CSR- corporate social responsobility in 2021

CORPORATE SOCIAL RESPONSIBILITY

BACKGROUND:

A corporate entity uses the resources of society, it operates its business activity in a society, therefore it is responsibility of a corporate to take care of society in which it operates.

Therefore, Corporate social responsibility (CSR) is an obligation of a corporate entity to give back to the society a part of its earning in the form of various resources and services.

HISTORY OF CSR IMPLEMENTATION IN INDIA:

APPLICABILITY OF SECTION 135 COMPANIES ACT, 2013

Every company having:

• Net worth of Rs. 500 crore or more, or
• Turnover of Rs. 1000 crore or more, or

Net profit of Rs. 5 crore or more A company which met one or more of these benchmarks would have to contribute a minimum of two percent of the net profit earned in the three preceding financial years to activities deemed “socially important” under the Companies Act and shall constitute a Corporate Social  Responsibility Committee of the Board.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

Corporate Social Responsibility Committee shall consist:

• 3 or more Directors, out of which at least one director shall be an independent director.
• 2 or more directors where a company is not required to appoint an Independent Director.

ONGOING PROJECT

Ongoing Project means a multi-year project undertaken by a Company in fulfilment of its CSR obligation having timelines

• not exceeding three years excluding the financial year in which it was commenced,
• and shall include such project that was initially not approved as a multi-year project but whose duration has been extended beyond one year by the board based on reasonable justification.

AMOUNT UNSPENT IN ONGOING PROJECT

Any amount remaining unspent shall be transferred by the company

• within a period of thirty days from the end of the financial year
• to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account,
• such amount shall be spent by the company in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer
• failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year.

PENAL PROVISIONS

If a company is in default in complying with the provisions of sub-section (5) or sub-section (6) the company shall be liable

• to a penalty of twice the amount requiredto be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and
• every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less.

TOTAL CSR AMOUNT SPENT BY INDIAN COMPANIES FOR THE FINANCIAL YEAR   2019-20 IS AS FOLLOW:

TOP 10 STATES CONTRIBUTORS:

TOP 10 CSR SPENDERS AS OF JUNE 1, 2021: