Consider the following statements about the Corporate Social Responsibility CSR provisions in the 20...........

Governance Issues Corporate Governance

Consider the following statements about the Corporate Social Responsibility (CSR) provisions in the 2013 companies act and identify the correct one

The CSR provisions are applicable to all registered companies in India

As per the provisions companies have to spend at least 3% of their average profit in the last three years on CSR activities

As per the Act the companies have to CSR committee to oversee the CSR activities*

All are correct

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Explanation:

Section 135 of the Companies Act provides the threshold limit for applicability of the CSR to a Company i.e. (a) net worth of the company to be Rs 500 crore or more; (b) turnover of the company to be Rs 1000 crore or more; (c) net profit of the company to be Rs 5 crore or more.

Further as per the CSR Rules, the provisions of CSR are not only applicable to Indian companies, but also applicable to branch and project offices of a foreign company in India.

Every qualifying company requires spending of at least 2% of its average net profit for the immediately preceding 3 financial years on CSR activities.

Further, the qualifying company will be required to constitute a committee (CSR Committee) of the Board of Directors (Board) consisting of 3 or more directors. The CSR Committee shall formulate and recommend to the Board, a policy which shall indicate the activities to be undertaken (CSR Policy); recommend the amount of expenditure to be incurred on the activities referred and monitor the CSR Policy of the company. The Board shall take into account the recommendations made by the CSR Committee and approve the CSR Policy of the company.

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