Presentation made on the sutory provisions of "Corporate Social Responsibility" under the Companies Act, 2012 and the Initiatives taken for CSR by the MP State Forest Development Corporation, Bhopal, India

1. Welcome to the Presentation
On
Corporate Social Responsibility
Under
Companies Act, 2013
(as amended upto 2018)
& CSR Policy Rules, 2014
Initiatives of MP Forest Department,
& MP Forest Development Corporation
By
Ravindra Nath Saxena
Former Principal Chief Conservator of Forests, M.P.

2. OVERVIEW OF THE PRESENTATION
 Why “CSR” is necessary?
 Companies Act, 2013
 Companies (Amendment) Act, 2017, 2019
 Companies (Corporate Social Responsibility Policy) Rules,
2014.
 Companies (Corporate Social Responsibility Policy) Amendment Rules,
2014, w.e.f. 12.09.2014
 Companies (Corporate Social Responsibility Policy) Amendment Rules,
2015, w.e.f. 19.01.2015.
 Companies (Corporate Social Responsibility Policy) Amendment Rules,
2016, w.e.f. 23.05.2016.
 Inserted by the Companies (Corporate Social Responsibility Policy) Amendment
Rules, 2018, w.e.f. 19.9.2018.
N.B.
1. “Board of Diretors” and “CSR Manager” are squarely responsible
for lapses / violations of the Companies Act, 2013.
2. Section and sub-section & rule - wise understanding of the statutes
is necessary due to penal provisions.

3. Strong Joint Forest Management Committees
Network – State Forest Department

5. In rural communities, a girl or woman is
entrusted the job of bringing water & firewood
- Breaking vicious circle of dependence on
firewood & water.

6. Health Camps

7. Livelihood generation through Kosa cultivation

8. Bori Bandhan (Water
Conservation) activity in
Kundam Division,
Jabalpur
Cheap & widespread irrigation through Bori Bandhan

9. Cheap & widespread irrigation through Bori Bandhan

10. Fish Farming in Project Divisions

11. Sports Activities

12. CSR under Companies Act, 2013
• Companies Act, 1957 repealed and replaced by
Companies Act, 2013 – important landmark.
• Section 135: Corporate Social Responsibility:
(1) Every company having
 net worth of rupees five hundred crore or more, or
 turnover of rupees one thousand crore or more or
 a net profit of rupees five crore or more during the
immediately preceding financial year shall constitute a
Corporate Social Responsibility Committee of the Board
consisting of three or more directors, out of which at
least one director shall be an independent director.

13. (2) The Board's report under sub-section (3) of section-
134 shall disclose the composition of the Corporate Social
Responsibility Committee.
(3) The Corporate Social Responsibility Committee
shall, -
(a) formulate and recommend to the Board, a Corporate
Social Responsibility Policy which shall indicate the
activities to be undertaken by the company in areas or
subject specified in Schedule-VII;
(b)recommend the amount of expenditure to be incurred
on the activities referred to in clause (a); and
(c) monitor the Corporate Social Responsibility Policy of
the company from time to time.

14. (4) The Board of every company referred to in sub-section (1)
shall, -
(a) after taking into account the recommendations made by the
Corporate Social Responsibility Committee, approve the
Corporate Social Responsibility Policy for the company and
disclose contents of such Policy in its report and also place it on
the company's website, if any, in such manner as may be
prescribed; and
(b) ensure that the activities as are included in Corporate Social
Responsibility Policy of the company are undertaken by the
company.
(5) The Board of every company referred to in sub-section (1),
shall ensure that the company spends, in every financial year, at
least two per cent. of the average net profits of the company made
during the three immediately preceding financial years, or where the
company has not completed the period of three financial years since
its incorporation, during such immediately preceding financial years,
in pursuance of its Corporate Social Responsibility Policy:

15. Provided that the company shall give preference ot the local
area and areas around it where it operates, for spending the
amount earmarked for Corporate Social Responsibility
activities:
Provided further that if the company fails to spend such
amount, the Board shall, in its report made under clause (o) of
sub-section (3) of Section-134, specify the reasons for not
spending the amount and unless the unspent amount relates to
any ongoing project referred to in sub-section (6) transfer
such unspent amount to a Fund specified in Schedule-VII within
a period of six months of the expiry of the financial years.
Explanation - For the purposes of this section "net profit" shall
not include such sums as may be prescribed and shall be
calculated in accordance with the provisions of section 198.

