CORPORATESOCIALRESPONSIBILITY

COMPANIESACT2013
May 2014
S G P M & Associ at es
Char t er ed Account ant s
Index
Applicability Pg.03
CSR Committee Pg.05
CSR Expenditure Pg.07
CSR Activities Pg.08
Responsibility of Board Pg.10
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Applicability
Section and Rule
Section 135 of the Companies Act 2013 read with the Rules The Companies
(Corporate Social Responsibility Policy) Rules 2014 (herein after CSR Reg).
In Force
CSR came into force on 1
st
April 2014.
Applicable on
Every company having net worth of rupees five hundred crore or more, or,
Every company having turnover of rupees one thousand crore or more, or,
Every company having a net profit of rupees five crore or more during any
financial year,
And (in addition to the company covered under any of the above conditions)
CSR Regwould also be applicable on holding and subsidiary companies of the
company covered under above conditions.
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Applicability
Meaning of company
Company incorporated in India.
Foreign company having its branch office or project office in India.
Exit
Not applicable on the company which has not qualified the applicability threshold
for three consecutive financial year.
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CSR Committee
CSR Committee
If CSR Regare applicable, Company is required to have CSR Committee;
Composition in case of Indian Company
Minimum 3 directors, and,
At least 1 of the director should be independent director.
An unlisted public / private company which is not required to appoint
independent director shall have its CSR Committee without independent
director.
Composition in case of Foreign Company
Minimum 2 persons.
At least one of the person should be a person resident in India authorised
to accept on behalf of the company service of process and any notices or
other documents required to be served on the company, and,
Other persons can be nominated by the company
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CSR Committee
Responsibilities
Formulate and recommend to the Board, a CSR Policy which shall indicate the
activities to be undertaken by the company as specified in Schedule VII.
Recommend the amount of expenditure to be incurred on the CSR activities;
and
Monitor the CSR Policy of the company from time to time.
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CSR Expenditure
Expenditure
CSR spend in every financial year should be at least 2% of the average net profit of
the company made during the three immediately preceding financial years.
Meaning of Net Profit
Net profit as per financial statement (computed in accordance with the
provisions of Section 198), and shall not include;
Any profit arising from any overseas branch or braches of the company,
whether operated as a separate company or otherwise; and
Any dividend received from other company in India, which are covered
under and complying with the CSR Reg.
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CSR Activities
Schedule VII
Activities relating to:
(i) eradicating extreme hunger and poverty;
(ii) promotion of education;
(iii) promoting gender equality and empowering women;
(iv) reducing child mortality and improving maternal health;
(v) combating human immunodeficiency virus, acquired immune deficiency
syndrome, malaria and other diseases;
(vi) ensuring environmental sustainability;
(vii) employment enhancing vocational skills;
(viii) social business projects;
(ix) 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
(x) such other matters as may be prescribed.
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CSR Activities
Exclusions
Activities undertaken by the Company in pursuance of its normal course of
business.
Projects or programs or activities undertaken outside India.
Projects or programs or activities that benefit only the employees of the
Company and their families.
Contribution of any amount directly or indirectly to any political party under
section 182 of the Act.
Other key points
Implementation cost (through employees or external qualified agencies) shall
not exceed 5% of total CSR expenditure of the company in one financial year.
The company shall give preference to the local area and areas around it where
it operates, for spending the amount earmarked for CSR activities.
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Responsibilities of Board
After taking into account the recommendations made by the CSR Committee,
approve the CSR Policy for the company and disclose contents of such Policy in its
report and also place it on the company's website
Ensure that the activities as are included in CSR Policy of the company are
undertaken by the company.
If the company fails to spend such amount, the Board shall, in its report must
specify the reasons for not spending the amount.
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Thank You
S G P M & Associ at es
Char t er ed Account ant s
707, Pearl Best Heights II,
Netaji Subhash Place, Pitam Pura,
Delhi 110034
(L) 011-47094934 (E) ca.sgpm@gmail.com
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