Corporate Social Responsibility
About
- Corporate Social Responsibility (CSR) is a management concept whereby companies integrate social and environmental concerns in their business operations.
- In 2014, India became the first country in the world to legally mandate CSR for certain companies under the Companies Act 2013, which compels them to engage in activities that contribute to the social, environmental, and economic development of the country.
Criteria
- The provisions of CSR applies to every company fulfilling any of the following conditions in the preceding financial year:
- Net worth of more than Rs.500 crore
- Turnover of more than Rs.1000 crore
- Net profit of more than Rs.5 crore.
- The Board of Directors of every company for which the CSR provisions apply must ensure that the company spends in every financial year at least 2% of their average net profits made during the past three financial years on permitted CSR activities such as health, sanitation, education, skill development, disaster management, restoration of environment, sustainable development goals etc.
Activities not eligible for CSR activity
- Activities are undertaken in pursuance of the normal course of business of the company;
- Expenditures that benefit the company directly or its employees;
- Contribution of any amount directly or indirectly to any political party;
- Activities are undertaken outside India, except for training of Indian sports personnel representing any State or Union Territory at national level or India at international level;
- Contribution of any amount, directly or indirectly, to any political party;
- Sponsorship activities for deriving marketing benefits for products/services;
- Activities for fulfilling statutory obligations under any law in force in India.