Page 89 - DTPA Journal December 21

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CORPORATE SOCIAL RESPONSIBILITY :

A REVIEW IN LIGHT OF RECENT AMENDMENTS

A. K. LABH & Co.
Company Secretaries

The Concept of Corporate Social Responsibility c. Activities supported by the Companies on
(CSR) was introduced vide Section 135 of the sponsorship basis for deriving marketing
Companies Act, 2013 (“the Act”) and it became benefits for its products or services;
effective from 01.04.2014. India was the first d. Activities undertaken in normal course of
Country in the world to introduce this concept and business;
being a new concept, it went through lot of changes e. Activities carried to fulfil any other statutory
and clarifications. liability;
Every Company having net worth of rupees five f. Activities undertaken outside India except for
hundred crore or more, or turnover of rupees one training of Indian sports personnel
thousand crore or more or a net profit of rupees five representing State or UT at National or
crore or more in its immediate preceding financial International level.
year is required to spend at least two per cent of the CSR activities may be carried out by the Company
average net profit of its last three preceding : (a) directly by itself or through any registered
financial years towards CSR. A Company not Public Trust / Society / Section 8 Company (duly
completed three years of its incorporation and registered under Section 12A & 80G of the
falling under CSR criteria, will also be required to Income Tax Act, 1961) either promoted by the
contribute two per cent of the average net profit of Company or any independent entity having track
its preceding financial years since its inception. record of three years; or (b) through any registered
Further, to a Company if CSR becomes applicable Trust / Society / Section 8 Company established
once, the Company will have to continue with it for by the Central Government or State Government;
next three financial years. However, the Company or (c) any entity established under an act of
will no longer be required to comply with the Parliament or a State legislature. However, on or
provisions, if the stipulated criterias are not after 01.04.2021 new CSR activities eligible
attracted for next three financial years. under Section 135 of the Act read with rules
Furthermore, it is applicable to all Companies, related thereto can be carried out by these entities
including Foreign Companies having offices in only if they are registered with MCA and is having
India and registered with Ministry of Corporate a Unique CSR Registration Number. Further, a
Affairs (MCA) and fulfilling the desired criteria. Company may also collaborate with other
Amount spent by the Company towards any of the companies for undertaking projects or
activities as illustrated in Schedule VII to the Act programmes or CSR activities in such a manner
will be treated as CSR activities. However, that the CSR committees of respective companies
following activities will not be covered under CSR are in a position to report separately on such
: projects or programmes in accordance with these
a. Contribution to political parties; rules.
b. CSR only for employees of the Company;

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