demand for RPET, collection failed to match those growth rates, reaching 2.1 million tonnes in 2018 – just 2.4% growth on 2017 volumes. Tight supply saw PET bale prices rise 20% in 2018, compounded by the growth in reclamation capacity during the year that expanded to meet the downstream demand for RPET products.

“The reclamation industry increased production of RPET products by 17% to 1.4 million tonnes and packaging applications absorbed two-thirds of that total. The capacity of food-grade RPET barely had time to build prior to the rush of supply enquires following the signing of the SUP Directive. As a result of the Directive, there was an increase of 13% in food grade RPET prices, which were generally accepted as these prices sat only 7% higher (on average) than virgin PET prices. However, this has changed considerably in 2019 with premiums of over 30% on average, peaking at near 50% so far this year.”

Looking ahead, collection volumes are projected to grow by less than 4% per annum over 2019-2020. If this growth rate is sustained in the longer term, the SUP Directive recovery targets will not be met.

According to ICIS The top seven highest collection rates in 2018 were found in countries with a deposit return scheme (DRS) in place for PET bottle collection, perhaps evidence that such systems are what is needed to produce the outcomes required in terms of quantity and quality improvements. Regulation is seen as the most effective way to drive investment in recycling — but agreeing who pays within the supply chain is an argument that will run for some time.

National Tyre Pyrolysis Corporation, Mumbai

Connect with me at https://www.linkedin.com/in/nikhel

Email: contact@ntpcpower.com

“Don’t just recycle, pyrolise”