Lecture: Corporate Social Responsibility (CSR)

Introduction

• Discusses details of CSR, including amendments and applicability.
• PM CARES Fund creation discussed.
• Emphasis on taking detailed notes and doing writing practice for theory exams.
• Importance of having dedicated CSR teams within companies.

Applicability of CSR

• Applicable to large companies meeting certain criteria:
  • Net worth: 500 crore or more
  • Turnover: 1000 crore or more
  • Net profit (before tax): 5 crore or more
• Covers the creation of CSR committees.
  • Minimum of 3 directors, including at least 1 independent director.
  • If no independent director, committee consists only of directors.

Key Points on CSR Committees

• Main purpose: Setting up dedicated teams to handle CSR policies.
  • Develop CSR policy in line with Schedule VII.
  • Decide on the minimum amount to be spent: 2% of average profit of past 3 years.
  • Monitor and evolve the CSR policy over time.
• Companies must have CSR reports detailing expenditures and projects.
• Penalties for non-compliance.
  • Section 135 includes heavy penalties for non-adherence.

CSR Activities and Amendments

• Emphasis on local area CSR activities.
• Selection of focused CSR activities for better impact.
• CSR policy should include specific areas such as:
  • Hunger and poverty
  • Women empowerment
  • Environmental sustainability
  • National heritage
  • Armed forces, etc.
• Recent amendments and extensions to CSR activities.
  • Integration of PM CARES fund.

Spending and Monitoring of CSR Funds

• 2% of average net profit of past 3 years to be spent on CSR activities.
• Non-spent amounts to be transferred within specific timelines.
  • Non-spent amounts for ongoing projects to be deposited in special bank accounts, utilized within 3 years.
  • Failing to spend within 3 years, funds to be transferred to PM CARES.

Conclusion

• CSR mandates apply to companies meeting set financial criteria.
• Importance of setting up dedicated CSR committees within companies.
  • Focus on creating, implementing, and monitoring CSR policies.
• Reporting and compliance is crucial, with specified penalties for non-compliance.
• Emphasis on proactive engagement in high-impact CSR activities.

Study Tips

• Key sections and penalties should be memorized.
• Utilize printed and handwritten notes for thorough understanding and revision.
• Engage in writing practice for better preparation and retention of CSR concepts.