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Corporate Social Responsibility (CSR), a term widely use for defining the responsibilities of corporate world towards the society & environment.
Although the term is not new in this Corporate world but its scope & meaning has undergone major changes from treating it as a mere charity in comparison with the responsibilities/duties of the Corporate towards the outer world.
There are many big entities who have been actively engaged in the CSR activities but unfortunately the number is relatively less.
In order to encourage more entities to participate in the process of development of the society via- CSR, the Government of India has actually implemented the concept of CSR in the new Companies Act 2013.
On 27th February, 2014, the Government of India has notified the rules for CSR spending u/s 135 of the New Companies Act 2013 along with Companies (Corporate Social Responsibility Policy) Rules, 2014 effective from 1st April 2014.
Turning the CSR from voluntary activities to the mandated responsibilities, also governed by the bundle of regulations as follows:
Company (includes foreign company with branches or project in India) having:
During any financial year, are covered by this provision
The Company should constitute a Corporate Social Responsibility Committee as follows:
The CSR Rules provides the manner in which CSR committee shall formulate, monitor the policy and manner of understanding for CSR activities.
Under the rules, the Government has also fixed a threshold limit of 2% of the “Average’ Net Profits of the block of previous three years on CSR activities and if Company fails to spend such amount, disclosures are to be made for the same.
But an exemption has been given to the Companies that do not satisfy the above threshold for three consecutive years.
The below activities doesn’t include under the CSR activities of the Company.
The above CSR activities shall be undertaken by the Company, as per its stated CSR policy, in consonance with the new or ongoing projects excluding activities undertaken in pursuance of its normal course of business.
The Board of Directors may decide to undertake its CSR activities approved by the CSR Committee, through a registered trust or a registered society.
This means all the Companies falling in the aforesaid criteria needs to ensure CSR compliance but it is debatable to say that the same is for welfare of the society or the companies are doing it just to avoid penalties.
CSR stands to support the Company’s Vision as well as directions to what Organization stands for and will sustain its clients. An ISO 26000 is the accepted worldwide standard for Corporate Social Responsibility (CSR).
CSR term has been revaluated with an aim to embrace responsibility for the Company’s actions and encourage a positive impact through its activities on the environment, consumers, conscience, corporate citizenship, social performance, employees, communities and all stakeholders.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: singh@carajput.com or call at 9555555480
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