(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.