(Companies Act 2013)

BySibani Swain

Economic AdvisorMinistry Of Corporate Affairs

What is CSR CSR in Companies Act-2013

CSR Committee Mandatory Disclosure(Boards Report)

Schedule VII Educating Voters CSR Rules

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”

Lord Holme and Richard Watts

  Corporate social responsibility encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm.

Harvard University

Companies Mandated to constitute a CSR CommitteeNetworth of Rs 500 Crore or moreTurnover of Rs 1000 Crore or more Net profit of Rs 5 Crore or more

CSR Committee to haveThree or more directorsAt least one is to be an independent director

Board’s Report shall disclose the constitution of CSR Committee

CSR Committee will Formulate CSR policy and recommend to board indicating the activities to be undertaken as specified in schedule vii

Recommend the amount of expenditure to be incurred

Monitor CSR Policy from time to time

Board of Directors will Approve CSR Policy Ensure implementation of CSR policy Disclose the contents of CSR policy in the Board report

Place the same on company’s website, if any

Ensure CSR spending amounting to at least 2% of the average net profit of the preceding three financial years

Board’s Report shall specify the reasons for not spending the specified amount

There is no penalty for failure to spend 2% of net profit on CSR

Eradicating extreme hunger & poverty Promotion of education Promoting gender equality and empowering women Reducing child mortality and improving maternal health Combating human immunodeficiency virus, acquired

immune deficiency syndrome, malaria and other diseases

Ensuring environment sustainability Employment enhancing vocational skills Social business projects Contributions to Prime Minister Fund or any other fund

set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Caste and Schedule Tribe

such other matters as may be prescribed

Thrust is on Women’s participation in Electoral Process

Activities included in schedule VII of the Act covers ‘Gender equality and Women’s empowerment’

Corporates are free to formulate CSR policy including projects/programme to be undertaken, amount to be spent, community/geographical area to be covered etc.

The Act provides that the company shall give preference to the local areas

Specifies operational provisions of the CSR policy Hosted on MCA’s Website on 9th September,2013

for inviting Public Comments Includes provisions for implementing agencies,

pooling of resources by two or more corporates, CSR coverage etc. as well as format for reporting

Feedback Received on Number of issues includingActivities covered under schedule VIITax exemption on CSR spendingComposition of CSR Committee CSR rules are being finalized after taking into account stakeholders’ comments.