Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) in India is governed by Section 135 of the Companies Act, 2013, and\ the Companies (Corporate Social Responsibility Policy) Rules, 2014. Here’s a brief note on CSR compliances in India:

CSR Applicability:

CSR provisions apply to companies with a net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more, or net profit of Rs. 5 crore or more in the preceding financial year ¹.

Key CSR Compliances:

Companies meeting the applicability criteria must form a CSR Committee¹.

The CSR Committee is responsible for formulating and recommending a CSR Policy to the Board¹.

Companies are required to spend at least 2% of their average net profit from the preceding three financial years on CSR activities².

CSR activities must be undertaken as per the approved CSR Policy and can include education, health, poverty alleviation, environmental sustainability, gender equality, and more¹.

Companies must report CSR activities and expenditure in their annual report and on their website¹.

Entities implementing CSR activities on behalf of companies must be registered with the Central Government¹.

The CSR Committee must monitor the implementation of CSR projects and ensure compliance with the CSR Policy¹.

If a company fails to spend the required amount, it must explain the reasons in its annual report and transfer the unspent amount to a fund specified in Schedule VII of the Act¹.

Companies must stay updated with amendments to CSR rules and regulations, such as the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021¹.

CSR compliance ensures that businesses contribute to the social and environmental welfare of the community. It reflects a company’s commitment to its social responsibility beyond its economic and legalobligations. For a detailed understanding of CSR compliance, it is advisable to refer to the Companies Act,
2013, and the CSR Rules. If you need more detailed information or assistance, please let me know!