Business Mantra News
Applicability of Corporate Social Responsibility (CSR) – Section 135 (1) of companies Act, 2013 mandate CSR on following company:-
- Every company having Net worth of Rs. 500 Crore or more; or
- Every company having turnover of Rs. 1000 Crore or more; or
- Every Company having Net profit of Rs. 5 Crore or more.
Have to spend 2% of their three years average net profit on those activities as mentioned in Schedule VII.
Section 135 of the companies Act, 2013 state that Every company which is entitled to spend some money on Corporate Social Responsibility under this section, are to give full disclosure about it like how much money they have to spend on Corporate Social Responsibility (CSR) and shall constitute a committee called CSR Committee consisting of 3 or more directors out of which one shall be an independent director.
Committee shall do following things:-
- Committee members recommend the Board of the Company about Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company.
- Committee members shall recommend the amount of expenditure to be spend on these activities.
- Committee members shall observe the Corporate Social Responsibility Policy from time to time.
Activities of CSR Expenditure (Schedule VII):-
- Slum Area Development
- Rural Development Project
- Contribution to National Relief Fund or any other fund set up by Central Government.
- Training to promote Rural sports and Olympic sports
- Measures for the benefit of Armed Forces Veterans, War Widows and their dependents.
- Promoting Education including special educations and Employment.
- Contribution to the Swachh Bharat Kosh set up by the Central Government for the promotion of sanitation.
- Ensuring Environmental Sustainability like Contribution to clean the Ganga Fund.
- Protection of National Heritage, Art and Culture; Promotion and Development of Traditional Art and Handicraft.
- Promote gender equality, empowering women, setting up homes and hostels for women, orphans, old age home and day care centers, etc.
The Companies coming under CSR can contribute economically as well as socially to the development of the Nation. This obligation may be legally bound but there is no restriction for others to contribute morally as well.