India`s new Companies Act 2013 (Companies Act) has introduced several new provisions which change the face of Indian corporate business”. One of such new provisions is Corporate Social Responsibility (CSR). The concept of CSR rests on the ideology of give and take. Companies take resources in the form of raw materials, human resources, etc. from the society. By performing the task of CSR activities, the companies are giving something back to the society.
The introduction of CSR provision in the Companies Act is a welcome step. This step will boost much required social projects with some professional management of the private sector.
Tatva Chintan is not only committed to being a good corporate, but also to being a good neighbor in the communities whom we call home. We contribute as a company to various charitable causes and we seek to participate in ways that touch people’s lives in these communities. The Company aims to create educated, healthy, sustainable and culturally vibrant communities. We also support employees’ commitment to our communities through various programs including our volunteerism initiatives.
Constitution Of CSR Committee
The company has constituted the “Corporate Social Responsibility Committee” (the “CSR Committee”) in accordance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, to ensure that the purpose of this Policy is being achieved.
The composition of the CSR committee of the Board is as under:
- Mr. Ajay M. Patel - chairman
- Mr. Chintan N. Shah - Director
- Mr. Shekar R. Somani - Director
Invitees to the CSR Committee: The CSR Committee may, at its discretion, invite or appoint employees of the Company from time to time to participate in the meetings of the CSR Committee and assist the CSR Committee in the implementation of the CSR Policy. Invitees to the CSR Committee meetings shall be entitled to participate in the deliberations of the CSR Committee but will not be entitled to vote at the meetings of the CSR Committee.
Role And Responsibilities Of The Committee:
- Formulate CSR policy and recommend the same to the Board for its approval;
- Be responsible for identification, selection, approval, planning, execution, supervision, co- ordination and monitoring of various programs/projects and activities under CSR;
- Tecommend the CSR activities/projects and the amount to be expended on such activities/projects, to the Board that the company plans to undertake during the relevant financial year;
- Monitor the implementation of the CSR activities/projects from time to time;
- nstitute a transparent monitoring mechanism for implementation of the projects/programs/activities undertaken or proposed to be undertaken by the company;
- Review performance of the company in the area of “Corporate Social Responsibility” and decide the priority of the activities to be undertaken;
Scope Of Activities Under CSR Initiativ
The CSR activities will be undertaken by the company is aligned to the provisions of Schedule VII of the Companies Act, 2013 (the “Act”). The CSR Committee is empowered to undertake activities provided within the ambit of Schedule VII read with Companies (Corporate Social Responsibility Policy) Rules, 2014.
The following are the activities which can be undertaken by the Company as specified in Schedule VII:
- Eradicating extreme hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water;
- Promotion of education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abed and livelihood enhancement projects;
- Promoting gender equality and empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
- Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, aggro-forestry, conservation of natural resources and maintaining quality of soil, air and water;
- Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
- Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or for social-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;
- Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;
- Rural development projects
The scope of activities may be expanded from time to time as per the guidelines provided in the Companies Act.
The Board of the company may undertake its CSR activities through registered trust or registered society, or a company established by the company or its holding or subsidiary or associate company under Section 8, of the Act or otherwise, provided that, if such trust, societies or company is not established by the company or its holding or subsidiary or associate company, it shall have an established track record of three years in undertaking similar projects and programs
Provided also that, the company has specified the projects or programs to be undertaken through these entities, the moralities of utilization of funds on such projects and programs and the monitoring and reporting mechanism.
The company may also collaborate with other companies for undertaking projects or programs or CSR Activities in such a manner that the CSR committees of respective companies are in a position to report separately on such projects or programs in accordance with companies rules, 2014. However the CSR Committee of such group Companies or Associate Companies shall provide separate reports on such projects or programs in accordance with the applicable laws
Monitoring And Reporting
The Board of Directors of the company shall report in the Board’s Report a detailed description as per the prescribed format, of the CSR activities undertaken and status update thereof.
The CSR Committee is responsible for undertaking the CSR activities and ensuring that the CSR Budget is utilized as per the statutory requirement.
During every financial year, the CSR Committee will meet at least twice in a year for the purpose of undertaking overview of the CSR activities. The committee shall review and discuss the scope of the activities or programs or projects those were undertaken during the financial year as a part of the company’s CSR activities/projects. The Board of Directors of the Company shall from time to time review CSR activities of the Company.
Rules Governing CSR Policy:
- As per the CSR Policy, the company shall undertake such CSR activities as projects or programs (either new or ongoing) not comprising the activities undertaken in pursuance of its normal course of business.
- The company shall not consider the CSR activities as CSR projects or programs or activities that benefit only the employees of the company and their families. This may also encourage its employees to actively and voluntarily participate in the CSR initiatives undertaken by the company.
- Only the CSR projects or programs or activities undertaken by the company in India shall amount to CSR expenditure.
- In no case, the surplus arising out of the CSR activities shall form a part of “business profits” of the company.
- Contribution made by the company of any amount directly or indirectly to any political party shall not be considered as “CSR activity”.
- The company may build CSR capacities of its own personnel as well as those of their Implementing agencies through Institutions with established records of at least three financial years, however, such expenditure (including administrative overheads) shall not exceed five percent of total CSR expenditure of the company in one financial year.
Funding, Allocation And Tax Treatment Of CSR Spend:
- For achieving its CSR objectives through implementation of meaningful and sustainable CSR programs, the Company will allocate 2% of average of its net profits computed as per section 198 of the Companies Act, for the three preceding financial years made by the Company during “every block of three years” as its “Annual CSR Budget”.
- Tax treatment of the CSR spend of the company during every financial year, shall be in accordance with the provisions of the Income Tax Act, 1963 and rules framed there under, as notified by the Central Board of Direct Taxes (CBDT) and as amended from time to time.
- In any financial year, if the company fails to spend the required amount as mentioned above, the Board shall, in its report, specify the reasons for not spending the amount.
Role Of The Board Of Directors:
The Board shall perform the following duties so far as the CSR Policy of the company and the activities relating thereto are concerned. It shall:
- Approve the “Corporate Social Responsibility Policy” for the company after considering the recommendations made by the CSR Committee;
- Disclose the contents of the company’s CSR Policy in the Board Report and shall display the same on the company’s website;
- Ensure that the activities included in the CSR Policy of the company are undertaken by the company;
- Ensure that the company spends at least two per cent (2%) of the average net profits of the company made during the three immediately preceding financial years in every financial year;
- Ensure that preference is given to the local area and areas around it where it operates, for spending the amount allocated for CSR activities;
Amendment In CSR Policy:
Any or all provisions of the CSR Policy would be subject to revision/amendment amendments by the Board of Directors of the company based on the recommendations of the CSR committee in accordance with the Companies Act, 2013 and rules made there under.
The company reserves the right to modify, cancel, add, or amend any of the provisions of CSR policy stated herein above.