CORPORATE SOCIAL RESPOSIBILITY

                                                                                                                                                                 corporate social responsibility (CSR) is a new concept of the company’s act 2013. According to sec. 135 every company registered under the companies’ act 2013 and company registered under company act 1956 shall spend 2% of average net profit of the company made during the three immediately preceeding financial year on CSR activities if satisfy any one condition which are stated below :

                                                Net profit >=500 crore.

                                                                   OR

                                                Turnover >=1000 crore.

                                                                   OR

                                                Net profit >= 5 crore.

During any financial year.

Composition of CSR committee:

                                                                   The CSR committee shall be consisting of minimum three director and out of which at least one director shall be independent director.

Exception:     (1) unlisted public company or private company which is not required to appoint independent director shall constitute CSR committee without independent director.

(2). A private company having only two directors on its board shall constitute CSR committee with two such directors.

(3). In case of foreign company, the CSR committee shall comprise of at least two persons of which one person shall be as specified under section 380(1)(b) of the act and another person shall be nominated by the foreign company.

Duties of CSR committee :

Ø  Recommend the CSR policy to the board.

Ø  Recommend the amount of expenditure to be incurred on CSR policy.

Ø  Monitor the CSR policy of the company from time to time.

Duties of board:

Ø  Approve the CSR policy on the basis of recommendation made by the CSR committee.

Ø  Ensure that the activities included in the policy are undertaken by the company.

Amount of contribution towards CSR:

                                                                                  2% of the average net profit of the company made during the three immediately preceding financial years.  Net profit shall be calculated in accordance with the provision of sec. 198.

CSR reporting:

                                (1). The board’s report of a company covered under this rules pertaining to a financial year commencing on or after the 1^st day of april 2014 shall include an annual report on CSR.

                                (2). In case of foreign company, the balance sheet filed under section 381(1)(b) shall contain an annexture regarding report on CSR.

                                (3). If the company has any website the CSR policy should be displayed on the company’s website.

 Which activities would not qualify as CSR:

Ø  Projects or programmers that benefit only the employee of the company and their employees.

ØOne-off events such as marathons/awards/charitable contribution/advertisement/sponsorship of TV programmesetc.

Ø  Expenses incurred by companies for the fulfillment of any other act/statute or regulation.

Ø  Contribution of any directly or indirectly to any political parties.

Ø  Activities undertaken by the company in pursuance of its normal course of business.

Ø  The projects or programmes or activities undertaken outside india.