16. (6) any amount remaining unspent under sub-section (5),
pursuant to any ongoing project, fulfilling such conditions as
may be prescribed, undertaken by a company in pursuance of its
Corporate Social Responsibility Policy, shall be transferred by the
company within a period of thirty days from the end of the
financial year to a special account to be opened by the company
in that behalf for that financial year in any scheduled bank to be
called the “Unspent Corporate Social Responsibility Account”,
and such amount shall be spent by the company in pursuance of
its obligation towards the Corporate Social Responsibility Policy
within a period of three financial years from the date of such
transfer, failing which, the company shall transfer the same to a
Fund specified in Schedule-VII, within a period of thirty days
from the date of completion fo the third financial year.

17. (7) If a company contravenes the provisions of sub-section (5)
sub-section (6), the company shall be punishable with fine which
shall not be less than fifty thousand rupees but which may extend
to twenty-five lakh rupees and every officer of such company who
is in default shall be punishable with imprisonment for a term
which may extend to three years or with fine which shall not be
less than fifty thousand rupees but which may extend to five lakh
rupees, or with both.
(8) The Central Government may give such general or special
directions to a company or class of companies as it considers
necessary to ensure compliance of provisions of this section and
such company or class of companies shall comply with such
directions.
PENAL PROVISIONS

18. Amendment of section 135 under Companies (Amendment)
Act, 2019:
21. In Section-135 of the principal Act, -
(a) in sub-section (5), -
(i) after the words "three immediately preceding financial
years,", the words "or where the company has not completed the
period of three financial years since its incorporation, during such
immediately preceding financial years," shall be inserted;
(ii) in the second proviso, after the words "reasons for not
spending the amount" occurring at the end, the words, brackets,
figure and letters "and, unless the unspent amount relates to any
ongoing project referred to in sub-section (6), transfer such
unspent amount to a Fund specified in Schedule-VII, within a
period of six months of the expiry of the financial year" shall be
inserted;
Amendment of Section-135 under
Companies (Amendment) Act, 2019:

19. (b) after sub-section (5), the following sub-sections shall be
inserted, namely:
"(6) Any amount remaining unspent under sub-section (5),
pursuant to any ongoing project, fulfilling such conditions as may
be prescribed, undertaken by a company in pursuance of its
Corporate Social Responsibility Policy, shall be transferred by the
company within a period of thirty days from the end of the
financial year to a special account to be opened by the company in
that behalf for that financial year in any scheduled bank to be
called the Unspent Corporate Social Responsibility Account, and
such amount shall be spent by the company in pursuance of its
obligation towards the Corporate Social Responsibility Policy
within a period of three financial years from the date of such
transfer, failing which, the company shall transfer the same to a
Fund specified in schedule-VII, within a period of thirty days from
the date f completion of the third financial year.

20. (7) If a company contravenes the provisions
of sub-section (5) or sub-section (6), the company
shall be punishable with fine which shall not be less
than fifty thousand rupees but which may extend to
twenty-five lakh rupees and every officer of such
company who is in default shall be punishable with
imprisonment for a term which may extend to three
years or with fine which shall not be less than fifty
thousand rupees but which may extend to five lakh
rupees, or with both.
(8) The Central Government may give such
general or special directions to a company or class of
companies as it considers necessary to ensure
compliance of provisions of this section and such
company or class of companies shall comply with
such directions".

21. SCHEDULE-VII : COMPANIES ACT, 2013
(See sections 135)
Activities which may be included by companies in
their Corporate Social Responsibility Policies
Activities relating to:—
(i) eradicating extreme hunger and poverty;
(ii) promotion of education;
(iii) promoting gender equality and empowering
women;
(iv) reducing child mortality and improving maternal
health;
(v) combating human immuno-deficiency virus,
acquired immune deficiency syndrome, malaria and
other diseases;

22. (vi) ensuring environmental sustainability;
(vii) employment enhancing vocational skills;
(viii) social business projects;
(ix) 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
(x) such other matters as may be prescribed.

