CORPORATE SOCIAL RESPONSIBILITY APPLICABILITY

Corporate social duty is an enterprise model that is based on self-regulation and helps the companies to be socially responsible towards itself or its stakeholders. It is very vital to undertake the CSR things to do for the sustainable development of the society and all the stakeholders.

Corporate Social Responsibility is also known as company citizenship. By working towards CSR policy, the companies will be aware regarding the kind of have an effect on they are contributing on all the components of the society, including, social, monetary and environmental and helps the agencies to make a contribution positively in the direction of the surroundings.

To take energetic measures in enticing CSR means that along with the regular commercial enterprise objective an organization is additionally working in such approaches that its giving sure advantage to the environment and enhancing the degree of society also instead of contributing pessimistically.

Applicability

Section 135 (1) of the Companies Act, 2013 deals with the concept of CSR and provides the threshold to constitute the CSR committee.

The provisions of CSR under Companies Act 2013 are applicable to all the companies which are registered under the Companies Act 2013, having in immediately preceding financial year:

The net worth of Rs. five hundred (500) crore or higher; or

The turnover of Rs. one thousand (1000) crore or higher; or

A net profit of Rs. five hundred (500) crore or higher.

Further, the section has clearly stated that CSR is applicable to “all” companies which means that public, private, holding, subsidiary and foreign companies as defined under the act 2013. The criteria of CSR apply to the foreign companies having their branch office in india to the level of their business operations in the country.

CSR committee

Company to which CSR is compulsory shall represent a CSR Committee to elevate out and maintain an eye on CSR activities. As per the provisions of the Companies Act 2013 CSR Committee shall consist of at least three administrators and on pinnacle of that as a minimum one director shall be an independent director. Description on the groundwork of kinds of companies:

A)     Unlisted public company that are covered under CSR provisions they need not have independent director on the CSR committee.

B)      Private limited company that are covered under CSR provisions they need not have independent director on the CSR Committee and can also constitute CSR committee with only 2 directors.

C)      Foreign company that are covered under CSR provisions, should have minimum 2 person.

CSR committee meetings

With regard to secretarial standard 1 issued by ICSI “CSR committee meetings shall be held as per the discretion of the board or any law/authority for the time being in force and as when required to fulfil the minimum number i.e. 4 times each per quarter.”

Quorum for CSR committee meetings

Again with regard to secretarial standard 1 issued by ICSI, all the members of CSR committee constituted by the board are necessary to form the quorum for such meetings unless otherwise predetermined in the act or any other law or the articles or by the board of the company.

Responsibility of CSR committee

To actively recommend the board about CSR Policies to be taken up by the company and also recognize and recommend the expenditure to be incurred in such activities and also to monitor the policy actively and its implementation.

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