CSR EXPENDITURE BY CORPORATES FOR FY 2021-22
Companies that are subject to CSR provisions are required to spend at least two percent (2%) of their average net profits made during the three (3) immediately preceding financial years on CSR activities as specified in Schedule VII of the Act and in accordance with the Company’s CSR Policy, according to Section 135(5) of the Companies Act, 2013. The following are the checkpoints for the CSR activities to be carried out in FY 2021-22.
CSR COMMITTEE CHECKPOINTS
- Monitoring/reviewing the company’s CSR policy and making recommendations for changes, if necessary;
- Budget and quantity of spending to be incurred on CSR activities should be re-evaluated.
- Recommend to the Board CSR activities, projects, and programmes to be carried out by the Company or by any designated implementing agencies with a unique CSR Registration Number;
- Formulation and recommendation to the Board of Directors of an annual action plan in accordance with the company’s CSR policy, or modification of the existing annual action plan, if any;
- The following items will be included in the annual action plan:
- Modalities of utilization of funds and implementation schedules
- List of CSR Projects approved
- Manner of execution
- Monitoring and reporting mechanism
- Details and need of impact assessment, if any.
CHECKPOINTS APPLICABLE FOR BOARD OF DIRECTOR ON CSR
- Approve any changes to the CSR Policy that the CSR Committee recommends;
- The Approve the budget and amount of money to be spent on CSR initiatives.
- Approve the annual action plan in accordance with the company’s CSR policy.
- When necessary, the Board shall consider the recommendations of the CSR Committee and offer appropriate instructions / directions to the Corporate Social Responsibility Committee.
- Ensure that the company’s Corporate Social Responsibility operations are carried out in compliance with Schedule VII of the Companies Act, 2013 and the company’s Corporate Social Responsibility policy;
- In the case of an ongoing project, the Board of Directors of a Company shall monitor the project’s implementation in accordance with the approved timelines and year-by-year allocation, and shall be competent to make any necessary changes to ensure that the project is completed within the overall permitted time period.
- The company’s Board of Directors must be satisfied that the money disbursed were used for the purposes and in the manner agreed by it, and the person in charge of financial management must attest this.‘*’ The functions of the Corporate Social Responsibility Committee may, however, be discharged by the company’s Board of Directors if the company’s CSR expenditure is less than fifty (50) lakh rupees.
- Companies must also make the makeup of the CSR Committee, Corporate Social Responsibility Policy, and Projects approved by the Board publically available on their website, if they have one.
- Kindly be informed that CSR spending is now required, and any failure to comply with the foregoing provisions will result in harsh penalties. As a result, companies subject to CSR laws must meet their obligation to spend on CSR activities/projects or transfer the required amount to the funds provided in Schedule VII by March 31, 2022 in order to comply with these provisions.
ANNUAL ACTION PLAN DETAILS:-
|No. of projects proposed:|
|Average net profit of the company for last three financial years:|
|Prescribed CSR Expenditure (two per cent of the average net profit of the company for last three financial years):|
|Total CSR Projects Outlay Budget:|
LIST OF CSR PROJECTS OR PROGRAMS TO BE UNDERTAKEN IN AREAS OR SUBJECTS SPECIFIED IN SCHEDULE VII OF THE ACT:
Focus Area From Sch VII
Details of Location / Project
Manner of Execution
Funds Allocated (INR)
|Total Funds Allocated For FY 2021-22|
SCHEDULE OF IMPLEMENTATION INCLUDING DETAILS ON UTILIZATION OF FUNDS
- Depending on the nature of the project, funds will be disbursed in phases or tranches.
- The Corporate Social Responsibility budget will be used for CSR initiatives that the Board will authorise based on the CSR Committee’s recommendations.
- A reimbursement model will be used for specific projects. After a financial review of the expenses incurred, the cash will be disbursed. With the approval of the Corporate Social Responsibility Committee and the Board, the money will be disbursed directly to partner organizations/beneficiaries for the remaining projects.
REPORTING & MONITORING MECHANISM:
- The monitoring mechanism for each project will vary depending on the project’s nature.
- On the basis of periodic reports/Annual Reports and utilisation certificates received from Implementing Agency/ies on the Project/Programs completed during the year, monitoring and reporting will be carried out.
DETAILS OF IMPACT ASSESSMENT & THEIR NEED, IF APPLICABLE
- Companies with a Corporate Social Responsibility budget of INR 10 crore or more in any fiscal year, as well as any projects with outlays of INR 1 crore or more, are required to do impact assessments. Impact evaluations will be carried out in accordance with their application.