23. COMPANY (CORPORATE SOCIAL RESPONSIBILITY
POLICY) RULES, 2014 –
[GSR 129(E), DATED 27.02.2014]
In exercise of the powers conferred under section 135 and sub-
sections (1) and (2) of section 469 of the Companies Act, 2013 (18
of 2013), the Central Government hereby makes the following
rules, namely:
Short title and commencement.
1. (1) These rules may be called the Companies (Corporate Social
Responsibility Policy) Rules, 2014.
(2) They shall come into force on the 1st day of April, 2014.

24. Definitions:
2. (1) In these rules, unless the context otherwise requires, -
(a) "Act" means the Companies Act, 2013;
(b) "Annexure" means the Annexure appended to these rules;
(c) "Corporate Social Responsibility (CSR)" means and
includes but is not limited to:
(i) Projects or programs relating ot activities 1[areas or subjects]
specified in Schedule VII to the Act; or
(ii) Projects or programs relating to activities undertaken by the
board of directors of a company (Board) in pursuance of
recommendations of the CSR Committee of the Board as per
declared CSR Policy of the company subject to the condition that
such policy will 2[include activities, areas or subjects specified] in
Schedule-VII of the Act.
(d) "CSR committee" means the Corporate Social Responsibility
Committee of the Board referred to in Section-135 of the Act.

25. (e) "CSR Policy" relates to the activities to be undertaken by the
3[company in areas or subjects] specified in Schedule VII to the Act and the
expenditure thereon, excluding activities undertaken in pursuance of normal
course of business of a company;
(f) "Net profit" means the net profit of a company as per its financial
statement prepared in accordance with the applicable provisions of the Act,
but shall not include the following, namely:-
(i) any profit arising from any overseas branch or branches of the
company, whether operated as a separate company or otherwise; and
(ii) any dividend received from other companies in India, which are
covered under and complying with the provisions of section 135 of the
Act:
Provided that net profit in respect of a financial year for which the relevant
financial statements were prepared in accordance with the provisions of the
Companies Act, 1956 (1 of 1956) shall not be required to be re-calculated in
accordance with the provisions of the Act:
Provided further that in case of a foreign company covered under these
rules, net profit means the net profit of such company as per profit and loss
account prepared in terms of clause (a) of sub-section (1) of section 381
read with section 198 of the Act.

26. (2) Words and expressions used and not defined in these rules but
defined in the Act shall have the same meanings respectively
assigned to them in the Act.
Corporate social Responsibility.
3. (1) Every company including its holding or subsidiary, and a
foreign company defined under clause (42) of section 2 of the Act
having its branch office or project office in India, which fulfils the
criteria specified in sub-section (1) of section 135 of the Act shall
comply with the provisions of section 135 of the Act and these
rules:
Provided that net worth, turnover or net profit of a foreign
company of the Act shall be computed in accordance with balance
sheet and profit and loss account of such company prepared in
accordance with the provisions of clause (a) of sub-section (1) of
section 381 and section 198 of the Act.

27. (2) Every company which ceases to be a company covered under
sub-section (1) of section 135 of the Act for three consecutive
financial years shall not be required to -
(a) constitute a CSR Committee; and
(b) comply with the provisions contained in sub-sections (2) to
(5) of the said section, till such time it meets the criteria
specified in sub-section (1) of section 135.

28. CSR Activities.
4. (1) The CSR activities shall be undertaken by the
company, as per its stated CSR Policy, as projects or
programs or activities (either new or ongoing), excluding
activities undertaken in pursuance of its normal course of
business.
1[(2) The Board of a company may decide to undertake its
CSR activities approved by the CSR Committee, through
(a) a company established under section 8 of the Act or a
registered trust or a registered society, established by the
company, either singly or alongwith any other company,
or
(b) a company established under section 8 of the Act or a
registered trust or a registered society, established by the
Central Government or State government or any entity
established under an Act of Parliament or a State
legislature:

29. "(2) The Board of a company may decide to undertake its CSR
activities approved by the CSR Committee, through a registered
trust or a registered society or a company established under
section 8 of the Act by the company, either singly or along with
its holding or subsidiary or associate company, or along with any
other company or holding or subsidiary or associate company of
such other company, or otherwise:
Provided that -
(i) If such trust, society r company is not established by the
company, either singly or alongwith its holding or subsidiary or
associate company, or alongwith any other company or holding
or subsidiary or associate company of such other company shall
have an established track record of three years in undertaking
similar programs or projects;
(ii) the company has specified the project or programs to be
undertaken through these entities, the modalities of utilization of
funds on such projects and programs and the monitoring and
reporting mechanism."

