According to the Section 135 read with Schedule VII of the companies act which will come into force on 1st April, 2014, all companies with turnover of `1,000 crore and more or a net worth of `500 crore and more or net profit of `5 crore and more -will have to spend at least two per cent of their three-year average profit every year on CSR activity.
The notification is available at http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification1_2014.pdf
The following important new activities have been included in Schedule VII:
(a) Promoting preventive health care and sanitation and making available safe drinking water;
(b) Setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
(c) Ensuring ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and water;
(d) Livelihood enhancement projects;
(e) Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
(f) Measures for the benefit of armed forces veterans, war widows and their dependents;
(g) Training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports;
(h) Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;
(i) Rural development projec
From April 1, all 16,245 registered companies have to nominate three members for their CSR committee from their board..
To understand the various provisions and concepts regarding CSR please go to to http://ssglawfirm.in/corporate-social-responsibility-not-an-option-anymore/