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TMI Blog2020 (7) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... e Company (CSR) Rules, 2014 amended from time to time, and also Rule 77 of NCLT Rules,2016 - Application disposed off. - C.P. NO. 124/BB/2019 - - - Dated:- 31-1-2020 - Rajeswara Rao Vittanala, Judicial Member And Ashutosh Chandra, Technical Member Naman G. Joshi for the Petitioner. Smt. Prema Hatti for the Respondent. ORDER Rajeswara Rao Vittanala, 1. C.P.No. 124 of 2019 is filed by M/S. Technicolor India Private Limited ('Petitioner') U/ s 131 R/ w Section 134 of the Companies Act, 2013 r/ w Rule 77 of the NCLT Rules, 2016, by inter alia seeking to permit the Company to revise Board's Report and in specific, the annexure to the report related to Corporate Social Responsibility and any other order(s) ad deemed fit. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: 1) M/S. Technicolor India Private Limited (hereinafter referred to as Company/ Petitioner) was initially incorporated on 06.07.2004 with the Registrar of Companies, Tamilnadu, and subsequently shifted its registered office from the State of Tarnilnadu to National Capital of Delhi and again changed it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port relating to CSR for FY 2017-18: Implementing Agency Sector/ Description Amount spent Chidfund Oxfam India Education 2,71,471 India Foundation for Arts Arts and culture 2,21,567 India Foundation for Arts Arts and culture 2,75,000 4) It is stated that in the annual general meeting held on 28.09.2018, the shareholders have adopted the audited financial statements for the year ended 31 st March 2018 including the audited balance sheet as on 31 st March 2018, the statement of profit and loss account with the report of the board of directors and auditors. The amount spent on the CSR and associated detail is incorrectly captured in the annexure to the Director's report for the fiscal year ended 31 st March 2018 as against the amount recorded in the Audited financial against CSR activity and the issue was discovered during the pre-scrutiny stage of filing of the audited financials of the year. Therefore, the Board has taken a call to set the things right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or delivered to the Registrar or laid before the Company in general meetings and has not stipulated the Draft Previous financial statement or report . Hence, the Board of Directors of the Company cannot be prepared the revised financial statement or report u/ s 131 of Act, 2013. 4) From the Director's report, it is seen that the Company was to spend ₹ 1,13,79,802/- being 2% of the average net profit of the last three years in the year 2017-18. However, the Company has spent only ₹ 3,00,240/- much below the amount prescribed in the Act to which no specific reasons have been given for non-spending, which is required to be given in the Director's report u/ s 135 (5) of the companies Act, 2013. 5) Since the Company has violated the provisions of Section 135 of the Companies Act, 2013, it may be directed to make good the offence and get the offence compounded u/ s 441 of the Companies Act, 2013 for non-constitution of CSR Committee with the requisite number of Members and also for not stating the specific reason for non-spending of the due amount of CSR in the year 2017-18. Further, as per the new amendment of the Companies Act, 2013, the unspent amount und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these pilot projects. (c) It is stated, as per Section 131 of the Act, either of the previous year financial statement or the Directors' report can be revised after obtaining approval of the Tribunal. Further, the Company has sought permission for revision of annexure to the Directors' report relating to CSR and no permission has been sought for any other revision. And the instant Petition is filed only for correction in account not for making the offence good as alleged by the Respondent and Section 135 of the Act, is not at all applicable to the instant case as there is no correction required to be made in the financial statement. (d) There is no violation of section 135 of the Act, which is sought to be compounded through the petition. The sole purpose of the petition is to seek approval for revision of the Directors report, in specific the CSR annexure to the Directors report to ensure that the CSR expense report in the CSR annexure matches with and is consistent with the amount disclosed as CSR expenses in the financial statement, in order to comply with the provision of Section 134 (3) (o) of the Act read with rule 9 of the Companies Rules 2014 and second provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CSR and to file requisite E-form with the Register of Companies, Karnataka. Section 131 of the Companies Act, 2013, empowers the Company to seek to revise financial statement or to revise report in respect of the any of the 3 preceding financial years after obtaining the approval of the Tribunal by filing appropriate application in prescribed form. Therefore the issue is only to seek approval of the Tribunal to revise Board's report and not for seeking any compounding of offence as contended. Moreover, the Tribunal can examine an issue raised before it in case and other issues if any, like violation of any provisions of Act, is beyond the scope of present Petition. 8. Section 135 of the Companies Act, deals with the issue of Corporate Responsibility which reads as under: 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 any 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 dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Companies (Corporate Social Responsibility Policy) Rules, 2014' a) A brief outline of the Company's CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs The CSR policy of the Company has been developed to address the requirements of S. 135 of the Companies Act, 2013 r/ w the Companies (Corporate Social Responsibility Policy) Rules, 2014 r/ w revised Schedule VII and associated circulars and notifications issued by the Ministry of Corporate Affairs. b) The Composition of the CSR Committee: The constituents of the CSR Committee of the Company comprise Mr. Tim Sarnoff. The Company is neither requires to have nor has an independent director. The CSR Committee is responsible for formulating and monitoring the CSR Policy of the Company. The Company has taken steps lately, after the end of the fiscal year, to co-opt two board members of be part of the CSR Committee Therefore the Petitioner has fulfilled the requisite conditions to seek the revision of Board's report in question. 10. The instant petition is filed in accordance with law and due notice were o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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