30. Provided that if, the Board of a company decides to undertake
its CSR activities through a company established under section 8
of the Act or a registered trust or a registered society, other than
those specified in this sub-rule, such company or trust or society
shall have an established track record of three years in
undertaking similar programs or projects; and the company has
specified the projects or programs to be undertaken, the
modalities of utilisation of funds of such projects and programs
and the monitoring and reporting mechanism.]

31. (3) A 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 these rules.
(4) Subject to provisions of sub-section (5) of section
135 of the Act, the CSR project or programs or
activities undertaken in India only shall amount tO
CSR Expenditure.
(5) The CSR projects or programs or activities that
benefit only the employees of the company and their
families shall not be considered as CSR activities in
accordance with section 135 of the Act.
COLLABORATION WITH OTHER COMPANIES

32. (6) Companies may build CSR capacities of
their own personnel as well as those of their
Implementing agencies through Institutions
with established track records of at least three
financial years but such expenditure 1[including
expenditure on administrative overheads,]
shall not exceed five per cent of total CSR
expenditure of the company in one financial
year.
(7) Contribution of any amount directly or
indirectly to any political party under section
182 of the Act, shall not be considered as CSR
activity.

33. CSR Committees.
5. (1) The companies mentioned in the rule 3 shall constitute
CSR Committee as under:
(i) 2[a company] covered under sub-section (1) of section
135 which is not required to appoint an independent director
pursuant to sub-section (4) of section 149 of the Act, shall
have its CSR Committee without such director;
(ii) a private company having only two directors on its Board
shall constitute its CSR Committee with two such directors;
(iii) with respect to a foreign company covered under these
rules, the CSR Committee shall comprise of at least two
persons of which one person shall be as specified under
clause (d) of sub-section (1) of section 380 of the Act and
another person shall be nominated by the foreign company.
(2) The CSR Committee shall institute a transparent monitoring
mechanism for implementation of the CSR projects or
programs or activities undertaken by the company.

34. CSR Policy
6. (1) The CSR Policy of the company shall, inter alia, include the
following namely:
(a) a list of CSR projects or programs which a company plans to
undertake 3[area or subjects specified in] the Schedule-VII of
the Act, specifying modalities of execution of such project or
programs and implementation schedules for the same; and
(b) monitoring process of such projects or programs:
Provided that the CSR activities does not include the activities
undertaken in pursuance of normal course of business of a
company:
Provided further that the Board of Directors shall ensure that
activities included by a company in its Corporate Social
Responsibility Policy are related to the 1[areas or subjects specified
in Schedule VII] of the Act.
(2) The CSR Policy of the company shall specify that the surplus
arising out of the CSR projects or programs or activities shall not
form part of the business profit of a company.

35. 7. CSR expenditure shall include all expenditure including
contribution to corpus, for projects or programs relating to CSR
activities approved by the Board on the recommendation of its
CSR Committee, but does not include any expenditure on an
item not in conformity or not in line with activities which fall
within the 2[areas or subjects, specified in] Schedule-VII of the
Act.
CSR Reporting.
8. (1) The Board's Report of a company covered under these
rules pertaining to a financial year commencing on or after the
1st day of April, 2014 shall include an annual report on CSR
containing particulars specified in Annexure.
(2) In case of a foreign company, the balance sheet filed under
sub-clause (b) of sub-section (1) of section 381 shall contain an
Annexure regarding report on CSR.

