(Cont.

)
es 2.249
A c c o u n i s

Company
I:
Section

ive
Chapter

CONTEMPORARY ISSUES
5 ANDCHALLENGES

= Learning Objectives

should be able to:

you
this chapter importance of humar resource accounting;
studying and imp
After the concept
understand
environmental accounting:
of
signiñicance
the nvironmental reporting practices in India;
3ppreciate envi
corporate
nderstand
the
und ventional financial statements;
limitations
of conver

state
the evel Accounting and Inflation Accounting;
differentiate between Price-Leve

different method
ods of accounting for changing prices;
the
understand

of social responsibilities by corporates:

the need benefit analysis in India;

appreciate cost
corporates
are
who a r reporting for special
e n u m e r a t e

for recognition of a stock exchange and various requirements as to

understand the procedui
stock exchange; and
securities on a
listing of
terms.
d e f i n e certain key

ACCOUNTING
1. HUMAN RESOURCE

Introduction
business or otherwise, to a great extent,
any of organisation,
widely accepted fact that
success
It is a An organisation having
calibre and character of the people working in it.
depends upon the quality, find itself in the midst of
severe financial

vast physical resources, with

latest technology, may of
to manage and
conduct its affairs. Thus, in spite
crisis in case it does not have right people no way diminished.
It
of human resources has in
all technological developments, the importance evolve a generally
accountants have not
been in a position, to
IS unfortunate that even till now
resources.
the human
accepted system to value and record
this important asset, viz., One may recall,
an asset is an old phenomenon.
human beings as nine jewels (courtiers). ne
ne concept of considering Akbar gave to the
which,emperor Shri Motilal
nis connection, the importancewill not be complete without mentioning the names of
Our freedom movement
y Or Vallabhbhai Patcl and several other
Sardar
distinguished freecdom Sncet
Gandhi, Balance
L, ahatma made to assign any monetary value to such
individuals in the
no effort was
ver,
of the nation or of the organisation. Sir William Peuy as
was made by ded
in monetary terms
to value the human beings and it mustbein
empt father of wealth"
that labour was "the WIllam r a r
F e t t y was of the opinion connection, were made by
wealth. Further efforts, in this
natonal
853, EarnestOEngle in 1883
by the same
authors and pub
aSplease refer to Advanced Accountanc, lol. I (2018)
 Company Accounts behavioural
scientists
vehemently
ve

when r e s o u r c e s
with
along w other
2.24 from 1960,
s arted human

However, the real work on the subject became conscious

the of
the world
valuing

criticised, the conventional accounting

ractice
ofnot for finding find the cost
odeveloped for
ove
all
accountants andl
economists
economists

have to
be a developed
er of experts have
material resources.As a result, procedures a
number

methodology andj
decades,
n o t a b l e .among them
the fact that the appropriate r a periodof
three The
Morese (1973) 973), Lav
r e s o u r c e s

and value ofthe people to the organisatio

human
evaluating 1975),
certain models for 1972 and
worked on it and produced Flam Holtz
(1971,
ec.
(1967).
are Shultz (1960), William C. Pyle(1 Kenneth
Sinclare (1978),
Lav (1974),
and schwartz (1971), Jaggi and
of accounti nting and
Resource Accounting
areas
in the
Concept of Human different experts has come into being,.
studies
conducted by Accounting

As a result of the various 'Human

Resource
traditional practice of treating
known as
new branch
accounting
of that the of the period
a this concept the
revenue
inance, primarily
based on
against
branch of accounting is immediate charge assets. AS a matter of
hisexpenditure on human capital formation as a in physical future
all comparable outlays order to yield
accorded to incurred in
not consistent
with the term when it is
S
asset should
be capitalised
incurred on any
the cost some
Tact, if one goes through
benefits measurable in
monetary terms. understood
accounting can be better freld.
of human in the accounting
resource
Ihe concept
competent
authors defines it as
definitionsgiven by the human resource
accounting
of the important Commiitee on

