Applicability: Company which satisfies any one conditions

Net worth of INR 500 Cr or more; or

Turnover of INR 1000 Cr or more; or Net profit of INR 5 Cr or more during any financial year
Activities which may be included enlisted in SCHEDULE VII

CSR Committee:

Mandatory to constitute CSR Committee of the board

Constitution: At least 3 Directors; One director shall be an independent director

Role of CSR Committee: Formulate and monitor the CSR policy; and

Recommend the expenditure to be incurred on such activities

Board Role and responsibility: Disclosure of CSR committee and contents of policy in report Board to ensure that that the CSR policy is complied; and The company spends at least 2% of the average net profits made by

the company in the preceding three financial years in accordance

with the policy In case of failure, Board to give reasons in the boards report

Impact: Mandatory to formulate a CSR committee and policy

Difficult for start up Companies to comply with CSR provisions

Deductibility of expenditure incurred under Income-tax Suggestions: Deemed deduction for any CSR expenditure as revenue expenditure under Income-tax A weighted deduction for tax purposes of, say, 150% of the CSR expenditure could be introduced CSR done under Trust etc should also be considered for 2%