Csr : A Corporate Social Responsibility

1807 Words Jan 15th, 2015 8 Pages
CSR Provision- Section 135.

According to it, “Every company with a net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more, or net profit of Rs. 5 crore or more in a financial year will have to form a corporate social responsibility (CSR) Committee of the Board consisting of three or more directors, out of which at least one director must be an independent director
Also, as per the Act appointed Board to ensure spending in every financial year of at least two percent of the company’s net profits during three immediate financial years in pursuit of their CSR Policy.
But in the case if the company has inadequate profits or it is not possible for the company to at least spend prescribed amount on CSR the Board of Directors are to give viable justification in their annual report, failing to which will be non-compliance.

Interestingly there are no penalties as per Companies Act, 2013 for failing to spend on CSR but the Company will be penalized on failing to report their inability to spend on CSR. Hence the Rule is Either Do It or Speak It.
Schedule VII covers a wide range of activities which can be undertaken by the Companies as a part of their CSR initiatives.

CSR Objectives after its inclusion in the Companies Act

The prime objective of the government in enacting CSR activities in legislation was to guide the Indian corporate sector to synergize the Corporate, Governments, Civil Society Organizations, Academic Institutions and Social…
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