The American Accounting Society

data about human
and measuring
follows: of identifying
Human resource accounting is the process
interested parties."
this information to
and communicating defines it as follows:
of R.G. Barry Corporation
resources
President investments made in
human
Mr. Woodruff Jr., Vice and report
to identify
"Human r e s o u r c e accounting
is an attempt
for in conventional
accounting practice.
presently not accounted
that are time are occurring
resources
ofan organisation that tells the management
what changes o v e r
information system
Basically it is an business."
u r c e s of the and presenting
to the human is the art of valuing, recording
r e s o

human resourcé accounting Thus there

In simple words, books of account of an organisation.
human resources in the
of
systematically the worth
of human r e s o u r c e accounting:
are three important aspects
human resources.
() Valuation of
valuation in the books of
account.
ii) Recording the of the business.
Disclosure of the information in the financial statements
(ii)

Importance of Human Resource Accounting

useful information to the management, financial analysts
Human Resource Accounting provides
and employees, as shown below:
to
the management in the decision-making process relating
1. Human Resource Accounting helps
the various matters.
utilisation of human resources.
(a) Employment, locating and
(b) Transfers, promotion. training and retrenchment of human resources.
assets vis-a-vis human resources.
(c) Planning of physical
incurred for to
(d Evaluating the expenditure imparting further education and training
employees in terms of the benefits derived by the fim.
 lssues and
of high labour turnover at various
Challenges 2.249
l d e n t i f y i n g t h e c a u s e s . o f

levels and
(e) to
contain
it. taking preventive
of low return on vestment, that is
measures

of.
thereal
cause

sical assets or human resource or both.

ether it is due to
under-utilisation ofphysic
Locating
improper or
financial
analyst is
interested
inner
l depend on the physical assets owned and strength of firm. Such
in
understanding and assessing the
A n o t merely
2.
inner
strength
resources available to the firm.
the type of hum
does
possessed by the fim. It
so
depends upon an steer the company well through most The vigilant, dynamic and
nsible mansthe adverse and
In the lhuman resources, specially the
case
managerial unfavourable
cumstances.

impartia
and are
resource
svstematically valued and disclosed in the financial
firm
of the
aluable information for persons interested in making long-term invest statements.
firm.
Pecource Accounting helps indiviaual employees in
their performan
argaining power. It makes each or them consCious of the contribution that he. ance
improving
dhe hetterment of the firm vis-a-vis the expenditure incurred by the firm
towar
on him.
Human Resource Accounting
0biections Against
The following are some of the common objections against Human Resource Accounting.
Luman being cannot be owned like other pnysical assets. Ihey, therefore, cannot command anv
value.
2. Tax laws do not recognise human beings as assets. Hence, human resource accounting remains
merely as a theoretical concept.
3There is no generally accepted model for valuation of human resources. The mode of presentation
has also yet to be codified
4. The valuation of human resources depends on a large number of abstract factors not measurable
in precise monetary terms. Hence, the valuation lacks objectivity and preciseness.
The above objections are basically because of human resource
accounting being a new concept.
The opinions are still to be erystalised. It is yet not less satistying that the accountants these
days
have realised that disclosure of human resources in the financial statements "is a must" if
they
have to show a true and fair view of the state of affairs of the business. In course of
time, proper
techniques are bound to be developed for valuation of human resources and generally acceptable
formats will be evolved by the accountants for disclosure of this vital information in the financial
statements of the fim.

2. ENVIRONMENTAL OR GREEN
ACcoUNTING
Meaning
.nvironment' includes everything in all its manifest forms; on the earth, bencatn tne
of
of ebove the earth. All over the world, there has been much concern regarding managen
o r ensuring sustainable economic development. Sustainable env n
development
r omay
without pcompro be defined as the development
n i s i n g the ability of that meets
future generations
the needs of the present generauon
to meet their own needs.
In torder to, to
be

preserving eco-syste fim. In order D

thebecome
o

àgood corporate itizen,

Cal firm as
has to adopt policies
maintaining long-term take actionofthat
andprofitability environment
ot more
details. Pdse
plea Teter to anu
shers.
Ahanced Accountancy, Vol. I1 (2018) by the same authors p
2.250 Company Accounts

