MSL / Note on CSR (inclusion provisions of all amendments till date)

From : Secretarial & Legal Department / 11 March 2021

CSR Committee - Every company (private & public) which meets following criteria
in the immediately preceding financial year, shall constitute CSR
Committee:

(1) Having net worth of Rs. 500 Crore or more, or

(2) Turnover of Rs. 100 Crore or more, or
(3) Net profit of Rs. 5 Crore or more

- Composition of CSR Committee

Company required to appoint Company not required to

ID appoint ID
3 or more directors, out of 2 or more directors
which at least one director
shall be independent director.

CSR Policy - CSR Committee shall formulate and recommend CSR Policy to
the BOD.
- CSR Policy shall indicate activities to be undertaken by the
company in areas or subject specified in Schedule VII.
- BOD shall approve the CSR Policy.

Check whether CSR Policy of your company contain all points

covered by the new definition of CSR Policy. If not, amend the
CSR Policy to include the same.

A company can engage international Organisation for designing,

monitoring and evaluation of the CSR projects or programme as
per the CSR Policy as well as for capacity building of their own
personnel for CSR.

CSR Policy to include the following:

(1) Statement containing the approach and director given by the

BOD, taking into account the recommendation of CSR
Committee
(2) Guiding principles for selection, implementation and
monitoring of activities
(3) Formulation of Annual Action Plan
 Note: Guiding factors for formulation of AAP shall be covered int
the CSR Policy. Formulation of AAP for each year is the
responsibility of CSR Committee. It should be framed as per CSR
Policy.

CSR Corpus - Company shall ensure 2% of the average net profits of the
company made during the 3 immediately preceding financial
years are spent of CSR activities
- If company has not completed 3 years since its incorporation,
2% of the net profit during such immediately preceding financial
year.

Preference shall be given to the local area and areas around

which company operates for spending CSR corpus.

Annual Action Plan  Annual Action Plan shall cover CSR activities to be
undertaken during the financial year.
 CSR Committee shall formulate AAP and recommend it to
the BOD for their approval
 AAP shall be framed as per CSR Policy of the Company

AAP shall include the following:

(1) The list of CSR projects or programs that are approved to be

undertaken in areas or subjects specified in Schedule VII
(2) The manner of execution of such projects/program
(3) The modalities of utilization of funds and implementation
schedules for the projects/program
(4) Monitoring and reporting mechanism for the projects
(5) Details of need and impact assessment, if any, for the
projects undertaken by the company.

BOD can alter AAP during the financial year, after recommendation
of its CSR Committee, based on reasonable justification.

CSR through  CSR Projects can be implemented through implementing

Implementing Agency agency viz. trust, society or Section 8 Company, formed by
the Company itself or independent trust, society or Section 8
Company. However, such trust, society or Section 8
Company must satisfy following conditions:

(1) Implementing agency must be either registered public

trust or registered society, Section 8 Company, entity
established by state or central government

(2) Trust, society or Section 8 Company must also be

 registered under Section 12A and 80G of the Income Tax
Act.

(3) Independent trust, society, or Section 8 Company (not

formed by the company) must have track record of
atleast 3 years in undertaking similar activities.

(4) Each type of implementing agencies to be eligible for

accepting CSR contribution from the companies, must
registered with the Central Government by filing the
Form CSR 1 electronically w.e.f. 1 April 2021.

Collaboration - Company can collaborate with other companies for

undertaking CSR projects / activities / programme.
- It should be ensured that CSR Committee of respective
companies are in position to report separately on such
projects or programme in accordance with CSR Rules.

CSR Expenditure - Ceiling for administrative overhead is set at 5% of total CSR

expenditure for the financial year
- Administrative Overhead is defined as follows:

Means expenses incurred by Shall not include the

the company for general expenses directly incurred
management and for the designing,
administration of CSR implementation,
function monitoring, and evaluation
of a particular CSR project
or programme.

Surplus from CSR Any surplus arising out of the CSR activities shall not form part of
activities business profit of the company. There are 3 utilization options given
for such surplus:
(1) Shall be added back to the same project from which surplus
arises.
(2) Shall be transferred to the Unspent CSR Account and spent
in pursuance of CSR Policy and Action Plan of the company
(3) Transfer surplus amount to a Fund specified in Schedule VII,
within a period of 6 months of the expiry of the financial
year.

Excess CSR Excess CSR refers to amount spent on CSR activities is more than
CSR obligation in any financial year. Such excess amount spent can
now be set off against the CSR obligation upto immediate
succeeding 3 financial years.
 Conditions:

(1) Excess amount shall not include any surplus arising from
CSR activities

(2) The BOD shall pass resolution to that effect.

Creation of Capital Company can spend CSR amount for creation or acquisition of a
Asset capital asset. However, Company cannot hold such capital asset in
its own name. Following entities are permitted to hold such capital
asset:

(1) Section 8 Company, Registered Public Trust or Registered

Society having charitable object and CSR Registration
Number.
(2) Beneficiaries of the said CSR Project, in the form of self-
help groups, collectives, entities etc
(3) A public authority

If company has created any capital asset before commencement of

CSR 2021 Rules, it shall comply with these rules by transferring
capital asset to above entities within 180 days i.e. on or before 20
July 2021.

Additional 90 days period i.e. till 18 October 2021 can be granted, if

BOD approves the same on reasonable justification.

