Section 135 of Companies Act, 2013 pertaining to Corporate Social Responsibility (CSR) is applicable to following class of companies who during the immediately preceding financial year have:
In this regard, the Board of Directors of such Companies shall mandatory:
a. Formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company
b. Recommend the amount of expenditure to be incurred on the activities referred to in Schedule VII and
Consisting of three or more directors, out of which at least one director shall be an independent director
1. if the company fails to spend such amount, the Board shall, in its report under section 134, specify the reasons for not spending the amount and, *unless the unspent amount relates to any ongoing project, transfer such unspent amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year
2. In case of ongoing CSR project, any unspent amounts to be transferred to a separate bank account within 30 days from the end of financial year.
3. Such amounts to be spent within a period of 3 financial years from the date of such transfer.
4. Failing which, the company shall transfer the same to a fund as specified in the Schedule VII (CSR Rules) within 30 days from the end of the 3rd financial year.
*Amendments are yet to be notified*
Penalties for Non-compliances:
To the Company: Fine not less than Rs. 50,000/- but which may extend to Rs. 25 lakhs, AND
To every officer in default: Imprisonment for a term up to 3 years or Fine not less than Rs. 50,000/- but which may extend to Rs. 5 lakhs, or with both.
Activities which may be included by companies in their Corporate Social Responsibility Policies
Activities relating to:—
Activities which may be included by companies in their Corporate Social Responsibility Policies Activities relating to:—
(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventinve health care and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water.
(ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.
(iii) promoting gender equality, empowering women, 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.
(iv) 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 including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga.
(v) 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 art and handicrafts;
(vi) measures for the benefit of armed forces veterans, war widows and their dependents;
(vii) training to promote rural sports, nationally recognised sports, paralympic sports and olympic sports
(viii) contribution to the prime minister’s national relief fund or any other fund set up by the central govt. for socio economic development and relief and welfare of the schedule caste, tribes, other backward classes, minorities and women;
(ix) contributions or funds provided to technology incubators located within academic institutions which are approved by the central govt.
(x) rural development projects
(xi) slum area development.
Explanation.- For the purposes of this item, the term `slum area’ shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force.]
(xii) disaster management, including relief, rehabilitation and reconstruction activities.
1. In case of Specified IFSC Public Company – Section 135 shall not apply for a period of five years from the commencement of business of a Specified IFSC public company – Notification Dated 4th January, 2017.
2. In case of Specified IFSC Private Company – Section 135 shall not apply for a period of five years from the commencement of business of a Specified IFSC private company – Notification Dated 4th January, 2017