c h d i y n e companies must develop strategies which translate actions into benefits. improve their

environmental pertormance and meet the environment demands placed upon them by o criment
and shareholders.
The business nation's natural
activities of every enterprise are affected by a
water. air, minerals, forests. etc. or termed as Environment in common parlance. Similarly. the
resources.
functioning of an enterprise also affects the environment. Hence. it is necessary to maintain proper

accounting records displaying the impact of a business enterprise

Environmental accounting faithfully performs this function.
on environment
andice versa
It is a new concept and is gaining

awareness. It is a
method ot record1ng
Onous popularity because of greater environmental
environmental events. It includes the evaluation of natural resources. measuring the income
therefrom, keeping a record of the cost relating to them, estimating their quantities and providing
and
depreciation on them. It includes management of environmental costs etfectively. presenting
costs involved
disclosing environmental information in a suitable form. The various environmental
are as under:
(i). Capital expenditure incurred for acquisition of equipments required tor environmental

protection.
(i) Operating and maintenance cost ofthe equipments acquired as above
(iii) Waste management costs.
(iv) Contingent costs which may arise due to possible liability under environmental laws.

Significance of Environmental Accounting

) Discloses utilization of natural resources. Environmental accounting is helpful in presenting
in a transparent manner. the utilization of natural resources of the country, the costs incurred
to use them and the income earned therefrom
() Social contribution by corporates. Environmental accounting helps in measuring
the contribution made by various corporations or companies in fulfilling their social
responsibilities.
i ) Environmental protection. A business enterprise does not live in isolation. In order to
maximize wealth, it takes support of social and ecological systems. Environmental accounting
helps in measuring the extent to which a corporate enterprise has utilized the environmental
resources. In any ease, it has to be seen that a business enterprise in the course of their
business activities does not vitiate. pollute or endanger environment. As a matter of fact, a
number of laws have been enacted in our country to protect the environment.

Areas covered
Environmental Accounting can be understood trom the tollowing two broad perspectives:

(1) National Level Environment Accounting. and

(2) Corporate Environmental ccounting.
Each of the above areas are being explained below:
(1) National Level Environmental Accounting National level environment
includes a set of aggregate national data which will have a long-term impact on the economic and
accounting
environmental policy-making. Thistype ot accounting requires necessary alternations to be made in
the Svstem of National Accounts (S.NA) tor incoporating their use, on account of reasons discusscd

later on depletion of national resources, National accounts are prepared by all countries with a
uniform pattern developed by the United Nations Statistical Division. Such a common framew ork
of prenaration of the accounts helps eacn maividual country to compare its performance wth the

performance of other countries

 Contemporary Issues and Challenges 2.251
of
of national accounts
format
does not
ns.
The present

The following are a few limitations:

provi a full
environme
sources.
of environmental expenditure.
economic value of
(a) Non
cognition
or p r e v e n t i n g
it from deo
adation Expenditure incurred
cannot be to
environment
tional accounts. sepa ated
from the SNAprotect the
system
of natio
the presed goods
resent
data as per
oods aand services. Enviror vides
not sold in the
e t These may include
mar
certain goods
which are
medicinal plants, etc. Some countries firewood, building
butare
value
forests, do not
incorpor materials
ials generated
national account unts. However, they compute the marketable value of these goods
it as a basis for valuing non-markete goods and services. similar products and use
ofof na.
Consumption natural capital. The system ot national accounts
treats the
ofphysical
assets such as plant and equipment as depreciation. gradual denleti
larly the forest is treated as income. Ihis seems However, depletion of natiuraal
to be an
l l he appropriated to treat the depletion of natural inconsistent approach
of physical assets.
capital on the pattern that of denletio
National level of environmental acCcounting should cover the
( Concept of national 1ncome arising out of use of natural following issues:
resources.
(n Concept of costs incurred to make use of such resources.
(ii) Depreciation of natural resources.
(iv) Valuation of natural resources.
()Disclosure of natural resources in the balance sheet.
(vi) Contribution of natural resources to the
industrial development of the
(vii) Contribution of industries to the country.
United Nations, country's environment.
keeping the above facts in mind, has also suggested certain steps for amending
the system of national accounting. The United
Nations, The International
worid Bank have also emphasised the need for development of nationalMonetary Fund
and
level environmental
accounting to ensure better
(2) Corporate decision-making.
Environmental Accounting In recent years, the public concern about adverse
at on environment due to business activities is growing. As a result, tarted
gqualitative and quantitative information about showing their role compancs
is
a and
forA of improyc
environment. However, the mode of recording and presentation of suchintor on

