(Companies Act 2013) By Sibani Swain Economic Advisor Ministry Of Corporate Affairs What is CSR CSR in Companies Act-2013 CSR Committee Mandatory Disclosure(Boards Report) Schedule VII Educating Voters CSR Rules Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” Lord Holme and Richard Watts Corporate social responsibility encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm. Harvard University Companies Mandated to constitute a CSR Committee Networth of Rs 500 Crore or more Turnover of Rs 1000 Crore or more Net profit of Rs 5 Crore or more CSR Committee to have Three or more directors At least one is to be an independent director Board’s Report shall disclose the constitution of CSR Committee CSR Committee will Formulate CSR policy and recommend to board indicating the activities to be undertaken as specified in schedule vii Recommend the amount of expenditure to be incurred Monitor CSR Policy from time to time Board of Directors will Approve CSR Policy Ensure implementation of CSR policy Disclose the contents of CSR policy in the Board report Place the same on company’s website, if any Ensure CSR spending amounting to at least 2% of the average net profit of the preceding three financial years Board’s Report shall specify the reasons for not spending the specified amount There is no penalty for failure to spend 2% of net profit on CSR Eradicating extreme hunger & poverty Promotion of education Promoting gender equality and empowering women Reducing child mortality and improving maternal health Combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases Ensuring environment sustainability Employment enhancing vocational skills Social business projects Contributions to Prime Minister 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 Caste and Schedule Tribe such other matters as may be prescribed Thrust is on Women’s participation in Electoral Process Activities included in schedule VII of the Act covers ‘Gender equality and Women’s empowerment’ Corporates are free to formulate CSR policy including projects/programme to be undertaken, amount to be spent, community/geographical area to be covered etc. The Act provides that the company shall give preference to the local areas Specifies operational provisions of the CSR policy Hosted on MCA’s Website on 9th September,2013 for inviting Public Comments Includes provisions for implementing agencies, pooling of resources by two or more corporates, CSR coverage etc. as well as format for reporting Feedback Received on Number of issues including Activities covered under schedule VII Tax exemption on CSR spending Composition of CSR Committee CSR rules are being finalized after taking into account stakeholders’ comments.