CNV2-I2-1-Editorial

We are pleased to release December 2018 issue of Corporate Notepad on the theme of “Corporate Social Responsibility” and we hope that readers will find this issue quite interesting reading. We are thankful for the articles from CSR professionals and practitioners from the leading corporate houses to release this issue in time.     Over the past decade the approach to CSR has changed from the philanthropy to self-regulatory and to the present multi-stakeholder approach. Today CSR mandate is looked as game changer as getting to a next level of strategic CSR.  In addition, Ministry of Corporate Affairs has notified in Section 135 and Schedule VII of the Indian Companies Act as well as the provisions of the Companies Rules, 2014 about the Corporate Social Responsibility Policy, which has come into effect from 1 April 2014. The introduction of CSR provision in the Indian Companies Act is a welcome step and all companies, which satisfy the CSR criteria will have to undertake CSR activities under the CSR guidelines. This step will boost much required social projects with some professional management of the private sector.     The concept of CSR Policy notified in Indian Company Act rests on the ideology of give and take. Companies take resources in the form of raw materials, human resources etc from the society. By performing the task of CSR activities, the companies are giving something back to the society.     The 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.    According to the CSR provisions, every qualifying company is required to spend at least 2% of its average net profit for the immediately preceding three financial years on CSR activities. Further, the qualifying company will be required to constitute a CSR committee of the Board of Directors consisting of three 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 company can also make the annual report of CSR activities in which they mention the average net profit for the last three financial years and also prescribed CSR expenditure but if the company is unable to spend the minimum required expenditure the company has to give the reasons in the Board Report for non-compliance, so that no penal provisions are attracted by it.    Once again thanks to CSR professions for contribution in this issue by way of interesting articles, which covers the latest on CSR standards, regulatory compliance & disclosure, unique initiatives, gamut of other CSR activities undertaken and its future road map.

Dr Vinod Sople,  Chief Editor and  Dean (Research) -ITM Group Institutions