Stand Corporations in different countries has not been uniform. The Internano
accounting
Standar mmittee is now, therefore,
workingaccounting
ring uniformly in the environmental
to form the global
protection throughout the world
environmental

The following prise:

O I the environmental issues which are pertinentto businesscn
mental protection
policy and programme adopted by the ente:erent key areas
e n t s effected since the introduction of environmental po
over the
period at least 5 years, whichever is shorter. achieveds
nental emission targets set by the enterprise for data and progress

iv) The dhaveen due to

governmer

been taken
due to
extent to which environmental protection measures
taken

( legislation. environmental
laws.
law

Legal
vi) Fir proceeedings taken against the company for material
violation
of o t e c t i o n m e a s
ures.
u r e :

implications of short-term and long-term enviro

Corporate Environmental ment

In
of
view of the
environmen
Reporting in India in the
accounting wn way,
their
own

dl
public concern about environment and the
Diic
ambiguity
er,
in

costs and liabilities, the corporate undertaking

2.252 Company Accounts

role play ed by them

have started disclosing both qualitative and financial information about the
in the improvement and maintenance of environment. In India. the corporate sector is making
and also on their own as
environmental disclosure both on account of statutory requirements
discussed below:
environmental disclosure in Annual Accounts
i) Statutory disclosure. The legal provisions as to
Directors" Report shall
are 134(3) of the Companies
minimal. Section Act. 2013. provides that the

include the particulars as to "Conservation of energy. technology absorption.

foreign exchange
the Government of India
be prescribed". Consequently.
earnings and outgO in such a manner as may
has prescribed the follow ing information to be given as per Companies (Accounts) Rules 2014
particulars ith respect
Board of Directors. disclose
w
"Every company shall, in the report of its
to the following matters, namely
(a) The steps taken or impact on conservation of energy:
alternate sources of energy:
(b) The steps taken by the company for utilizing
(c) The capital investment on energy conservation equipments
in India. on their own are giving
(ii) Voluntary disclosure. Many corporate enterprises
them in environmental protection. Such
information in their Annual Reports on the role played by
and their inclination to protect
information shows their concern about their social responsibility
Some of the companies which are making
the interest of both the present and future generations.
Industries Limited, Goodless Nerolac Paints
such disclosures are: Asian Paints Limited. Chloride
India Limited. Hindustan Lever Limited, ete.
Limited, Maruti Udyog Limited. Steel Authority of

3. INFLATION AND ACcOUNTING

Meaning and Relevance of Inflation

of not only aware but is also experiencing. The direct
concept of which each one us is
Inflation is a
of money over a
has been a continuous erosion in the purchasing power
consequence of inflation
rate of inflation that has gripped
almost all economies of the world has
period time. The
of high
consumers, academicians, corporate managers, politicians
forced persons from all walks of life eg
means to deal with the various
difficulties created by it. Of course, there
etc., to find out ways and tendencies have
well as deflationary tendencies. The inflationary
have been both inflationary as countries ofthe
1931 they have been dominating the economies of all
been more frequent and since these
that in spite of all physical and monetary measures,
world. It is increasingly being accepted in the
era of stable prices
seems unlikely that we will return to an
tendencies are likely to stay and it
near future.

