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    Corporate Social Responsibility

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    sakshi chauhan
    Corporate Social Responsibility (CSR) refers to companies integrating social and environmental concerns into their business operations. The document outlines the requirements for companies to form CSR committees based on their size. It describes the composition of CSR committees and their duties to formulate CSR policies. The document lists exceptions to CSR activities and specifies activities that qualify under CSR policies, such as eradicating hunger and promoting education. It concludes with penal provisions for non-compliance with CSR requirements.

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    Corporate Social Responsibility

    Uploaded by

    sakshi chauhan
    5 views3 pages
    Corporate Social Responsibility (CSR) refers to companies integrating social and environmental concerns into their business operations. The document outlines the requirements for companies to form CSR committees based on their size. It describes the composition of CSR committees and their duties to formulate CSR policies. The document lists exceptions to CSR activities and specifies activities that qualify under CSR policies, such as eradicating hunger and promoting education. It concludes with penal provisions for non-compliance with CSR requirements.

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    Corporate Social Responsibility (CSR) refers to companies integrating social and environmental concerns into their business operations. The document outlines the requirements for companies to form CSR committees based on their size. It describes the composition of CSR committees and their duties to formulate CSR policies. The document lists exceptions to CSR activities and specifies activities that qualify under CSR policies, such as eradicating hunger and promoting education. It concludes with penal provisions for non-compliance with CSR requirements.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    5 views3 pages

    Corporate Social Responsibility

    Uploaded by

    sakshi chauhan
    Corporate Social Responsibility (CSR) refers to companies integrating social and environmental concerns into their business operations. The document outlines the requirements for companies to form CSR committees based on their size. It describes the composition of CSR committees and their duties to formulate CSR policies. The document lists exceptions to CSR activities and specifies activities that qualify under CSR policies, such as eradicating hunger and promoting education. It concludes with penal provisions for non-compliance with CSR requirements.

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    CORPORATE SOCIAL RESPONSIBILITY

    Corporate Social Responsibility (CSR) implies a concept, whereby companies decide to


    contribute to a better society and a cleaner environment – a concept, whereby the
    companies integrate social and other useful concerns in their business operations for the
    betterment of its stakeholders and society in general.

    Companies required to constitute CSR committee:

    According to section 135(1), every company having

     net worth of rupees 500 crore or more, or


     turnover of rupees 1000 crore or more, or
     a net profit of rupees 5 crore or more
    During the immediately preceding financial year shall constitute a Corporate Social
    Responsibility Committee.
    Every company which ceases to be a company covered under subsection (1) of section
    135 of the Act for three consecutive financial years shall not be required to comply
    with the provisions of the Act.

    Composition of CSR Committee:

    The CSR Committee of the Board shall be consisting of three or more directors, out
    of which at least one director shall be an independent director.

    Provided that where a company is not required to appoint an independent director


    under sub-section (4) of section 149, it shall have in its Corporate Social Responsibility
    Committee two or more directors.
    According to Rule 5(1) of the Companies (CSR) Rules, 2014,
    The companies mentioned in the rule 3 shall constitute CSR Committee as under:
     an unlisted public company or a private company covered under subsection (1) of
    section 135 which is not required to appoint an independent director pursuant to
    sub-section (4) of section 149 of the Act, shall have its CSR Committee without such
    director ;
     a private company having only two directors on its Board shall constitute its CSR
    Committee with two such directors;

    Duties of CSR Committee [Section 135(3)]:


    The CSR Committee shall:
     formulate and recommend to the Board, a CSR Policy which shall indicate the
    activities to be undertaken by the company in areas or subject, specified in Schedule
    VII;
     recommend the amount of expenditure to be incurred on the activities referred to
    in clause (a); and
     monitor the CSR Policy of the company from time to time.
    Exceptions to CSR Activities:
    The Companies (CSR Policy) Rules, 2014 provides for some activities which are not
    considered as CSR activities:
     The CSR projects or programs or activities undertaken outside India [Rule 4(4)].
     The CSR projects or programs or activities that benefit only the employees of the
    company and their families [Rule 4(5)].
     Companies may build CSR capacities of their own personnel as well as those of
    implementing agencies through Institutions with established track records of at least
    three financial years but such expenditure including expenditure on administrative
    overhead shall not exceed 5% of total CSR expenditure of the company in one
    financial year. [Rule 4(6)]
     Contribution of any amount directly or indirectly to any political party under section
    182 of the Act [Rule 4(7)].

    Activities specified under Schedule VII


    Activities which may be included by companies in their CSR Policies (i.e., Activities as
    specified under Schedule VII) are as follows:
    1. Eradicating hunger, poverty and malnutrition, promoting health care including
    preventive health care and sanitation including contribution to the Swachh Bharat
    Kosh set-up by the Central Government for the promotion of 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, 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;
    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, Central Armed Police Forces (CAPF) and Central Para Military Forces
    (CPMF) veterans, and their dependents including widows;
    7. training to promote rural sports, nationally recognized sports, Paralympic sports
    and Olympic sports;
    8. contribution to the Prime Minister’s National Relief Fund or Prime Minister’s
    Citizen Assistance and Relief in Emergency situations Fund (PM CARES
    FUND) any other fund set up by the Central Government for socio-economic
    development and relief and welfare of the Scheduled Castes, Tribes, other
    backward classes, minorities and women;
    9. (a) Contribution to incubators or research development projects in the field of
    science, technology, engineering and medicine, funded by Central Government
    or State Government or any agency or Public Sector Undertaking of Central
    Government or State Government, and
    10. (b) contributions to public funded Universities; Indian Institute of Technology
    (IITs); National Laboratories and Autonomous Bodies established under
    Department of Atomic Energy (DAE); Department of Biotechnology (DBT);
    Department of Science and Technology (DST); Department of
    Pharmaceuticals; Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha
    and Homoeopathy.

    11. rural development projects;


    12. Slum area development. [For the purposes of this item, the term ‘slum area’ shall
    mean any area declared as such by the Central Government or any State
    Government or any other competent authority under any law for the time being in
    force.
    13. Disaster management, including relief, rehabilitation and reconstruction activities.

    Penal Provisions
    The Companies Act requires that:
    The Board’s report shall disclose the composition of the Corporate Social Responsibility
    Committee as per subsection (3) of section 134;

    If the company fails to spend such amount (i.e., at least two percent of the average net
    profit), the Board shall disclose and specify the reasons for not spending the amount in
    its report as per Clause (o) of sub-section (3) of section 134.

    In case of default Company shall be liable for a fine of rs. 50000/- which may
    extend up to rs. 2500000/-

    And Officers in Default shall be liable for an imprisonment up to 3 years or with


    fine of rs. 50000/- which may extend upto rs. 500000/-

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