Ministry of Corporate Affairs has notified section 135 of the Companies Act, 2013 to come into effect from 1st April 2014. Section 135 pertains to spending for the purpose of Corporate Social Responsibility by companies. So every company having net worth of Rs.500 crores or more or turnover of Rs.1000 crores or more or net profit of Rs.5 crores or more during any financial year shall constitute a corporate social responsibility committee of the Board consisting of three or more directors of which one shall be independent.
It shall be the duty of the Corporate Social Responsibility Committee (CSR Committee) to formulate and recommend to the Board a CSR Policy which shall indicate the activities as specified in Schedule VII of the Act, recommend the amount of expenditure to be incurred on the various activities and monitor the CSR Policy of the company from time to time.
The Board of Directors report u/s 134 of the Companies Act, 2013 shall disclose the composition of the CSR Committee
The Board of every company should ensure that the company spends in every financial year at least two percent of the average net profits of the company during the three immediately preceding financial years from the formulation of the CSR policy.
http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification1_2014.pdf – notification of the section 135 and the Schedule VII of the Act with effect from 1st April 2014.
Corporate Social REsponsibility Rules 2014 has been notified as per this notification viz. http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification2_2014.pdf
The list of projects/ activities that were hitherto included in the Schedule VII has undergone a change and has become more broad based than what was initially enumerated in the said Schedule VII. The new list of activities/ projects are
1) eradicating hunger, poverty, malnutrition, preventive health care and sanitation and making available safe drinking water;
2) promoting education including special education, and employment enhancing vocational skills, especially among children, women, elderly, and differently abled and livelihood enhancement projects;
3) promoting gender equality, 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;
4) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water;
5) 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;
6) measures for benefit of armed force veterans, war widows and their dependents;
7) training to promote rural sports, nationally recognised sports, paralympic sports and Olympic Sports;
8) contribution to Prime Ministers National Relief Fund or any other Fund set up by the Central Government, for socio economic development and relief and welfare of scheduled castes and scheduled tribes, other backward classes, minorities and women
9) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government
10) rural development projects.
The amendment of Schedule VII is available in this link http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification3_2014.pdf