Corporate Social Responsibility Rules under Companies Act 2013
- Many days after enacting the Companies Act 2013, Corporate Social Responsibility (CSR) Rules have been framed by Ministry of Corporate affairs, which will come in to effect from 1st April, 2014.
- The rules provide for the manner in which CSR Committee shall formulate and monitor the CSR Policy.
- Rules shall apply to companies having at least net worth of 500 crore or turnover of 1000 crore or net profit of 5 crore.
- Followings are the highlights of the CSR rules:
- CSR Activities have to be in India Only and shall apply to foreign companies in India too.
- Donations to Political parties and expenditure on it’s won employees shall not be included in CSR.
- Companies must spend 2% of three years average annual net profit towards CSR activities.
- A Company can also carry out it’s CSR activities through a separate company or trust or a registered society.
- CSR activities shall not be clubbed with the routines works or businesses carried out by the company.
- Apart from other activities developmental activities such as health care, environmental protection and conservation, protection of natural heritage and culture, measures for the benefit of armed forces veterans, war widows and their dependents, promoting sports and components of rural development would also be considered as CSR activities.
- Corporate Social Responsibility (CSR)