India is one of the first countries in the world to make Corporate Social Responsibility (CSR) mandatory for companies following an amendment to the Companies Act,2013 (Companies Act) in 2014.
Section 135(1) of Companies Act, 2013 prescribes thresholds to identify companies which are required to constitute a CSR Committee.
b. The Provision of CSR applies to:
c. Constitution of the CSR Committee:
Note: In case of a Foreign Company, the CSR Committee shall comprise of at least 2 persons of which one person shall be a person resident in India authorized to accept on behalf of the Foreign Company and the services of notices and other documents and the other person shall be nominated by the Foreign Company.
d. Duties of CSR Committee:
The Corporate Social Responsibility Committee shall-
e. Duties of Board:
The Board of every company shall-
f. The Board’s Report shall disclose:
> CSR Reporting:
With respect to CSR Reporting, the provisions are:
The Board’s Report referring to any financial year initiating on or after the 1st April, 2014 shall include an annual report on CSR.
In case of a foreign company, the balance shall contain an annexure regarding report on CSR.
> CSR Policy:
CSR Policy elaborates the Activities to be taken by the Company as named in Schedule VII to the Act and spend. The activities should not the same which are done by the company in its normal course of Business.
Note: Contents of CSR Policy should be placed on the company’s website by the Board.
> The activities mentioned in the policy must be undertaken by the company.
> The Company can join hands with other companies for undertaking projects or programs or CSR.
> The CSR policy shall monitor the projects or programs.
MCA notifies PM CARES as eligible to receive CSR Corpuses of corporates as it amends Schedule VII of Companies Act, 2013 vide Gazette Notification dated 26th May, 2020 and included Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) in Corporate Social Responsibility (CSR) Activities under Section 135 of Companies Act, 2013.
MCA vide General Circular No. 15/2020 dated 10th April 2020 has issued and published COVID-19 related FAQs on Corporate Social Responsibility (CSR).
PM-CARES FUND contribution now qualifies as CSR expenditure under the Companies Act, 2013.
MCA gas recently added that any spending towards curbing COVID-19 spread in India under the list of eligible CSR activities, which are:
1. Abolishing poverty, malnourishment and hunger, improvising health care which includes preventive health care and sanitation and making available safe drinking water.
2. Improvement in education which includes special education and employment strengthening vocation skills among children, women, elderly and differently -abled and livelihood enhancement projects.
3. Improving gender equality, setting up homes and hostels for women and orphans.
4. Introducing the measured for reducing inequalities faced by socially and economically backward groups .
5. Safeguarding environment sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources an maintain a quality of soil, air and water which also includes a contribution for rejuvenation of river ganga.
6. 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.
7. Areas for the advantage of skilled armed forces, war widows and their dependents.
8. Training to stimulate rural sports, nationally recognised sports , Paralympics sports and Olympic sports.
9. Contribution to incubators funded by Central Government or State Government or any agency or Public Sector Undertaking of Central Government or State Government, and contributions to public funded Universities, Indian Institute of Technology (IITs), National Laboratories and Autonomous Bodies (established under the auspices of Indian Council of Agricultural Research (ICAR), Indian Council of Medical Research (ICMR), Council of Scientific and Industrial Research (CSIR), Department of Atomic Energy (DAE), Defence Research and Development Organisation (DRDO), Department of Biotechnology (DBT), Department of Science and Technology (DST), Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).
10. Contributions or funds provided to technology incubators which are approved by the Central Government .
11. Rural Development Projects.
12. Disaster management, including relief, rehabilitation and reconstruction activities.
13. Slum area development where Slum area shall mean 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.