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CompaniesAct.in: Graduated CSR-Understanding & its impact CompaniesAct.in
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Updated On: 26/12/2014

An ideal business environment has long been understood to be one where the businesses interact with the society and both serve the needs of one another. Thus corporates also have to act socially responsible, and contribute to the social good. Corporate Social Responsibility is about integrating economic, environmental and social objectives with a company’s operations and growth. Experts say that an organization can accomplish sustainable development if CSR becomes an integral part of its business processes.

Section of 135 of the Companies Act, 2013 provides that every company having a net worth of INR 500 crore (5 Billion) or more, or turnover of INR 1,000 crore (10 Billion) or more or a net profit of INR 5 crore (5 Million) or more during any of the three preceding financial year shall constitute a CSR Committee of the Board consisting of 3 or more directors, of which at least one director shall be an independent director. The Board has to ensure that at least 2% of average net profits of the company in the 3 immediately preceding financial years are spent in every financial year on activities in pursuance of its CSR Policy and preference will be given to the local area and areas around which the company operates for such activities.  

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