Statements
Limitations of Conventional Financial
conventional or historical cost
The income and the balance-sheet prepared according to
statement
of criticism by accountants, investors, financial analysts,
accounting system have been the subject
etc. on account of the following
reasons:

) Fail to disclose current worth enterprise

ofthe
The financial statements prepared under the conventional system are merely statements of historical
facts. They do not purport to show the true current worth of the enterprise.

(ii) Contains non-comparable items

are not comparable since they areusually a composite
The financial statenents contain items which
of historical and current costs. For example.
if a company constructed a building for a sum o
I For more details, picase refer to Advanced Accountancy, Vol Ii (2018) by the same authors and publishers
 Contemporary 1ssues and
5,00,000 in 2005 and it constructed a similar building in 2009 at a Challenges 2.253
of building will be shown in the
Building 2005)
balance sheet at the end of
2009 as cost20,00,000, the total
follows: cost
Building (2009)
5,00,000
20,00,000
25,00,000
The etfect of non-comparative lens can also be
proved by taking items
For example. the following are the figures of sales for three years. from the
income statement.
Year Sales
2009 1,00,000 Average Price Index
2010 1,50,000 100
2011 2,00,000 200
the end 275
The index
nrice at of 201T 1s 500. In case, the
figures sales are compared
level adiustment, it appears that there has been a continuous ofincrease withoit the
in sales over a
-

years However, if they are adjusted taking into consideration the period of three
ee
situation would be different as shown below: change in the price level.
the real
Year Average price Unadjusted Conversion
index Revised
sales factor sales
2009 100 1,00,000 300/100
2010 200
3,00,000
1,50,000 300/200 2,25,000
2011 275 2,00,000 300/275 2,18,182
The above table shows that the figure of sales, when adjusted for price level
showing a constant declining trend. changes. are

(ii) Creates problems at the time of replacement

According to the conventional method, depreciation is charged on the historical cost of the asset.
Problems may, therefore, arise when the asset has to be replaced and larger funds are required on
account of inflationary conditions. For example, if a machinery were purchased for | lakh and
its life was expected to be 10 years, the same asset can be purchased for 1.50,000, the firm may
have to face serious problems because if insufficiency of funds. The main purpose of providing
depreciation may, therefore, be defeated.
(iv) Mixes holding and operating gains
In conventional
accounting gains on account of holding the inventories may bemixed upin Witn tne
2010. t
gains. For business 100 units of a product at 7 6 per unit
operating example, a purchased
COuid sell only 50 of such units in that year. In 2011, it purchases another 100 units attd per u
ounting
and sells all 150 units at 10 per unit. In such a case the profit in 2011 as per histonu d
will be as follows:
Sales (150 units x 10) 1,500
Less: Cost 1,100
ofsales (50 x 6+ 100 x 8) 7400 ot
account
on
x 2) is only
100 (i.e. 50 - 1991, the
protit
d mater of fact, out of the profit of 7 400, a sum of7 during
purchased 3 0 0 is
holding the inventory. This is because if all the units sold hado protit ofit while
100 is the holding
distinction.

« this
Ould have been only 7 300 (i.e., 150 units x 2). Thus, does not
make
above,
Operating profit. The historical accounting system, as s profits
the reported
nventional or historical

conditions
In general, it can be said that under inflationary
and
n according
to
conve

heavy
taxatid

it brings
assets, are under-stated are
when accounts
orepared
problems,
viz,
M o r e o v e r ,

of
accounting. erreporting of profits gives risefinancial number o n e r o u s

to a
the
company.
more

on has put
dividend, etc., resultir ultimately in heavy strain
tements.
All
this

heavy erosion in the pretative value of financial

Drucker
ponsibilities on management as observed by Peter
 2.256 Company Accounts

Ihe method, on the face. appears to be a satisfactory compromise formula but its acceptance
may prove diflicult because of theoretical objections against such a compromise. Moreover, the
method is also subject to the limitations of both CCA and CPP methods.
The method is still in its evolutionary stage and suggestions varying in nature and implications
would continue to be made in the coming years. It will take a long time before a set of well defined
procedures and guidelines is developed. The method cannot, therefore, be recommended for practical
application at the present moment.

