Corporate Social Responsibility 
                                  (CSR) Legislation
         • For the first time, anywhere in the world, CSR for companies, including CPSEs 
           has been mandated through legislation in India
         • Section 135 of the Companies Act, 2013 contains CSR provisions 
         • Schedule VII of the Act enumerates activities that can be undertaken by CPSEs as 
           CSR
         • Section 135, amended Schedule VII of the Act, and the Companies (Corporate 
           Social Responsibility Policy) Rules, 2014 were notified by M/o Ministry of 
                                    th
           Corporate Affairs on 27  Feb 2014
         • All came into force from 01.04.2014. This is the first year of implementation of 
           CSR by CPSEs under the Act
         • 2014-15 was the first year of implementation of CSR by Companies under the Act
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                            Highlights of Statutory 
                                             Provisions
         • Under Section 135 of the Act, companies, including CPSEs crossing thresholds, i.e.,
             • Net Worth of INR 500 crore or more; OR 
             • Turnover of INR 1000 crore or more; OR 
             • Net Profit of INR 5 crore or more, are required to discharge the obligations of CSR.
         • At least 2% of the average net profits of the company made during 3 immediately preceding 
           financial years are to be spent on CSR activities every year.
         • ‘Net profit’ for computation of CSR spends is to be computed as per Section 198 of the Act 
           and is ‘Profit Before Tax’ (PBT).
         • Such companies have to constitute a CSR committee of the Board, comprising of three 
           Directors or more with at least one Independent Director.
         • The CSR projects or programs or activities undertaken in India only shall amount to CSR 
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           Expenditure, though companies shall give preference to the local area and areas around its 
           operations.
                          Responsibilities of the CSR 
                    Committee & Company’s Board
              Responsibilities of the CSR Committee :
              • To formulate and recommend a CSR policy which shall indicate activities as specified 
                in Schedule VII of the Act.
              •  To recommend amount of expenditure to be incurred on CSR activities
              • To monitor the CSR policy of the company from time to time.
              Responsibilities of the Company’s Board :
              • Approve and disclose CSR Policy in the Annual  Report and on the company website 
              • Ensure implementation of CSR activities as per the Policy
              • Directors’ Report to specify reasons in case the specified amount is not spent 
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              Activities covered in Schedule VII of the Act
          •Eradicating hunger, poverty, malnutrition, promoting healthcare including contributions to 
           “Swach Bharat Kosh”
          •Promoting education and employment enhancing vocational skills; 
          • Promoting gender equality, empowering women;
          •Ensuring environmental sustainability including contribution to “Clean Ganga Fund”;
          •Protection of national heritage, art and culture;
          •Measures for the benefit of armed forces, war widows and their dependents;
          •Promotion of sports;
          •Contribution to the Prime Minister's National Relief Fund or any other fund set up by the 
           Central Government; 
          •Contribution to technology incubators;
          •Rural development projects;                                                             5
          •Slum-area development;
               Activities outside the Purview of 
                                                     CSR
              • The CSR projects or programs or activities that benefit only the employees of the 
                company and their families 
              • One-off events such as marathons/ awards/ charitable contribution/ 
                advertisement/sponsorships of TV programmes etc.
              •  Expenses incurred by companies for the fulfillment of any Act/ Statute of 
                regulations (such as Labour Laws, Land Acquisition Act etc.)
              • Contribution of any amount directly or indirectly to any political party 
              • Activities undertaken by the company in pursuance of its normal course of business.
              • Contributions flowing out of budgetary resources, profits or from the balance sheets 
                of CPSEs to PMNRF.
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