DEFINITION

 

The term Corporate Social Responsibility or CSR has been defined as under:

• Projects or programs with reference to activities that are specified in the Schedule; or
• Projects or programs related to activities undertaken by the Board in pursuance of recommendations of the CSR Committee according to the declared CSR policy subject to the condition that such policy covers subjects explained in the Schedule.

APPLICABILTY

 

The Companies Act, 2013 has formulated Section 135, Companies (Corporate Social Responsibility) Rules, 2014 and Schedule VII which prescribes mandatory provisions for Companies to fulfill their CSR.

 

Corporate Social Responsibility is required for all companies viz. private limited company, limited company.

 

The following companies are necessary to constitute a CSR committee:

Companies with a net worth of Rs. 500 crores or greater, or

Companies with a turnover of Rs. 1000 crores or greater, or

Companies with a net profit of Rs. 5 crores or greater.

 

If any of the above financial strength criteria are met, the Corporate Social Responsibility (CSR) provisions and related rules will be applicable to the company. These companies are required to form a CSR committee consisting of its directors. This committee oversees the entire CSR activities of the Company. As Per Companies Act-2013, CSR committee has to spend 2% of the average net profit over the last three financial years on CSR activities.

ACTIVITIES PERMITTED UNDER CORPORATE SOCIAL RESPONSIBILITY (CSR)

The following activities can be performed by a company to accomplish its CSR obligations:

• Eradicating extreme hunger and poverty
• Promotion of education
• Promoting gender equality and empowering women
• Reducing child mortality
• Improving maternal health
• Combating human immunodeficiency virus, acquired, immune deficiency syndrome, malaria and other diseases
• Ensuring environmental sustainability,
• Employment enhancing vocational skills, social business projects
• Contribution to the Prime Minister’s National Relief 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 Castes, the Scheduled Tribes, other backward classes, minorities and women and such other matters as may be prescribed.