CS Executive CORPORATE SOCIAL RESPONSIBILITY (SEC – 135)
Corporatesocial responsibility is a regulation which bound companies to take active participation in compliance of law spirit of law ethical standard and international norm. CSR activities help the organization to make a better impact on society,consumers and our stakeholders. It gives the edge to business following CSR over others.
APPLICABILITY OF CSR ON BUSINESS
As per the section 135 of the companies act 2013,
Every company who lie in these conditions has to spend the prescribed amount on CSR activities:-
- Companyhaving a net worth of rupees 500crore or more
- Companyhaving a turnover of rupees1000crore or more
- Companyhaving a net profit of 5crore or above
On compliance of any of the above condition, the company shall make a CSR committee who shall make the policies related to CSR expenditure and shall be disclosed in the board report.
The company will make an expenditure of at least 2% of the average net profit of the company made during the three immediately financial years,in pursuance of corporate social responsibility activities.
BENEFITS OFCORPORATE SOCIAL RESPONSIBILITY
- It will help to retain the employee in the organization
- It will increase our organization good will and corporate image
- Benefit our society for the greater good
- Increase the trust of our stakeholders like investors and financial analyst
- It will increase our sales
CONSTITUTION OF CSR COMMITTEE
- Every committee on which section 135 of companies act 2013 is applicable is required to make a CSR committee
- Committee will consist 3 or more directors
- 1 director should be an independent director out of 3 directors
- Private company and unlisted company who is not required to appoint independent director will not be required to appoint an independent director in CSR committee
- A private company which have 2 directors can constitute CSR committee with only 2director
DISCLOSURE RELATED TO CSR ACTIVITIES
- Briefing about company CSR policy
- The composition of the CSR committee
- Our average profit in the preceding 3year
- Expenditure on CSR
- Areas where money is being spent
- If a companyhas failed to spend the required amount on CSR, we will state the reason for not spending the required amount
- Responsibility statement regardingthat our compliance is duly dealt with
LIST OF CSRACTIVITIES
IN OUR SCHEDULE VII, there are various activities that a company can spend on:-
- Eradication poverty, hunger,and malnutrition
- Promote education by providing enhancing vocation skills especially children and women
- Empowering women and creating equality among genders
- Protection of our culture and heritage
- Rural development projects
- Contributing to PM relief fund
- Development of our slum area
- Providing a benefit to our armed forces and veteran
ACTIVITIES NOT AMOUNTING TO CSR
- Projects done outside India
- Programs done only for the benefit of the company’s employee and worker
- Contribution done to a political party
- Activities done in the normal course of business
PENALTY
If a company does not disclose the reason for not spending amount, the company shall be punishable with minimum 50000 rupee and maximum 25 lakhs rupee.
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