36. CSR Expenditure.
7. CSR expenditure shall include all expenditure including
contribution to corpus, for projects or programs relating to
CSR activities approved by the Board on the
recommendation of its CSR Committee, but does not include
any expenditure on an item not in conformity or not in line
with activities which fall within the 2[areas or subjects,
specified in] Schedule VII of the Act.
CSR Reporting.
8. (1) The Board's Report of a company covered under these
rules pertaining to a financial year commencing on or after
the 1st day of April, 2014 shall include an annual report on
CSR containing particulars specified in Annexure.
(2) In case of a foreign company, the balance sheet filed
under sub-clause (b) of sub-section (1) of section 381 shall
contain an Annexure regarding report on CSR.

37. Display of CSR activities on its website.
9. The Board of Directors of the company shall, after taking into
account the recommendations of CSR Committee, approve the
CSR Policy for the company and disclose contents of such policy
in its report and the same shall be displayed on the company's
website, if any, as per the particulars specified in the Annexure.

38. ANNEXURE
FORMAT FOR THE ANNUAL REPORT ON CSR ACTIVITIES
TO BE INCLUDED IN THE BOARD'S REPORT
1. A brief outline of the company's CSR policy, including
overviews of projects or programs proposed to be undertaken
and a reference to the web-link to the CSR policy and projects
or programs.
2. The Composition of the CSR Committee.
3. Average net profit of the company for last three financial
years.
4. Prescribed CSR Expenditure (two per cent of the amount
as in item 3 above).
5. Details of CSR spent during the financial year;
(a) Total amount to be spent for the financial year;
(b) Amount unspent, if any;
(c) Manner in which the amount spent during the financial
year is detailed below:

39. (1) (2) (3) (4) (5) (6) (7) (8)
S. No. CSR
project
or
activity
identifi
ed
Sector
in
which
the
project
is
covere
d
Project
s or
progra
ms (1)
Local
area or
other
(2)
Specify
the
state
and
district
where
project
s or
Progra
ms was
undert
aken
Amoun
t outlay
(budge
t)
project
or
progra
ms-
wise
Amoun
t spent
on the
project
s or
progra
ms
Sub-
heads:
(1)
Direct
expend
iture
on
project
s or
progra
ms
(2)
Over-
heads:
Cumulative
expenditure up to
the reporting period
Amount spent
Direct or
through
implementing
agency*
1.
2.
3.
TOTAL

40. Sd/-
(Chief Executive Officer
of Managing Director
or Director)
Sd/-
(Chairman CSR
Committee)
Sd/-
(Person specified under
clause (d) of sub-
section (1) of section
380 of the Act)
(wherever applicable)
• Give details of implementing agency:
6. In case the company has failed to spend the two per cent
of the average net profit of the last three financial years or
any part thereof, the company shall provide the reasons
for not spending the amount in its Board report.
7. A responsibility statement of the CSR Committee that the
implementation and monitoring of CSR Policy, is in
compliance with CSR objectives and Policy of the
company.

41. Circle-wise area under Joint Forest
Management in Madhya Pradesh
2580 3710
4
6510
2966
5630
1994
2971
44
2842
13
4246
6457
3291
5646
3178
6250
12
2727
2188
Area in sq.kms.

42. Number of JFM Committees in Madhya Pradesh
(Circle-wise)
538
4
4074
4413
538
678
893
1329
987
531
453
849
1895
740
1205
1081
1275
948
1017
809

43. Distribution of Forest Villages on Landscape of
Madhya Pradesh
5
0
92 49
4
5
12
86
113
10
5
37
69
42
5
1
13
34
6
1
4
28
12
12
12
1
65
2 14
42
51
Division-wise distributionCoterminus with vulnerable population

44. Distribution of families in forest villages of M.P.
5
12
56
1026
4581
14617
215
869
11498
10241
6145
28
8188
891
7012
2649
216
4621
3145
1055
708
443
5550
359
268
1544 152
448
283
183

45. Bonus Distribution by HCM & HFM at Seoni

46. JFM Activities

47. JFM Initiatives for reducing firewood consumption
Some of the energy conservation initiatives
under taken by M.P. Forest Department are:
 Distribution of 1,52,414 blankets.
 Distribution of 4566 cycles & 407 sewing
machines (50% subsidy by JFMCs).
 Provided 45,188 LPG connections in
collaboration with Indian Oil Corporation (50%
subsidy by JFMCs).
 Distribution of 68,986 pressure cookers (50%
subsidy by JFMCs).
 Facilitated distribution of 39,898 ration cards.
 Distribution of 490 large sized utensil sets to be
used during community celebrations
 264 ponds stocked with fish seeds in 2010-11.
 Operation of 916 fair price shops under PDS.

