Corporate Social Responsibility(CSR) | Section 135 of Companies Act |CSR notes

Every person in the society has some role or more specifically the responsibility towards other persons. Company being a juristic person has also some responsibility which is known as Corporate Social Responsibility(CSR). Here I shall discuss this topic in question and answer format. If you still have any doubt, please ask your query in the comment section.

Q. Which companies fall under Corporate Social Responsibility?

Ans: 

(i) Every company whose net worth is rupees 500 crore or more in a financial year or

(ii) Every company whose turnover is rupees one thousand crore or more in a financial year or

(iii) Every company whose net profit of rupees five crore or more during any financial year

Shall constitute a Corporate Social Responsibility committee of the Board consisting of three or more Directors. Among the Directors on of them shall be an independent Director.

Q. What are the functions of the Corporate Social Responsibility committee?

Ans: According to companies amendment Act 2013 the Corporate Social Responsibility(CSR) committee shall have the following functions-

(1) Formulate policy which shall include the activities performed by the companies which are mentioned in the schedule VII.

(2) Recommend to the Board , the amount of fund required for such activities as mentioned in the schedule VII.

(3) The Corporate Social Responsibility(CSR) committee shall monitor the CSR policy of the company from time to time.

Q. What are the functions of the Board in Corporate Social Responsibility?

Ans:  

(i) The primary function of the board in Corporate Social Responsibility(CSR) is to approve the policy as recommended by the Corporate Social Responsibility committee and disclose such policy in company’s official website.

(ii) Another responsibility of the board is to ensure that the policy which is recommended by the Corporate Social Responsibility committee is actually performed by the company.

Q. What are the activities which fall under Corporate Social Responsibility?

Ans: According to schedule VII of Companies Act the following activities may be adopted by a company in its Corporate Social Responsibility.

(1) Eradicating hunger and poverty from the society as far as the company is capable.

(2) Promotion of quality education

(3) Providing of employment oriented vocational training

(4) maintaining environmental sustainability

(5) To contribute to the Prime Minister’s National Relief fund or other governmental relief fund or provide fund for the development of SC, ST and other backward classes in the society.

(6) Promote social business projects

(7) Combating HIV and other severe diseases

(8) Improving the health condition of the new born child and mother to reduce child mortality rate

(9) Such other activity as may be prescribed from time to time