Corporate social responsibility 2013

Prepared and Presented by
Dipendra Prasad Poudel
Article Assistant ( Internal
Audit)
N.Kochhar and Co
Corporate social
responsibility, Methods of CSR, and its
provision in Indian Companies Act 2013

Disclaimer
This presentation has been prepared by CA Final
Student on the basis of Companies Act 2013,
Rules, Notifications and Personal Observations.
The users and readers are advised to cross check
with the original Act and rules before acting upon
this presentation.
No stone has been left upturned to make this
presentation up-to-date and True.
You are free to retrieve and share in any forms and
devices. No copyright has been reserved.
Presented By: Dipendra Prasad Poudel

Contents
 Definition of CSR
 Common methods used for CSR
 Applicability of CSR as per Companies Act 2013
 Various Provisions and responsibilities of
Company
 Where CSR fund can be spent?

Definition of CSR
 It is also called Corporate conscience, Corporate
citizenship, Social Performance or sustainable
responsible business.
 It is a form of corporate social regulation
integrated into business model
 It is continuing commitment by business to
behave ethically and contribute to economic
development while improving quality of life.
 CSR functions as a built-in, self regulating
mechanism whereby a business monitors and
ensures its active compliance with spirit of
law, ethical standards and international
norms.

Common Approach to CSR
1.Corporate
Philanthropy
2.Incorporate
Strategy
3.Creating
Shared Value
(CSV)

Various Methods
 Corporate Philanthropy: It is most common
approach. This method relate with desire to
promote the welfare of others, especially through
donation of money.
 Incorporate method: Another approach is to
incorporate CSR strategy to business strategy.
Example: Fair Trade Tea and Coffee
 Creating Shared Value (CSV) : This approach is
to garnering increasing corporate responsibility
interest. The shared value model is based on idea
that corporate success and social responsibility
are inter-dependent.Presented By: Dipendra Prasad Poudel

Applicability of CSR.
Companies Act 2013(Section 135)
2. Turnover 1000
crore or more
1. Net worth 500
crore or more
3. Net profit 5 crore
or more
CSR is applicable if any of the below mentioned criteria is
fulfilled.
Net worth means the aggregate value of paid up share capital and all reserves
created out of profits and securities premium account, after deducting the
aggregate value of accumulated losses , deferred expenditure and
miscellaneous expenditure not written off, as per audited balance sheet but
doesn’t include reserves created out of revaluation of assets, write-back of
depreciation and amalgamation. Section 2(57)
Turnover means the aggregate value of the realisation amount made from
sale, supply or distribution of goods or on account of services rendered, or
both, by the company during financial year. Section 2(91)

Formation/Responsibilities of
CSR Committee
Section 135(1) of companies act 2013, mentions the details about formation of
CSR Committee
1. The committee should consist of Three or more directors, out of which at
least one director should be Independent director.
2. An unlisted public company or a private company shall have its CSR
committee without Independent director. (company CSR policy rules 2014)
3. A private company only having two directors in it board shall constitute CSR
committee with both the directors. (company CSR policy rules 2014)
4. With respect of foreign companies, CSR committee shall compromise of at
least of two persons of which one person should be specified under clause d
of sub-section 1 of section 380 of the act and one should be nominated by
foreign company. (company CSR policy rules 2014)

Section 135(5) The CSR board shall ensure that the company spends, in
every financial year at least two percent of the average net profits of the
company made during the three immediately preceding financial years, in
pursuance to CSR policy.
If the company fails to spend such amount board shall in its report
specify the reasons for not spending the amount.
Section 135(3) CSR committee shall-
1. Formulate and recommend to the board, a corporate social responsibility
policy
2. Recommend the amount of expenditure to be incurred on the activities.
3. Monitor CSR policy from time to time.

Where CSR should be spent?
Schedule VII of Companies Act 2013 ( Revised)
I. Eradicating hunger, poverty and
malnutrition, promoting preventive health care
and sanitation and making available of clean
drinking water.
II. Promoting education, including special
education and employment enhancing
vocational skills specially among
children, women, elderly and differently abled
and livelihood enhancement programs.
III. Promoting gender equity, empowering
women, setting up homes and hostels for
women and orphans; setting up old age
home, day care centers and such other facilities
for senior citizens and measures for reducingPresented By: Dipendra Prasad Poudel

continued
IV. Ensuring environmental sustainability, ecological
balance, protection of flora and faunna, animal
welfare, agro forestry, conservation of natural
resources and maintaining quality of
soil, air, water and land.
V. Protection of national heritage art and
culture, including restoration of building and sites
of historical importance's and work of art; setting
of public libraries and development of traditional
arts and handicrafts.
VI. Measures for the benefit of armed forces
veterans, wars widow, and their dependents.
VII. Training to promote rural sports, nationally
recognized sports, Paralympic and Olympic
sports.

continued
VIII. Contribution to prime minister national relief fund
or any other fund set up by central government
for socio-economic development and relief and
welfare of scheduled casts, the scheduled
tribes, other backward classes and minorities
committee.
IX. Contributions or funds provided to technology
incubators located within academic institutions
which are approved by central government.
X. Rural Development projects.

Thank for reading the presentation.
For any suggestions, feedbacks and enquiries
regarding this presentation please feel free to write
me on below mentioned email address
mailfordipendra@gmail.com
infodipendra.blogspot.in

Corporate social responsibility 2013

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