Addressing the media, Chatterjee said CSR, which has been made compulsory under the Companies Act, comes into effect from April 1, 2014. All companies with turnover of Rs 1,000 crore or more - or a net worth of at least Rs 500 crore or net profit of at least Rs 5 crore - will have to spend at least two per cent of their three-year average profit on CSR activities.
He added, "Anything done to your employees is not CSR, it is a human resource activity. Compliance with any rule or regulation is not CSR." He asked companies to do beyond the rule and do it voluntarily. Any activity that is not a project is not CSR, the project should have a time frame. Also, an activity that has not been given board approval and does not have a board resolution number is not CSR. These are the important rules for CSR activity. Every single activity proposed during 2014-15 must be incorporated in the plan before March 31, 2013, he said.
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Companies' charity activities would increase manifold, observed Kamleshwar Sharan, president, Greentech Foundation. The CSR economy is also expected to grow manifold, said the experts participating in the meet. Unlike in the past, companies are required to spend in a structured manner. The old ways of handing a cheque for religious cause or an activity that benefited their own workers would not be considered under CSR.
It is estimated registered companies in the country will spend Rs 20,000 crore on CSR activities alone in 2014 and 2015. This means that there would also be a need for CSR professionals and consultants and other specialists.
IICA is an autonomous organisation, established under the Ministry of Corporate Affairs, to function as a capacity-building institution and a think-tank for knowledge development/dissemination and rendering policy advice to the government on issues relating to the corporate world.