Corporate Social Responsibility Department of

Transcript:Corporate Social Responsibility Department of:
Corporate Social Responsibility Department of Public Enterprises BRICS FORUM Chennai 18-19th November, 2016 1 Corporate Social Responsibility (CSR) Legislation For the first time, anywhere in the world, CSR for companies, including CPSEs has been mandated through legislation in India Section 135 of the Companies Act, 2013 contains CSR provisions Schedule VII of the Act enumerates activities that can be undertaken by CPSEs as CSR Section 135, amended Schedule VII of the Act, and the Companies (Corporate Social Responsibility Policy) Rules, 2014 were notified by M/o Ministry of Corporate Affairs on 27th Feb 2014 All came into force from 01.04.2014. This is the first year of implementation of CSR by CPSEs under the Act 2014-15 was the first year of implementation of CSR by Companies under the Act 2 Highlights of Statutory Provisions Under Section 135 of the Act, companies, including CPSEs crossing thresholds, i.e., Net Worth of INR 500 crore or more; OR Turnover of INR 1000 crore or more; OR Net Profit of INR 5 crore or more, are required to discharge the obligations of CSR. At least 2% of the average net profits of the company made during 3 immediately preceding financial years are to be spent on CSR activities every year. ‘Net profit’ for computation of CSR spends is to be computed as per Section 198 of the Act and is ‘Profit Before Tax’ (PBT). Such companies have to constitute a CSR committee of the Board, comprising of three Directors or more with at least one Independent Director. The CSR projects or programs or activities undertaken in India only shall amount to CSR Expenditure, though companies shall give preference to the local area and areas around its operations. 3 Responsibilities of the CSR Committee & Company’s Board Responsibilities of the CSR Committee : To formulate and recommend a CSR policy which shall indicate activities as specified in Schedule VII of the Act. To recommend amount of expenditure to be incurred on CSR activities To monitor the CSR policy of the company from time to time. Responsibilities of the Company’s Board : Approve and disclose CSR Policy in the Annual Report and on the company website Ensure implementation of CSR activities as per the Policy Directors’ Report to specify reasons in case the specified amount is not spent 4 Activities covered in Schedule VII of the Act Eradicating hunger, poverty, malnutrition, promoting healthcare including contributions to “Swach Bharat