Page 41 - PR Communication Age January-June2020

Now as per the section 135 of the companies Act 2013 Functions of the CSR committee:
Corporate social responsibility policy is mandatory for Y The CSR committee formulates the CSR policy,
all those companies who come under the criteria
Y They recommend CSR activities to be implemented by
mentioned under subsection 1 under section 135 of
company act 2013. the company
Y They set forth budget in detail how company will
Under Sec 135 of companies act implement the project and establish transparency
a. Every company having net worth of Rs.500 crore or
more, or Turnover of Rs 1000 crore or more or profit of Disclosures:
Rs 5 crore or more during any financial year shall have If the company fails to spend such amount, the Board has
to constitute a corporate social responsibility committee to furnish its report made under clause (o) of sub-section
of the Board consisting of three or more directors of 134, specify the reasons for not spending the amount. Under
which at least one director is an independent director. section 8 of the CSR rules it is mandatory for a company
after 1st April 2014. The Company has to furnish in its
b. The Board's report under sub-section(3) of section 134
Board's report an annual report on CSR as prescribed below
and disclose the composition of the corporate social
Y The company CSR policy
responsibility committee
Y Proposed programs to be undertaken by the company
c. The corporate social responsibility committee shall
i) Formulate the guidelines in line with section 135 Y The composition of the CSR committee
and recommend the board ,a corporate social Y Average net profit of the company for the last three
responsibility policy which shall indicate the financial years
activities to be undertaken by the company as
Y CSR expenditure i.e.2% of the average net profit of the
specified in schedule VII
last three financial year as per financial statements
ii) CSR committee also recommend the amount of
Y During calculation of net profits of the companies
expenditure to be incurred on the activities
exclude following things :Any profit arising from any
iii) CSR committee also monitor the corporate social overseas branch or branches of the company or any
responsibility policy of the company from time to dividend received from other companies in India which
time are covered under and complying with the provisions
d. i) The Board of the company after taking into account of the section 135 of the ACT
the instructions mentioned in sub section 1 of sec Y The surplus arises out of the CSR activity will not be part
135 make the corporate social responsibility of business profits of the company
committee and approve the CSR policy for the
company and disclose contents of such policy in its Activities under CSR:
report and also place it on the company's website CSR responsibility of the company is a commitment to
ii) The Board of the company also ensures that the support or to take initiatives to improve the lives of weaker
activities are included in the corporate social sections or underprivileged sectors. The focus areas notified
responsibility policy as per the company ACT. under the section 135 of the companies act 2013 and
companies corporate social responsibility policy rules 2014
e. The Board of every company should ensure that the
are as under:
company shall spend at least 2 percent of the average 1. Eradicating extreme hunger, malnutrition and poverty
net profits of the company made during the three
immediately preceding financial years in pursuance of 2. Promoting education, special education, employment
its corporate social responsibility policy .The company enhancing skills among children, women, etc.
shall give preference to the local area and areas around 3. Improving mental health
it where it operates for spending the amount earmarked 4. Promoting gender equality, empowering women,
for CSR activities. setting up old age homes, Day care centers etc.

"Lovers promise they'll stay; soulmates promise they'll never leave."

PR COMMUNICATION AGE January - June 2020 41