Corporate Social Responsibility comprises of three words:
It means responsibilities of corporates to society at large.
What is Corporate Social Responsibility?
Corporate Social Responsibility meansgoverning the affairs of an organization in conformity with the good governance, transparency, business ethics and accountable to both shareholders and the society at large. In other words running the affairs of an organization in such a way that is beneficial to society also.
Why corporate are responsible to society?
Corporates are responsible to society because they uses the resources of a society like material, man etc. Without society cooperation the corporate can’t run in an effective way.
What are the benefits of CSR activities?
The benefits or advantages of CSR activities are as follows:
- Increase the business revenue by enhancing market access
- Increase in capital access
- Increase in productivity
- Reduce in cost
- Retaining and attracting good quality human resource capital
- Boosting the brand image
Corporate Social Responsibility in Companies Act, 2013?
According to Section 135 of Companies Act, 2013 :
(1) Every company whose net worth is rupees five hundred crore or more, or
turnover of Rs. one thousand crore or more or a net profit of Rs.five crore or more during any financial year shall made or formed a Corporate Social Responsibility Committee of the Board consisting of three or more directors. AT least one director should be an independent director in committee.
(2) The Report of the board under sub-section (3) of section 134 shall disclose the formation of the CSR Committee.
(3) The Corporate Social Responsibility Committee shall,—
(a) formulate, made and recommend or tell to the BOD, a CSR
Policy which shall lay down the activities to be undertaken by the company as
specified in Schedule VII;
(b) recommend the total amount of expenditure to be incurred on the activities referred to in clause (a); and
(c) review the CSR Policy of the company from time to time.
(4) The Board of every company referred to in sub-section (1) shall,—
(a) after taking into account the recommendations made by the Corporate Social Responsibility Committee, confirm the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company’s website in such manner as may be prescribed; and
(b) ensure or confirm that the activities as are included in Corporate Social ResponsibilityPolicy of the company are undertaken or perform by the company.
(5) The Board of every company referred to in sub-section (1), shall ensure that the
company should spends, in every financial year, at least 2% of the averageof net profits of the company earn during the 3 immediately preceding financial years
Preference should be given to the local area and areas around company
where it operates, for spending the amount reserve for Corporate Social Responsibility activities:
Provided further that if the company fails to spend such amount, the BOD shall, in its
Report or documentation made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount.
Explanation.—For the purposes of this section “average net profit” shall be calculated
in accordance with the section 198 provisions.
Companies Role to CSR Policy
Each & every company whether covered under the above limits or not, have to initiate some CSR programme because it will improve the standard of living of our country & it will .
For full notification on CSR policy by Ministry Click on below link or copy paste the below link in your browser.