1.Prepared and Presented by Dipendra Prasad Poudel Article Assistant ( Internal Audit) N.Kochhar and Co Corporate social responsibility, Methods of CSR, and its provision in Indian Companies Act 2013

2. Disclaimer This presentation has been prepared by CA Final Student on the basis of Companies Act 2013, Rules, Notifications and Personal Observations. The users and readers are advised to cross check with the original Act and rules before acting upon this presentation. No stone has been left upturned to make this presentation up-to-date and True. You are free to retrieve and share in any forms and devices. No copyright has been reserved. Presented By: Dipendra Prasad Poudel 3. Contents Definition of CSR Common methods used for CSR Applicability of CSR as per Companies Act 2013 Various Provisions and responsibilities of Company Where CSR fund can be spent? Presented By: Dipendra Prasad Poudel 4. Definition of CSR It is also called Corporate conscience, Corporate citizenship, Social Performance or sustainable responsible business. It is a form of corporate social regulation integrated into business model It is continuing commitment by business to behave ethically and contribute to economic development while improving quality of life. CSR functions as a built-in, self regulating mechanism whereby a business monitors and ensures its active compliance with spirit of law, ethical standards and international norms. Presented By: Dipendra Prasad Poudel 5. Common Approach to CSR 1.Corporate Philanthropy 2.Incorporate Strategy 3.Creating Shared Value (CSV) Presented By: Dipendra Prasad Poudel 6. Various Methods Corporate Philanthropy: It is most common approach. This method relate with desire to promote the welfare of others, especially through donation of money. Incorporate method: Another approach is to incorporate CSR strategy to business strategy. Example: Fair Trade Tea and Coffee Creating Shared Value (CSV) : This approach is to garnering increasing corporate responsibility interest. The shared value model is based on idea that corporate success and social responsibility are inter-dependent.Presented By: Dipendra Prasad Poudel 7. Applicability of CSR. Companies Act 2013(Section 135) 2. Turnover 1000 crore or more 1. Net worth 500 crore or more 3. Net profit 5 crore or more CSR is applicable if any of the below mentioned criteria is fulfilled. Net worth means the aggregate value of paid up share capital and all reserves created out of profits and securities premium account, after deducting the aggregate value of accumulated losses , deferred expenditure and miscellaneous expenditure not written off, as per audited balance sheet but doesnt include reserves created out of revaluation of assets, write-back of depreciation and amalgamation. Section 2(57) Turnover means the aggregate value of the realisation amount made from sale, supply or distribution of goods or on account of services rendered, or both, by the company during financial year. Section 2(91) Presented By: Dipendra Prasad Poudel 8. Formation/Responsibilities of CSR Committee Section 135(1) of companies act 2013, mentions the details about formation of CSR Committee 1. The committee should consist of Three or more directors, out of which at least one director should be Independent director. 2. An unlisted public company or a private company shall have its CSR committee without Independent director. (company CSR policy rules 2014) 3. A private company only having two directors in it board shall constitute CSR committee with both the directors. (company CSR policy rules 2014) 4. With respect of foreign companies, CSR committee shall compromise of at least of two persons of which one person should be specified under clause d of sub-section 1 of section 380 of the act and one should be nominated by foreign company. (company CSR policy rules 2014) Presented By: Dipendra Prasad Poudel 9. Section 135(5) The CSR board shall ensure that the company spends, in every financial year at least two percent of the average net profits of the company made during the three immediately preceding financial years, in pursuance to CSR policy. If the company fails to spend such amount board shall in its report specify the reasons for not spending the amount. Section 135(3) CSR committee shall- 1. Formulate and recommend to the board, a corporate social responsibility policy 2. Recommend the amount of expenditure to be incurred on the activities. 3. Monitor CSR policy from time to time. Presented By: Dipendra Prasad Poudel 10. Where CSR should be spent? Schedule VII of Companies Act 2013 ( Revised) I. Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available of clean drinking water. II. Promoting education, including special education and employment enhancing vocational skills specially among children, women, elderly and differently abled and livelihood enhancement programs. III. Promoting gender equity, empowering women, setting up homes and hostels for women and orphans; setting up old age home, day care centers and such other facilities for senior citizens and measures for reducingPresented By: Dipendra Prasad Poudel 11. continued IV. Ensuring environmental sustainability, ecological balance, protection of flora and faunna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air, water and land. V. Protection of national heritage art and culture, including restoration of building and sites of historical importance's and work of art; setting of public libraries and development of traditional arts and handicrafts. VI. Measures for the benefit of armed forces veterans, wars widow, and their dependents. VII. Training to promote rural sports, nationally recognized sports, Paralympic and Olympic sports. Presented By: Dipendra Prasad Poudel 12. continued VIII. Contribution to prime minister national relief fund or any other fund set up by central government for socio-economic development and relief and welfare of scheduled casts, the scheduled tribes, other backward classes and minorities committee. IX. Contributions or funds provided to technology incubators located within academic institutions which are approved by central government. X. Rural Development projects. Presented By: Dipendra Prasad Poudel 13. Presented By: Dipendra Prasad Poudel Thank for reading the presentation. For any suggestions, feedbacks and enquiries regarding this presentation please feel free to write me on below mentioned email address mailfordipendra@gmail.com infodipendra.blogspot.in