4. SOCIAL RESPONSIBILITY ACCOUNTING

Concept of Social Responsibility

A business organisation is also a social unit. It uses the society's resources and produces goods
and services for which the society is the ultimate consumer. Thus, a business unit owes its very
existence to the society. It is, therefore, necessary that a business should operate within the overall
parameters determined by the society. Of course, profit-making is one of the main objectives of the
business. However, no business, big or small, can be allowed to exist if its existence is detrimental
to the interests of the society. Similarly, the society is also to see that such business activities should
be undertaken which are beneficial to the society as a whole. Keeping this objective in view, the
Governments, both in free and controlled economies, enact such appropriate legislation for regulating
growth and development of business, which they consider necessary in the overall national interest.
For example, in India, there are certain fields in which the private sector is not allowed to operate at
all, while there are certain areas which have been absolutely reserved for the small sector and still
there are areas where both public and private sectors can operate singly or in joint collaboration with
each other. The basic philosophy behind this arrangement is that all sectors of the economy, public
or private, small or big, should work for the overall good of the society.
Concept of Social Cost Benefit Analysis
The concept of social responsibility has given rise to the concept of social cost benefit analysis.
It is being increasingly realised that commercial evaluation of industrial projects is not enough to
justify commitment of funds to a project specially when it belongs to the public sector. As a mater
of fact, hundreds of crore of rupees are committed every year to various projects in the public sector.
concerning either with development of infrastructure facilities or otherwise necessary in the general
good of the society. Evaluation of such projects cannot be done strictly on commercial principles.
Their evaluation should rather be done keeping in view the social cost and benetits associated with
them.
The concept of social cost benefit is now increasingly applied to the private sector also. The
private sector also uses the resources of the society and, therefore, it has moral responsibility to
undertake only such projects which are socially desirable. It should, while analysing capital
expenditure proposals, keep in view the social contribution aspect. In other words, besides
commercial viability of the project, it should also see the associated cost and benefits to the society.
It should not undertake a project which will result in heavy social cost to the society, though it may
be a commercially viable proposition.
The concept of social cost benefit has now started taking practical shape. The Planning
Commission has already decided that in future the feasibility studies for the public sector
projects
will include an analysis of the social rate of return. In the case of private sector also, a socially
beneficial project may be more easily acceptable to the Government and hence the social cost
benefit analysis will be relevant while granting various licences, approvals, etc. Moreover, with the
I For more details, please refer to Advanced AccountanCy Vol ll (2018) by the same authors and publishers
 Contemporary Issues and Challenge
of socia responsibility,
lisation
only ultimately
those
ngeonges 2.259
presen p.ch
to survive which do
not go against
the interest of the society
neral. organisations are bo
eral. Hence
Hence, social cost forr tthe
for all projects whether in the public or
evaluationis.beneficial private sectors. benetr with
Social Accounting

is
concerned with
ed wi the measurement and disclosure
of costs and
accounting
Social anerating activities of a business enterprise. Thus, benefits to the
as a res social accountino me
sOciety
and social
henefits
benefits:as a result of businesS activities Ior sures
communication to various grouns
socialcosts outside the business. ps
and
both within
oted tthat
noted social accounting is not the application of a new set of accounting nrincinlac
It may be
tis
It is the application of the same basie accounting principles for measuring and
or
practices.
disclosing the extent, to which a business enterprise has met its social responsibility. Seidler ha
refore., defined social accountings as "modification and application of conventional accountine
theret
solutions of problems of a social nature."
to the analysis and
The objective of social accounting can be summarised as follows:
Measurement of Net Social Contribution. Social accounting aims at identifying and measuring
the
the periodic net social contribution of a firm. This
and
includes
aggregate
the
of
net benefits to the
general public.
company's employees, to the community (i.e.,
local population) to

