Corporate Social Responsibility (CSR)
CSR (Corporate Social Responsibility)
Corporates have excelled in the last two decades in generating much wealth and prosperity. But this wealth remained held in the hands of few. A major step was taken by introducing the concept of Corporate Social Responsibility in the Companies Act, 2013. Section 135 of the Companies Act, 2013 aroused the conscience of the Corporates, especially the large ones, for involving in inclusive growth of the society.
Applicability of CSR
Every Company having:
- Net profit of Rs. 5 Crore during any financial year
- Net worth of Rs. 500 Crore or more; or
- Turnover of Rs. 1000 Crore or more; or
shall be required to constitute a CSR Committee of the Board consisting of three (3) or more directors, out of which at least one (1) director shall be an independent director, if any.
At least 2% of average net profit of 3 immediately preceding financial years is required to be spent on CSR activities every year.
Applicability on Foreign Companies
- A foreign company defined under clause (42) of section 2 of the Act having its branch office or project office in India which fulfills the criteria specified in sub-section (l) of section 135 of the Act shall comply with the provisions of section 135 of the Act and the rules.
- The net worth, turnover or net profit of a foreign company under the Act shall be computed in accordance with balance sheet and profit and loss account of such company prepared in accordance with the provisions of clause (a) of sub-section (1) of section 381 and section 198 of the Act.
J&P’s Professional Services in respect to CSR include:
- Providing assistance in deciding the activity for spending CSR amount;
- Providing assistance in calculation of amount to be spent;
- Providing assistance in formulating CSR policy;
- Providing assistance regarding all compliances for formation of CSR committee and holding its meetings.