Section 135 - Corporate Social Responsibility Committee
Section: 135 of the Companies Act, 2013
Purpose: To ensure that companies contribute to society through various social welfare initiatives and activities.
Applicability: Companies having a net worth of Rs. 500 crore or more or a turnover of Rs. 1000 crore or more or a net profit of Rs. 5 crore or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) Committee.
Timeline: For FY 2020-21, the company must file CSR-2 form on or before 31st May 2022. For FY 2021-22 and onwards, the company must file CSR-2 form as an addendum to Form AOC-4/AOC-4 XBRL/AOC-4 NBFC, as the case may be.
Exemption: If a company fails to spend the prescribed amount on CSR activities, it must disclose the reasons for such failure in its annual report. There are no specific exemptions for filing the CSR-2 form.
Penalty: If a company fails to comply with the CSR provisions, it may face a penalty of up to three times the amount required to be spent on CSR activities. The company may also be liable for any other action as deemed fit by the government.
Due Date: For FY 2020-21, the due date for filing the CSR-2 form is 31st May 2022.
Forms: The CSR-2 form is required to be filed by companies to disclose the amount spent on CSR activities during the financial year.
Reporting Authority: The CSR Committee is responsible for ensuring compliance with the CSR provisions and reporting on the same to the Board of Directors. The Board of Directors, in turn, is responsible for approving the CSR policy and ensuring its implementation. The company must also disclose its CSR activities in the annual report.
