The provision for Corporate Social Responsibility under the Companies Act, 2013
Brief Introduction
The Ministry of Corporate Affairs (MCA), on 27th February, 2014, notified Section 135 of the Companies Act, 2013 (Act) on Corporate Social Responsibility (CSR) by virtue of which all companies falling within the prescribed threshold limits would be required to constitute a CSR Committee (Committee) which shall be comprised of the Board of Directors (Board). The Committee is required to formulate and monitor the CSR policy of the company.
Threshold for applicability of CSR
The CSR provisions shall be applicable to all companies who in any of the immediately preceding three financial years:

• Had an annual turnover of INR 10 Billion or more ie (1000 crores); or
• Had a net worth of INR 5 Billion or more ie (500 crores); or
• Had a net profit of INR 0.05 Billion or more ie (5 crores)

Companies and Corporate Social Responsibility
Applicability of Section 135 to Companies
As per the balance sheet of a company, if it falls under the purview of Section 135 of the Act then it would be required to spend at least 2% of its average net profits in its immediately preceding three years on CSR activities.

Procedure to be followed by a company under Section 135
According to Section 135 of the Act, a company is required to:

1. Constitute a CSR Committee which shall be comprised of at least 3 of its Board of Directors.: A Board Resolution will need to be passed for appointment of directors to the CSR Committee.
2. The CSR Committee is then required to prepare a CSR policy which shall relate to the activities including: a) eradicating extreme hunger and poverty; b) promotion of education; c)  promoting gender equality and empowering women; d) reducing child mortality and improving maternal health; e) combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases; f) ensuring environmental sustainability; g) employment enhancing vocational skills; h) social business projects; i) contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; and j) such other matters as may be prescribed.
3. In the CSR policy, the CSR Committee needs to determine the projects it plans to undertake and the methods of executing and implement such projects.
4. The CSR Committee must also prepare a report on its CSR activities, as per the prescribed format.
5. The CSR policy is then to be put before the Board of Directors for their approval. Once it is approved by the Board of Directors its contents shall be disclosed in its report and the same shall be displayed on the company’s website.
6. The Board of Directors may decide to undertake the CSR activities through a registered trust or a registered society or a company established by the company or its holding or subsidiary or associate company, subject to certain conditions.

Note: The report of the Board of Directors annexed to the Financial Statement to be submitted under Section 134, shall also disclose the composition of the Corporate Social Responsibility Committee.

Hire an Expert, Specialized and Customer Specific Services for Corporate Social Responsibility (CSR) Consulting and Advisory:
Eixil Group has worked for several MNCs and other Indian companies to achieve their CSR objectives in the most efficient and best manner. Experienced and Committed to provide end to end services for clients for their Corporate Social Responsibility (CSR) obligations.
Scope of Corporate Social Responsibility (CSR) Consulting and Advisory Services shall include the following:

• Holding board meetings for formation of CSR Committee.
• Formulation of CSR Policy and approving it via board meeting.
• Selection of the most appropriate and efficient NGO. The NGO’s tax and business registration will be verified by us.
• Procuring a project proposal from the NGO for the Company. Usually NGO’s give a one year duration project proposal.
• Preparing draft agreement between Company and the NGO for providing the CSR Funds to the NGO and to ensure execution of the project as per the project proposal received from the NGO. The funds can be given to the NGO via Demand Draft/RTGS/Cheque.
• Execution of the agreement on a non-judicial stamp paper of INR 100 between the Company and NGO.
• Assistance in transfer of funds from Company to NGO under the agreement.
• Procuring Utility Certificates from the NGO on a quarterly basis so that the Company can maintain its records as to the progress of the Project and the usage of CSR Funds.
• Procuring a final closure certificate from the NGO which will state that the Project has been closed and the CSR Funds have been used as per the agreement.
• Preparing the Directors’ Report for the Annual General Meeting of the Company wherein the CSR funds and project details shall be provided.