Corporate Social Responsibility (CSR) is an idea where the company invests in economic or social welfare activities and promotes its commercial interests. According to Section 135 of the Companies Act, 2013, all companies whose -
or any foreign company who have its branch office or project in India and fulfils the above criteria is also bound to be responsible. In case a company cannot fulfil its responsibilities for 3 consecutive years then, it is not required to do so till the time it is competent enough.
Companies who are eligible for Corporate Social Responsibility needs to constitute a committee containing -
The Corporate Social Responsibility Committee is entitled to perform the following duties –
The Board of Directors play an important role in the Corporate Social Responsibility Committee since they have to consider the recommendations made by the CSR Committee, approve and disclose the same in the board report.
They need to ensure that all the activities included in the CSR Policy are undertaken by the Company and also disclose the composition of the CSR Committee in the Board Report. At least 2% of the average net profits of the company made during 3 financial years.
As per the CSR policy,