CSR Overview
Understanding which companies are required to spend on Corporate Social Responsibility under Section 135 of the Companies Act, and how that obligation is governed and reported.
A company that meets prescribed thresholds of net worth, turnover or net profit in the preceding financial year must constitute a CSR committee and spend at least two percent of its average net profit of the preceding three years on CSR activities. The company must prepare an annual CSR policy, ensure spending goes to permitted activities and implementing agencies, and report the details in its board report and Form CSR-2 filed with the Registrar.
What our CSR overview service covers
Understanding the obligation before structuring how to meet it.
- Assessing whether the company crosses the net worth, turnover or profit thresholds
- Constituting the CSR committee and drafting the CSR policy
- Calculating the mandatory CSR spend based on average net profit
- Identifying permitted CSR activities and eligible implementing agencies
- Reporting CSR spend in the board report and Form CSR-2
- Advising on unspent CSR amounts and the transfer requirements that follow
Core elements of CSR compliance
Each of these is required once the applicability thresholds are met.
Applicability Thresholds
Net worth, turnover or net profit limits that determine whether CSR obligations apply.
CSR Committee
A board committee responsible for formulating and monitoring the CSR policy.
Mandatory Spend
At least two percent of average net profit of the preceding three years, spent on CSR activities.
Our process
From initial consultation to completion.
Applicability Check
Reviewing net worth, turnover and net profit figures against the prescribed thresholds.
Committee & Policy
Constituting the CSR committee and adopting a board-approved CSR policy.
Spend Calculation & Execution
Calculating the mandatory spend and channelling it to eligible CSR activities.
Reporting
Disclosing CSR spend in the board report and filing Form CSR-2 with the Registrar.
Why CSR compliance needs structured tracking
What sets our approach apart.
Applicability can change year to year
A company can move in or out of CSR applicability as its net worth, turnover or profit fluctuates.
Unspent amounts have strict rules
Unspent CSR money must be transferred to specific funds or accounts within prescribed timelines, or penalties can follow.
Reporting is closely reviewed
CSR disclosures in the board report and Form CSR-2 are a common area of regulatory scrutiny.
CSR Overview questions answered
What people ask before engaging us.
Not sure if CSR provisions apply to your company?
We'll assess your thresholds and set up the committee, policy and reporting.