48. UTENSILS DISTRIBUTION
BICYCLE DISTRIBUTION

49. Public Distribution System (PDS)
• The amendment has been made in the Food Control Order
on 25th June, 2011; effective instructions issued vide letter
No. F-7-16-2010-XXIX-1.
• At present for operation of PDS - JFMC have 242 buildings
to store food grains. Old WFP godowns are also available.
MTA, GOI is ready to finance repair of these old structures.
• About 1156 Joint Forest Management Committees have
expressed interest to set up P.D.S shops. The 1010 JFMCs
in 48 districts have submitted applications to the concerned
District Collectors, for the sanction of ration shops.
• So far 916 Fair Price Ration shops have been sanctioned by
the District Collectors. Currently 490 Ration shops are
functioning in 48 districts
• At present “committee account” of JFMCs posses approx.
Rs.50 crore , which may be utilized for PDS.

50. • Training to generate various livelihood options like
kosa cultivation and lac cultivation has been
imparted to the members of the JFMCs time to
time. In 2010-11 & 2011-12 approx. 1.0 lac Hect.
Forest Land has been selected for "Tussar“
Production & 9730 villagers have been imparted
training in "Tussar" and "Silk" production.
• In the year 2011-12, 20,000 families have been
trained in cultivation of kosa and these trained
villagers are provided with “disease free eggs”
Kosa, safety nets and land allotted in the vicinity
of their respective forest villages for growing
Kosa-worms on Saja, Sal & Arjun trees.
• JFMCS have been provided 7,000 nets - become
a good option for livelihood in these region. In
year 2010-11 & 2011-12 approximate 5.50 crore
Cocoons have been produced.
"Tasar" and "Silk" Production Training To JFMc

52. Joint Forest Management Committee Sports
Activities
• To encourage the participation of younger generation in JFM &
forest protection / management system. Training of sports
activities started.
• Kabaddi & Volleyball Range, Division, Circle, Zone & State
level competitions have been organized in 2011.
• Instruction issued for organizing sports in 2012.

55. Corporate Social Responsibility Initiative
under JFM
 Major PSU corporations like Western Coalfield
Limited (WCL), Northern Coalfield Limited (NCL)
and Power Grid Corporation of India have
consented to get associated with MP CSR
initiatives
 The Western Coalfield Limited has provided
Rs. 10.10 lakhs to JFMCs of Chindwara and Betul
districts.
 Power Grid Corporation has provided Rs. 10.00
lakhs for CSR initiative.
 Northern Coalfield Limited has offered Rs.400.00
lakhs. Final discussion held on 10th March, 2012.
 The CSR funds are channelised through SFDA
account.

56. Ambitious Training Module -
Nav Bihan Yojna
The man objective of training module prepared for forest dwellers are -
• The ensure the participation in the forest conservation and forest
development.
• To ensure spread of education, knowledge and skills among the
members of the JFM committee.
• To achieve the target of financial as well as social development.
• To continue the integration of forest management and increase
productivity of forest.
• To achieve women empowerment.
• To achieve the above targets by increasing the skill development of the
concerned forest officers and employees by providing proper training.
• Capacity Building of JFMC members for REDD, REDD+ and
REDD++ Mechanisms.

58. Nav Bihan Yojna
Three training modules will implemented, in 3 phases:-
A. Joint Forest Management, micro-planning and integrated
development.
B. Forest Conservation and Forest Development.
C. Financial Management and Enterprise development.
• Each training module will be for 3 days, 2 days and final 1
day.
• There will be 40 participants / trainees in each training
module.
• In five years of the scheme 1,72,000 office bearers of
15,228 JFMCs will be covered under the training module.
The “Nav Bihan Training Module for JFMCS already prepared.
Would like to implement under “Green India Mission”

59. Thank you