The government has instituted awards for CSR activities, as part of efforts to incentivise companies to take up work towards social welfare, and invited applications for nomination. The Corporate Affairs Ministry, which is implementing the Companies Act, has asked firms to send their nominations by June 18. Under the Act, a certain class of profitable companies is required to shell out at least 2 per cent of their 3-year average annual net profit towards corporate social responsibility (CSR). The government has instituted the first National Corporate Social Responsibility (CSR) Awards to recognise "companies that have made a positive impact on the society through their innovation and sustainable CSR initiatives". The key focus areas will be human development, economic development, social welfare, environment and sustainable development. The companies have been classified on the basis of annual profit - those having Rs 5 crore or more in 2015-16 and those having less than that level. As per the Companies Act 2013, each entity having a net worth of at least Rs 500 crore, minimum turnover of Rs 1,000 crore or a net profit of Rs 5 crore or more are required to spend on CSR. The norm came into effect from April 1, 2014.
In case of non-spending, the company concerned is required to provide reasons for the same to the ministry. Such companies will also have to constitute a CSR committee of their respective board of directors. This panel will formulate and recommend to the board CSR activities that can be taken up by the firm.
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