Q.Discuss the guidelines enumerated by the Companies Act 2013 for Corporate Social Responsibility.

Key guidelines: CSR provisions apply to companies with an annual turnover of ₹1,000 crore or more, or net worth of ₹500 crore or more, or net profit of ₹5 crore or more; from FY 2014-15, they must set up a CSR committee of the board (with at least one independent director); companies are encouraged to spend at least 2% of average net profit of the previous three years; qualifying activities are listed under Schedule VII; only activities undertaken in India count; and activities exclusively for a company's own employees and their families do not qualify. …

Background

• In India, CSR is governed by Clause 135 of the Companies Act, 2013, passed by both Houses of Parliament and assented to by the President on 23 August 2013. It gave CSR statutory form for larger companies.

The guidelines under the Act

• Applicability (who must comply): The provisions apply to companies with an annual turnover of ₹1,000 crore or more, or a net worth of ₹500 crore or more, or a net profit of ₹5 crore or more.
• Effective date: The rules apply from the financial year 2014-15 onwards.
• CSR committee: Qualifying companies must set up a CSR committee of board members, including at least one independent director, to oversee CSR activity.
• Spending norm: Companies are encouraged to spend at least 2% of their average net profit of the previous three years on CSR activities.
• Qualifying activities: The indicative activities that qualify as CSR are specified under Schedule VII of the Act.
• Geographic condition: Only CSR activities undertaken in India are counted. …