FAQs on the provisions of Corporate Social Responsibility under Section 135 of the Companies Act 2013 and Rules thereon
The ICAI hosted on its website exposure draft of Frequently Asked Questions(FAQs) on the provisions of Corporate Social Responsibility (CSR) under Section 135 of the Companies Act 2013 and Rules thereon.
The background of these Frequently Asked Questions (FAQs) is to give clarifications regarding treatment of Corporate Social Responsibility (CSR) spending in the books of accounts and disclosures in the Financial Statements. It is important to note that these FAQs are guidance to such interpretation and have to be read in the light of the clarifications issued by the Ministry of Corporate Affairs as per Circular No 21/2014 dated June 18, 2014 that a liberal interpretation has to be taken in the matter. The nature of CSR being a way of conducting business in which such organization recognizes interest of all stakeholders to become socially responsible citizens to integrate economic, environmental and social objectives with the company’s operations and growth needs to be taken as a broad guiding principle behind such CSR activities. Such CSR activities should also be in line with the CSR Policy approved by the Board in line with Schedule VII of the Companies Act, 2013.
These FAQs have been approved by the Corporate Laws & Corporate Governance Committee of the Institute of Chartered Accountants of India. It was decided that public comments may be invited on these FAQs.
These draft FAQs give clarifications regarding treatment of CSR spending in the books of accounts and disclosures in the Financial Statements. These draft FAQs is uploaded on ICAI website for public comments with in 15 days i.e., upto 7th February, 2015.
Link to Direct Download from ICAI Website