1.

Applicability to

[S. 135(1), Explanation to
S. 135, R. 3(1)]

Every company having

• net worth [defined at S. 2(57)] > ₹ 500 crores, or
• turnover [defined at S. 2(91)] > ₹ 1000 crores or
• a net profit as per S.198 > ₹ 5 crores

during the immediately preceding FY

including its HoldCo/Sub Co, and

a foreign Co defined u/s 2(42) of Co Act 2013 having its Branch/Project Office in India

2.

Computation of Net Profit u/s 198

3.

Immediate Action to be taken by such Co [S. 135(1)]

constitute a CSR committee of BoD consisting of > 3 directors, out of which at least 1 director should be an ID

• A Co not requiring to appoint an ID u/s 149 shall have CSR committee of > 2 directors

4.

CSR Committee – Relaxation

[R. 3(5)]

5.

Role of CSR Committee
[S. 135(3), R. 5(2)]

• formulate and recommend to BoD, a CSR Policy indicating the activities to be undertaken by the Co as specified in Sch VII;
• recommend the amount of expenditure to be incurred on the activities referred to above; and
• monitor CSR Policy [R. 6] of the Co from time to time
  • institute a transparent monitoring mechanism for implementation of the CSR projects/programs/activities [R.4, Sch VII] undertaken by the Co

6.

Activities NOT considered as CSR activities
[R. 4(6),(7)]

• activities undertaken in pursuance of its normal course of business
• those which benefit only the employees of the Co and their families
• contribution of any amount directly or indirectly to any political party u/s 182 of Co Act 2013

7.

Responsibility of Board

[S. 135(4), (5), (6), Explanation to S. 135 & R. 6(1) 2nd proviso]

• after taking into account the recommendations made by the CSR Committee, approve the CSR Policy for the Co;
• ensure that the activities included in CSR Policy of the Co are :

  • related to the activities included in Sch VII of Co Act 2013
  • undertaken by the Co

• Co spends, in every FY, at least 2% of the average net profits of the Co made during 3 immediately preceding FYs ¹⁵(or where the Co has not completed 3 FYs since its incorporation, during such immediately preceding FYs)
  • if the Co fails to spend such amount ¹⁷(unless the unspent amount relates to any ongoing project referred to below) ⟶ the Board’ report should specify the reasons for not spending the amount ¹⁷(and transfer the unspent amount to a Fund specified in Schedule VII within 6 months from the expiry of FY
  • If amount remaining unspent pursuant to any ongoing project fulfilling prescribed conditions ⟶ the Co to open a special a/c for that FY in any scheduled bank to be called the Unspent Corporate Social Responsibility Account and transfer unspent amount to such account within 30 days from the end of FY
    • If any amount remaining unspent at the end of 3rd FY ⟶ transfer the unspent amount to a Fund specified in Schedule VII within 30 days from the date of completion of 3rd FY)
• Preference for CSR spend should be given to the local area and areas around it where it operates

8.

Co ceasing to be covered
u/s 135

[R. 3(2)]

Every Co which ceases to be covered u/s 135(1) of Co Act 2013 for 3 consecutive FYs shall not be required to –

1. Constitute a CSR Committee; and
2. Comply with the provisions of S. 135 (2) to (5);

till such time it meets the criteria specified in S. 135(1)