2. Balance between Firm's Strategics

and Social Priorities. Social accounting helps in
are consistent with the legitimate individual
determining whether the firm's strategies and policies
the community and the society.
aspirations and also with the overall priorities of
aims to make available information of a
3. Communication of Information. Social accounting
of the society
contribution to social goals, etc. to all segments
im s goals, policies, programmes,

Social Cost Benefit Analysis in India

to provide details
of social
social costs and
obligation on companies in India
TE S nolegal some companies
in privateand puDieas
preparing their financial statements. However, and beneits
Cswhile information the details ofsocial
costs
means of supplementary
d r e giving by are as follows:
4TEsult of their operations. Some of these companies

1. Tata Iron and Steel Co.

Ltd.
Frojects and Equipment Corporation ofIndia
3. Bharat Heavy Electricals Ltd.
4. Indian Petrochemicals Corporation Ltd.
Cement Corporation of India.
0. Bharat Petroleum Corporation India Ltd.
Neyveli Lignite Corporation Lta.
8. Oil India
Ltd.
9.
Cochin Refineries Ltd. Ltd.
10. The Minerals of India
& Metals Trading Corporation
1. Indian Rare
Earths Ltd.
2.Madras Refineries Ltd.
13.
Oil& Natural Gas Commission. Section
135
of
the

orporate Social Responsibility orporates,

Wthth aa view to have greater towards

society oy u
responsibility
mDani
panies Act, 2013 provides for CSR as
as under
under
2.258 Company Accounts

(i) Provisions applicable to every company having:

(a) net worth of R 500 crore or more; or
(b) turnover of 1,000 crore or more; or
(c) net profit of 5 crore or more during any financial year.
(ii) Board of Directors of such companies are required to spend., in every financial year, a
minimum 2% of the average net profits of the company made during the 3 immediately
preceding financial years, in pursuance of it's CSR Policy.
(ii) Such companies, are required to constitute CSR committee of its Board of Directors which is
responsible for formulating and recommending to the BOD the CSR Policy of the company.
(a) eradicatinghunger, poverty and malnutrition. [promoting health care including preventive
health care) and sanitation [including contribution to the Swach Bharat Kosh set-up by
the Central Govemment for the promotion of sanitation] and making available safe
drinking water,
(b) promoting education, including special education and employment enhancing vocation
skills especially among children, women. elderly, and the differently abled and livelihood
enhancement projects;
(c)promoting genderequality, empowering women, setting up homes and hostels for women
and orphans; setting up old age homes,
day care centres and such other facilities for
senior citizens and measures for reducing
inequalities faced by socially and economically
backward groups;
(d)ensuring environmental sustainability, ecological balance, protection of flora and fauna,
animal welfare, agroforestry, conservation of natural resources
and maintaining quality
of soil, air and water [including contribution to the
Clean Ganga Fund set-up by the
Central Government for rejuvenation of river
Ganga);
(e) protection of national heritage, art and culture
sites of historical importance and works of art,
including restoration of buildings and
development of traditional arts and handicrafts;
setting up public libraries; promotion and
(measures for the benefit of armed forces veterans, widows and their dependents;
war
(g) training to promote rural sports, nationally recognised sports,
Olympic sports; paralympic sports and
(h) contribution to the Prime Minister's National Relief Fund
or another fund set
the Central Government for socio-economic up by
development
Scheduled Castes, the Scheduled Tribes, other backward
and relief and welfare of the
(i) contributions or funds provided to classes, minorities and women;
technology
institutions which are approved by the Central
incubators located within academic
Government.
) rural development projects;
(k) slum area development.
Explanation- For the purposes of this item, the term 'slum area' shall mean
as such by the Central Government or am any area declared
Stale Government or other
any law for the time being in force. any competent authority under

5. STOCK EXCHANGES

Meaning and Role of Stock Exchange

Every company interested in getting in its securities purchased and sold on a stock
get it listed on the concerned stock exchange. exchange has to
I For more details, please refer to Financial Management: Principles & Practice (2014j) by
by Sultan Chand & Sons. Dr. S.N. Maheshwari published