The document discusses the mandatory section on corporate social responsibility (CSR) under the Companies Act 2013 in India. Key points include: 1. The Companies Act 2013 introduced mandatory CSR provisions that require companies meeting certain profit, turnover, or net worth thresholds to spend 2% of their average net profits on CSR activities. 2. Eligible companies must form a CSR committee and develop a CSR policy outlining activities to be undertaken from a provided list, such as eradicating hunger, promoting education, and ensuring environmental sustainability. 3. CSR is a way for companies to integrate social and environmental objectives into their business operations and growth, not just charity, for the common good of stakeholders.

1. COMPANIES ACT 2013 AND
MANDATORY SECTION OF
CORPORATE SOCIAL
RESPONSIBILITY (CSR)

3. THE COMPANIES ACT 2013
 Passed in Lok Sabha on 18th December, 2012
(Bill no. 121 of 2011)
 Passed in Rajya Sabha on 8th August, 2013
(Bill no. 121 of 2011)
 Received Ascent of President 29th August, 2013

4. COMPANIES ACT 2013 V/S COMPANIES ACT 1956
COMPANIES ACT 1956
 13 Parts
 658 Sections
 15 Schedules
COMPANIES ACT 2013
 29 Chapters
 470 Sections
 7 Schedules

5. NEW CHAPTERS INCLUDED IN
COMPANIES ACT 2013
 Chapter Description
 Registered Valuers
 Government Companies
 Companies to Furnish Information
or Statistics
 Nidhis
 National Company Law Tribunal &
Appellate Tribunal
 Special Courts
 Chapter Number
 Chapter 17
 Chapter 23
 Chapter 25
 Chapter 26
 Chapter 27
 Chapter 28

6. CHANGES REGARDING INCORPORATION
RELATING MATTERS
Sr Particulars Provisions Under Provisions Under
Companies Act 1956 Companies Act
1 Types Of Companies Public Company Public Company
Private Company Private Company
One Person Company
2 Maximum No Of Maximum 50 Maximum 200 Members
Members For Private Members
Companies
3 One Persone No Provision For OPC New Concept Introduced
Company
4 Commencement Provisions Applicable Now Applicable To All
Of Business to Public Limited Company Companies Having Share
Only Capital

7. FINANCIAL YEAR
 Financial year in relation to any company or
body corporate, means the period ending on
the 31st day of march every year in order to
align with the provisions of the income tax
act.

8. Corporate Social Responsibility (CSR)

9. Corporate Social Responsibility (CSR)
The idea of CSR first arose in 1953 when it was first
become and academic topic I in H.R. Bowen’s social
responsibilities on the business. Since then, there has
been continouous debate of the concept and its
implementation.There is still no consensus over its
definition.
One of the most contemporary definition is from the
world bank group stating “corporate social
responsibility is the commitment of business to
contribute to sustainable economic development by
working with employees, their families, the local
community and society at large to improve their lives
in ways that are good for business.

10. CSR Under The Companies Act 2013
Companies act 2013 has introduced mandatory corporate
social responsibility (CSR).Section 135 provides the
board legal frame work leaving a scope of varied
interpretation whether it is really mandatory or simply
having a CSR policy and spending some money and
disclosing the reason for not-spending 2% of average net
profit using second proviso to section 135(5).
The ministry of corporate of affairs in his august 12, 2013
section 135 (5) require eligible company to ensure
spending 2% of average profit of the preceding three
years which is known at beginning of a financial year.

11. Compulsory CSR Contribution
Section 135 of companies act 2013 provides a legal framework for
implementing CSR through board committee.CSR is mandatorily
applicable to companies which statisfies net worth or turn over or profit
limit :
 Every company having
Net worth of Rupees 500 Crore or more, or
Turnover of Rupees 1,000 Crore or more, or
Net profits of Rupees 5 Crore or more during any financial year shall
constitute CSR Committee.
 Committee to consist of at least three directors out of which at least one
should be independent director.
 CSR Committee shall formulate and recommend policy to Board, which
shall indicate activities to be undertaken by the company.

12. CSR IS NOT CHARITY
• CSR is the process by which an organization think
about and evolves its relationship with stakeholders for
the common good and demonstrate its commitment in
this regard by adoption of appropriate business
processes and strategies.
• CSR is a way of conducting business, by which
corporate entities visibly contribute to the social good.
Socially responsible companies do not limit themselves
to using resources to engage in activities that increase
only their profits. They use CSR to integrate economic
environmental and social objectives with the company’s
operations and growth.

13. Activities Under CSR
 Eradicating extreme hunger and poverty
 Promotion of education
 Promoting gender equality and empowering women
 Reducing child morality and improving maternal health
 Ensuring environmental sustainability
 Combating human immuno deficiency virus, acquired
immuno deficiency syndrome, malaria and other activities
 Employment enhancing vocational skill