A company having a Net Worth of Rs.500 Crores or more (or) Turnover of Rs.1000 Crores or more (or) a Net Profit of Rs.5 Crores or more during the immediately preceding financial year shall spend, in every financial year, atleast 2% of the average net profits of the company made during the three immediately preceding financial years.
In terms of Section 135 read with Schedule VII of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company’s CSR activities shall broadly relate to:
The Company shall implement the CSR activities directly which shall include donating within the scope of CSR Activities mentioned hereinabove and Schedule VII of the Companies Act, 2013.
The Board of Directors of the Company shall satisfy itself that the funds so disbursed have been utilised for the purposes and in the manner as approved by it and the Chief Financial Officer or the Head of the Finance Department shall certify to the effect.
CSR Committee shall comprise of minimum of 3 (Three) Directors out of which one Director shall be an Independent Director and one Director shall be appointed as the Chairperson of the CSR Committee.
B. Scope of CSR Committee
The CSR Committee shall formulate and recommend to the Board of Directors of the Company, an Annual Action Plan in pursuance of its CSR Policy including list of CSR Projects, manner of execution, modalities of utilisation of funds, monitoring and reporting mechanism. Such Annual Action Plan may be altered at anytime during the Financial Year by the Board of Directors of the Company based on the recommendation of CSR Committee.
CSR Expenditure of the Company shall be in compliance with Rule 7 of the Companies (Corporate Social Responsibility Policy) Rules, 2014.
If the Company spends an amount in excess of requirement as provided in Section 135 (5) of the Companies Act, 2013, such excess amount may be set off against the requirement to spend under the said provision upto immediate succeeding three financial years subject to such conditions as provided in Rule 7 of the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The Directors shall give an Annual Report on CSR Activities pertaining to a Financial Year in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 which shall form part of Directors’ Report.