CSR CONSULTANT

CSR Statutes


CSR Statutes

In India, CSR Concept is governed by following statutes:

  1. Section 135 of Companies Act 2013
  2. Companies ( Corporate Social responsibility policy) rules 2014
  3. Schedule VII of Companies Act 2013 defining activities eligible for CSR

CSR Provisions are applicable from Financial Year 2014-15 to companies with

  1. Annual turnover of 1,000 crore INR and more, or
  2. Net worth of 500 crore INR and more, or a
  3. Net profit of five crore INR and more

New rules require companies to constitute CSR Committee having 3 directors or more, out of which one director needs to be an independent director. CSR Committee shall:

  1. Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be performed by the Company as specified in Schedule VII.
  2. Recommend the amount of expenditure to be incurred for the activities referred in aforementioned clause (a)
  3. Monitor the Corporate Social Responsibility Policy of the Company from time to time

Board of the Company shall ensure that

  1. Approve the CSR policy formulated and recommended by CSR Committee and disclose contents of Such policy in its report , or on its website, if any or in such manner as may be prescribed.
  2. Ensure that the activities as included in CSR policy are undertaken by the Company.
  3. Company spends in every financial year, at least 2% of the average net profit of the Company made during the 3 immediately preceding Financial Years

CSR activities can be implemented by the Company any of the following means

  1. By setting its own non-profit foundation.
  2. Through a independent registered trust, society or company , that have an established track record of three years in undertaking similar programs or projects.
  3. Collaborating with other companies

Restriction on the amount qualified as CSR Expenditure

  1. CSR activities undertaken in India shall only amount as CSR expenditure.
  2. CSR Activities that only benefit only the employees of the Company and their families will not be considered as CSR activities for the purpose of the Act.
  3. Contribution of any amount directly or indirectly to any political party will not be considered as CSR Activity

 

In Schedule VII, of the Companies Act, activities which may be included in the CSR policies are as follows:

  1. eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water;
  2. promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;
  3. 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;
  4. ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water;
  5. 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;
  6. measures for the benefit of armed forces veterans, war widows and their dependents;
  7. training to promote rural sports, nationally recognized sports, Paralympics sports and Olympic sports;
  8. 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 Caste, the Scheduled Tribes, other backward classes, minorities and women;
  9. contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;
  10. rural development projects;
  11. slum area development