Page 48 - Banking Finance December 2021

ARTICLE

(Corporate Social Responsibility Rules, 2014 and Schedule VII) operates, for spending the amount earmarked for
of the companies' act 2013. This law brings CSR activity of Corporate Social Responsibility activities.
companies under the purview of corporate law. b. Provided further that if the company fails to spend
such amount, the Board shall, in its report made
The provisions of the CSR shall be applicable to all those
companies which come under the criteria contained in Sub under clause (o) of sub-section (3) of section 134,
Section 1 of Section 135 of the Companies Act, 2013. As per specify the reasons for not spending the amount.
the said section -
1. Every company Mandatory Disclosures under Section 8:
X having Net worth of Rs.500 crore or more; or Section 8 of the CSR Rules is applicable to eligible companies
on or after 1st April, 2014. Under this section, companies
X Turnover of Rs.1000 crore or more; or
shall be required to incorporate in its Board's report an
X A Net Profit of Rs.5 crore or more during any annual report on CSR with the following particulars:
financial year Y A brief outline of the company's CSR Policy, including
shall constitute a Corporate Social Responsibility overview of projects or programs proposed to be
Committee (CSR Committee) of the Board consisting of undertaken
three or more directors, out of which at least one Y The composition of the CSR Committee;
director shall be an independent director.
Y Average net profit of the company for last three
2. The Board's report shall disclose the composition of the financial years;
CSR Committee.
Y Prescribed CSR Expenditure (2% of the amount of the
3. The Corporate Social Responsibility Committee shall,- net profit for the last 3 financial years);
a. formulate and recommend the Board, a Corporate Y Details of CSR Spent during the financial year;
Social Responsibility Policy which shall indicate the Y In case the company has failed to spend the 2% of the
activities to be undertaken by the company as
average net profit of the last three financial year,
specified in Schedule VII;
reasons thereof;
b. Recommend the amount of expenditure to be
incurred on the activities.
Activities permitted under CSR
c. Monitor the Corporate Social Responsibility Policy The Policy recognizes that corporate social responsibility is
of the company from time to time.
not merely compliance; it is a commitment to support
4. The Board of every company initiatives that measurably improve the lives of
a. after taking into account the recommendations underprivileged. Some of the major areas where CSR activity
made by the Corporate Social Responsibility can be undertaken are broadly categorized as under -
Committee, approve the Corporate Social Y Education & skill development
Responsibility Policy for the company and disclose Y Healthcare & sanitation
contents of such Policy in its report and also place
it on the company's website, and Y Rural development project
Y Environment Protection
b. To ensure that the activities as are included in
Corporate Social Responsibility Policy of the Y National heritage protection
company are undertaken by the company. Y Women Empowerment
5. The Board of every company shall ensure that the Y Promotion of sports
company spends, in every financial year, at least two Y Various Central & State Relief funds
per cent of the average net profits of the company Y Funds for technology development
made during the three immediately preceding financial
years, in pursuance of its Corporate Social Responsibility Y Benefits for armed force veterans & families
Policy: Y Slum area development
a. Provided that the company shall give preference to Y Others
the local area and areas around it where it X Hunger, poverty & malnutrition Eradication

48 | 2021 | DECEMBER | BANKING FINANCE