Ongoing Project - Multiyear project, not exceeding 3 years excluding financial

year in which it was commenced. That means total life of
ongoing project can be for maximum 4 years.
- Existing project (not initially approved as Multiyear/Ongoing
Project) but whose duration has exceeded beyond one year,
can be approved as Ongoing Project by the BOD based on
reasonable justification.
- BOD shall monitor the implementation of the project with
reference to the approved timelines and year-wise allocation.
If required for the smooth functioning of the project, BOD
can make modification, within overall permissible time
period (i.e. 1+3 years)

Unspent amount of Ongoing Project

- Any amount remaining unspent pursuant to ongoing project

shall be transferred by the company within a period of 30
days from the end of FY to a special account to be opened by
 the company in the scheduled bank to be called as Unspent
CSR Account.
- Such amount shall be spent within 3 financial years from the
date of such transfer.
- If company fails to spent such amount within 3 financial
years, unspent amount shall be transferred to Fund specified
in Schedule VII within 30 days from the end of third
financial year.

BOD duties Board shall satisfy itself that the funds so disbursed have been
utilized for the purposes and in the manner as approved by it.

CFO Certification CEO or the person responsible for financial management shall
certify that CSR funds so disbursed have been utilized for the
purposes and in the manner as approved by the Board.

CSR Reporting - Annual Report on CSR (Annexure I or II) shall be annexed the
Boards Report of the Company.

Annexure I For FY commenced prior to

1 April 2020
Annexure II For FY commencing on or
after 1 April 2020

Impact Assessment (1) Impact Assessment is not defined or explained in the Rules.
However, it is expected that Impact Assessment shall cover
whether the object or purpose for which CSR funds are spent are
achieved, the extent it is completed.
(2) Impact Assessment is mandated for companies having average
CSR Obligation of ₹10 crores Rupees or more in the three
immediately preceding Financial Years shall undertake impact
assessment of their CSR project outlays of one crore rupees or
more, and which have been completed not less than one year
before undertaking the impact study.

Display of CSR Following particulars / documents shall be mandatorily displayed on

activities on website the company’s website:
(1) Composition of CSR Committee
(2) CSR Policy
(3) Projects approved by the Board

Unspent CSR Amount - If Company fails to spend CSR Fund in a particular financial
year, shall transfer such unspent amount to a Fund specified in
Schedule VII.
- Unspent amount to be transferred within a period of 6 months of
the expiry of the financial year.
- As on date there is no specific Fund specified for the purpose.
Therefore, until specific fund is specified, unspent amount can
be transferred to any fund referred to in Schedule VII.
- The Board shall also provide reason for unspent amount in
Directors Report.
- This provision of transfer of unspent CSR funds is not applicable
to funds allocated for Ongoing project. Provisions regarding
unspent amount on ongoing projects are covered under the
heading of ongoing projects.
 Preliminary Information of Implementing Agency

No. Particular
1. Name of the Implementing
Agency
2. Address
3. Year of Establishment
4. Legal Status (1) Section 8 Company
(2) Registered Public Trust
(3) Registered Society
5. Whether registration under
Section 12A of the Income Tax,
1961 is valid, provide
registration number & certificate
6. Whether registration under
Section 80G of the Income Tax,
1961 is in place, provide
registration number & certificate
7. Main Activities as per its Bye
Laws / Incorporation Documents
8. Brief particular of the project for
which fund is proposed to be
used.
Beneficiaries of the project No. of Beneficiaries
Age group
Gender
9. Time period for completion of
the project
10. Geographical are in which
project will be implemented
11. Whether project will be
implemented individually or
along with another Organisation.
12. Name of the other Organisation /
collaboration, if any
13. In case of project is implemented
in collaboration, details about
contribution, role of each partner
14. If any capital asset to be created:
(a) Entity holding capital
asset
(b) Nature of capital asset
(c) Benefit / use of capital
asset
 CSR Project Monitoring Report
No. Particular
1. Name of the Implementing
Agency
2. Date of Funding
3. Brief details of the Project
4. Committed beneficiaries of the No. of Beneficiaries
project Age group
Gender
5. Initially committed time period
for completion of the project
6. Current status of the project
Beneficiaries of the
7. Main Activities as per its Bye
Laws / Incorporation Documents
8. Brief particular of the project for
which fund is proposed to be
used.
Beneficiaries of the project
9. Time period for completion of
the project
10. Geographical area in which
project will be implemented
11. Whether project will be
implemented individually or
along with another Organisation.
12. Name of the other Organisation /
collaboration
13. In case of project is implemented
in collaboration:

(a) Name & Address of the

collaborating agencies
(b) Details of the project
(c) Specific responsibilities
of the participating
entities with regards to
implementation of CSR
project
(d) Details of CSR
contribution of each
collaborating entities and
its separate reporting.

14. If project is Ongoing:

(a) Details of the activity
(b) Time line for completion
(c) Implementing agency, if
any
 Board Resolution for approving & setting off Excess CSR spending

“RESOLVED THAT Board of Directors of the Company be and is hereby take the note that
amount of Rs. ……………(Rupees ………..) in aggregate has been spent by the Company
during financial year ……….. on following CSR activities, over and above approved CSR Funds
of the Company i.e. 2% of the average net profit of the preceding three financial year.
(a)
(b)
“RESOLVED FURTHER THAT Board of Directors of the Company, considering
recommendation of the CSR Committee ratifies and approves excess CSR spending amounting
to Rs. ……… (Rupees …………) and also accord its approval for setting off excess CSR
spending against the CSR funds of the current financial year i.e. ………….”
 CEO Certification Specimen

(date)

The Board of Directors

MSL Driveline Systems Limited
1506, B Wing, ONE BKC,
Bandra Kurla Complex,
Bandra (E), Mumbai 400 051

Dear Sir,

Based on the report submitted by the Implementing Agencies and review carried out by the CSR
Team of the Company, I confirm that CSR fund disbursed during financial year ………., has
been utilized for the purpose and in the manner approved by the Board of Directors of the
Company.

Thanking you.

Pradeep Mestry
CFO