WellBeing Health Group, is a conglomerate which provided various services relating to health, well-being and other medical facilities including specialized hospital care and other medical amenities. Sudaam, a Practising

According to section 135(1) of the Companies Act, 2013 (the Act), 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 (CSR) Committee of the Board consisting of three or more Directors, out of which at least one director shall be an independent director. According to section 135(5) of the Act , Board of every company referred to in section 135(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. In the matter of for Hrudaya Pvt Ltd., in the given situation: the amount to be spent during Financial Year 2021-22 based on the profit for the Financial Year (FY) 2020-21 is 2% of ₹ 8.10 Crore i.e. ₹ 16,20,000/-. the amount to be spent during Financial Year 2022-23 based on the profit for the Financial Year(FY) 2021-22 and 2020-21 is 2% of ₹ [(8.10+18.50)/2] Crore i.e. ₹ 26,60,000/-. According to section 135(9) of the Act , where the amount to be spent by a company under section 135(5) does not exceed fifty lakh rupees, the requirement under section 135(1) for constitution of the Corporate Social Responsibility Committee shall not be applicable and the functions of such Committee provided under section 135 shall, in such cases, be discharged by the Board of Directors of such company. Since the amount to be spent by Hrudaya Pvt Ltd. in FY 2021-22 as well as 2022-23 under section 135(5) of the Act is less than ₹ 50,00,000/-, the requirement under section 135(1) for constitution of the Corporate Social Responsibility Committee shall not be applicable to Hrudaya Pvt Ltd. and the functions of the CSR Committee shall be discharged by the Board of Directors of Hrudaya Pvt Ltd. Further, if the company fails to spend the prescribed minimum amounts (2%) as referred above within the respective financials years, then the Board shall, in its report made of section 134(3)(o) of the Act , specify the reasons for not spending the amount and the company shall, within a period of 6 months from the end of the relevant FY, transfer the unspent amount of that particular FY into any one of the Fund specified in Schedule VII, pursuant to Sec 135(5) . However, if the unspent amount pertains to an ongoing project, in which case the company shall, transfer the unspent amount within a period of 30 days from the end of the relevant FY to a special account to be opened by the company in that behalf for that FY 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 of the third financial year. According to section 135(7) of the Act , if a company is in default in complying with the provisions of section 135(5) or section 135(6), the company shall be liable to a penalty of twice the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less. In the Matter of Vyoma Ltd: Proviso to section 135 of the Companies Act, 2013 (the Act) provides that if the company fails to spend such amount, the Board shall, in its report made of section 134(3)(o) of the Act , specify the reasons for not spending the amount and, unless the unspent amount relates to any ongoing project referred to in section 135(6) , transfer such unspent amount to a Fund specified in Schedule VII of the Act, within a period of six months of the expiry of the financial year. According to section 135(6) of the Act , any amount remaining unspent under section 135(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 of the third financial year. Further, in the event of a default in complying with the provisions of section 135(5) or section 135(6), the company shall be liable for penalty under Sec 135(7) as referred above. In view of the above and on the basis of the given facts, it can be said that there is no non-compliance by Vyoma Ltd. Further, Vyoma Ltd. is required to comply with the provisions of 135(5) and 135(6) of the Companies Act, 2013.