CSR Provision of the Companies Act

04/10/23 1

Webinar for NGOsConducted by: Soumitra Ghosh (Founder CEO, CSO Partners)

ApplicabilityCSR policy and reportingProgram sectorsScope for NGO partnershipFinancial allocation

Applicability

•It will also apply to foreign companies registered in India

•Net profit will not include dividend income received from another Indian company following the provisions of the companies law or from profits of its own overseas branches

CSR Committee consisting of three or more directors, out of which at

least one director shall be an independent director

Unlisted public company or private company can have a committee without such an

independent director

A private company having only two directors on its boards shall constitute its committee with two such directors

For foreign company, committee should have at least two personsOne: Resident in India authorized to accept on behalf of the company service of process and any notices or other documents required to be served on the companyOther: nominated by the foreign company

CSR governance : CSR Committee

Role of CSR Committee and the board

• Formulate and recommend a CSR policy

• Recommend activities and amount of expenditure to be incurred

• Monitor the policy from time to time

Constitute a CSR committeeApprove a CSR policy (indicating

the list of activities along with the expenditure) & publish the same in its report and on the website

Spend at least 2% of average net profit during the three immediately preceding financial years. If not, specify the reasons for not spending the amount

Ensure that the activities as are included in CSR policy of the company are undertaken by the company

CSR CommitteeCSR Committee

BoardBoard

ApplicabilityCSR policy and reportingProgram sectorsScope for NGO partnershipFinancial allocation

CSR policy

Targeting

Disclosure

•Display CSR activities on the website•Annual report on CSR

Disclosure

Reporting on CSR spend

CSR project/activity identified

Sector in which the project is covered

Projects/ program

1) Local area or other2) State and district of the project/program

Project/ Program wise budget (Amount outlay)

Amount spent on the projects/programs

Sub heads1)Direct expense2) Overheads

Cumulative expenditure up to the reporting period

Amount spent direct or through implementation agencies

ApplicabilityCSR policy and reportingProgram sectorsScope for NGO partnershipFinancial allocation

Schedule VII

MCA has informed High Court that Schedule VII to include promoting healthcare including preventive healthcare. This would encompass the entire health care area, including the treatment of diseases, etc,

Schedule VII

Schedule VII

ApplicabilityCSR policy and reportingProgram sectorsScope for NGO partnershipFinancial allocation

Scope of partnership

Implementation

ApplicabilityCSR policy and reportingProgram sectorsScope for NGO partnershipFinancial allocation

Budget allocation

Companies act will lead to a huge investment on CSR initiatives

Of the 9000 eligible companies…..

39% of the projected investment is anticipated to be contributed by top 200 companies (Rs.58740 million)

Companies Investment (Million Rs.)

200 58,740

8800 1,21,260

Source: Emerging Philanthropy in India

For further clarifications and guidanceplease contact:

soumitra.ghosh@csopartners.org.in