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C ORPORATE S OCIAL R ESPONSIBILITY

C ORPORATE S OCIAL R ESPONSIBILITY. CS PRAJOT TUNGARE Master Class on Company Law Pune Chapter of WIRC of ICSI Saturday, 30 th August 2014. MEANING.

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C ORPORATE S OCIAL R ESPONSIBILITY

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  1. CORPORATE SOCIAL RESPONSIBILITY CS PRAJOT TUNGARE Master Class on Company Law Pune Chapter of WIRC of ICSI Saturday, 30th August 2014

  2. MEANING Corporate Social Responsibility [CSR] is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of workforce and their families as well as the local community and society as well. - World Business Council for Sustainable Development CS PRAJOT TUNGARE

  3. PURPOSE • Objectives of Corporate Governance • Corporate Responsibility towards Stakeholders • A. Economic • B. Legal • C. Ethical • D. Philanthropic • Sustainable Development • Promote Welfare Initiatives • Not A Charity ……… A Responsibility CS PRAJOT TUNGARE

  4. APPLICABILITY • Section 135 of the Companies Act, 2013: • Every Company having:- • Net Worth of Rs.500 crore or more; Or • Turnover of Rs.1,000 crore or more; Or • Net Profit of Rs.5 crore or more; during any financial year, shall, constitute a CSR Committee of the Board. • Company includes its holding or subsidiary and a Foreign Company having its branch office or project office in India. • Company which ceases to meet the criteria under section 135(1) for three (3) consecutive financial years, shall not constitute a CSR Committee and need not comply with the provisions of section 135, until it again meets the said criteria. CS PRAJOT TUNGARE

  5. CSR COMMITTEE • Constitution of CSR Committee of the Board :- • Three (3) or more Directors, with one (1) Independent Director [ID]; • Company not required to appoint an ID, need not have an ID in the CSR Committee; • Private Company having only two (2) Directors on Board shall have CSR Committee with two (2) such Directors. • Foreign Company shall constitute CSR Committee with two (2) persons comprising the following • A. One (1) person specified in Section 380(1)(d); and • B. Any other person nominated by the said Foreign Company. CS PRAJOT TUNGARE

  6. FUNCTIONS OF CSR COMMITTEE • Formulate CSR Policy • Recommend the CSR Policy to the Board • Recommend amount of expenditure to be incurred on CSR Activities • Monitor CSR Policy CS PRAJOT TUNGARE

  7. FUNCTIONS OF BOARD • Board to Approve the CSR Policy • Disclose content of CSR Policy in Board Report • Ensure that the CSR Activities are Undertaken • Ensure spending on CSR Activities • Report under section 134(3)(o) the reasons for not spending, if any CS PRAJOT TUNGARE

  8. CSR POLICY • CSR Projects / CSR Programs as per Schedule VII • Specify modalities of Execution of the CSR Projects / CSR Programs • Provide Implementation Schedule • Define Monitoring Process CS PRAJOT TUNGARE

  9. CSR ACTIVITIES • As per CSR Policy • CSR Projects or CSR Programs • CSR Activities to be undertaken exclusively in India • Activities of company under “normal course of business” are excluded • Activities benefiting only employees are not eligible • Activities implemented : • either personally; or • jointly with other companies; or • thru implementing agencies [trust, society, company] CS PRAJOT TUNGARE

  10. CSR EXPENDITURE • 2% of average net profits of company for immediately three (3) preceding financial years • Contribution to Corpus • Building CSR capacities of Employees / Agencies – not to exceed 5% of total CSR Expenditure in one (1) financial year • Salaries to CSR Staff / Volunteers • Expenditure by Foreign Holding Company • Contribution to Political Parties is not a CSR CS PRAJOT TUNGARE

  11. CSR REPORTING • Board of Directors Report shall include Annual Report on CSR • Foreign Company shall include CSR Report as annexure to Balance Sheet filed under section 381(1)(a) • Failure to spend CSR Expenditure shall be reported by Board with reasons CS PRAJOT TUNGARE

  12. ANNUAL REPORT ON CSR ACTIVITIES • Annual Report to be included in the Board Report & include: • Outline of CSR Policy • Overview of CSR Projects and Programs • Composition of CSR Committee • Average Net Profit for preceding three (3) financial years • Prescribed CSR Expenditure • Details of CSR Spent / Unspent • Project; • Sector; • Location; • Budget vis-à-vis Spending; • Implementing Agency. • Responsibility Statement of CSR Committee CS PRAJOT TUNGARE

  13. QUESTIONS

  14. THANK YOU ! CS Prajot Tungare Prajot Tungare & Associates Company Secretaries 529/1, 2nd Floor, Shraddha Chambers, Near Ramakrishna Math, Sinhagad Road, Opp. Dandekar Bridge, Pune – 411 030 Mobile: 94220 80704; Phone: 020-2433 6490/91 Email: prajot@prajottungarecs.com Url: www.prajottungarecs.com

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