XYZ Ltd. wants to avail the enabling provisions of Section 135 of the Companies Act, 2013 in rendering its Corporate Social Responsibility (CSR) activities through any other entity in 2018-19. Enlighten XYZ Ltd. in this

As per the provisions of Rule 4(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, 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. However, Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 provides that the Board of a company may decide to undertake its CSR activities approved by the CSR Committee through a company established under section 8 of the Companies Act, 2013 or a registered trust or a registered society, established by the company, either singly or alongwith any other company, or a company established under section 8 of the Companies Act, 2013 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: 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. 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. 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 including expenditure on administrative overheads, shall not exceed five percent of total CSR expenditure of the company in one financial year. Therefore, advise to XYZ Ltd. in this regard would be- to identify such a trust or a society or a company as specified above having an established track record of three years in undertaking similar programs or projects which the company is going to undertake as a CSR activity or expenditure in this regard.