Getting Ready to Act upon Social Responsibility Corporate Social Responsibility

SECTION 135 Applicability: Section 135 and Schedule VII of the Companies Act 2013, is made applicable from 1st April, 2014. Companies covered: The Company having net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more or net profit of Rs. 5 crore or more during any financial year. Composition of CSR Committee: 3 or more directors, out of which at least one director shall be an independent Director. Unlisted Public Company or a Private Company can go without the Independent Director. Role of the CSR Committee: To institute a transparent monitoring mechanism for implementation of the CSR projects or programmes or activities undertaken by the Company.

Role of the Board: To Ensure that Company spend in every financial year atleast 2% of average net profit made during last 3 financial years; To approve CSR policy after taking account suggestions made by CSR Committee; To disclose contents of CSR Policies in CSR Report and in Company’s website; Ensure that activities framed under CSR policy are actually undertaken by the Company; If the Company fails to spend the amount earmarked for CSR activities, the Board Report to disclose reasons for not spending the amount.

How to undertake CSR activities: the Board of a company can decide to undertake CSR activities approved by CSR committee through Registered Trust, or Registered Society, or Company established by the company or its holding or subsidiary or associate company.

Activities to be included in the CSR Policy: Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water; Promotion of education including special education and employment enhancing vocation skills especially among children, women, elderly and differently abled and livelihood enhancement projects; Promotion of gender equality and empowering women, setting up homes and hospitals for women and orphans, setting up old age homes, day care centers and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups; Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water;

Activities to be included in CSR Policy (Contd….)- Protection of national heritage, art and culture including restoration of building and sites of historical importance and works of art; setting up public libraries, promotion and development of traditional arts and handicrafts; Measures for the benefit of armed forces veterans, war windows, and their dependants; Training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports; Contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; Contribution or funds provided to technology incubators located within academic institutions which are approved by the Central Government; Rural development projects.