Applicability: Applicable to every company having a 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.
Timeline: The CSR Committee meeting shall be held at least once in every financial year.
Exemption: In case the amount to be spent towards CSR is less than Rs. 50 lakh, the CSR Committee is not required to be constituted and the function of the Committee may be discharged by the Board of Directors of the company.
Penalty: If the company fails to spend the required amount towards CSR or fails to disclose the amount not spent, then the company shall be liable to pay a fine of at least 2% of the amount required to be spent on CSR or Rs. 50,000, whichever is lower. The fine may extend up to Rs. 25 lakh and the officer-in-default may also be held liable for punishment.
Reporting Authority: The CSR Committee shall recommend to the Board of Directors the activities to be undertaken by the company as specified in Schedule VII of the Companies Act, 2013. The Board shall ensure that the company spends, in every financial year, at least 2% of the average net profits of the company made during the three immediately preceding financial years in pursuance of its CSR policy. The company shall disclose the composition of the CSR Committee and its contents in its annual report.
