CSR provisions were notified by the Ministry of Corporate Affairs (MCA) on 27 February 2014 and became effective from 1 April 2014.

CSR provisions apply to:

• Indian companies (public or private),

• Holding, subsidiary, or associate companies, and

• Foreign companies having a branch or project office in India,

if they meet any one of the following criteria during any financial year:

• Net worth of ₹500 crore or more, or

• Turnover of ₹1,000 crore or more, or

• Net profit of ₹5 crore or more

Additionally, profit-making Central Public Sector Enterprises (CPSEs) must undertake CSR activities as per government guidelines, even if thresholds are not met.

Such companies must:

• Constitute a CSR Committee of the Board

• Formulate a CSR Policy

• Spend the prescribed CSR amount

• Disclose CSR activities in the Board’s Report

Failure to constitute a CSR Committee attracts penalties under the Act.

Companies meeting CSR criteria in any of the three immediately preceding financial years are required to constitute a CSR Committee with effect from 1 April 2014.

• Minimum 3 directors, including at least 1 independent director

• Private or unlisted public companies not required to appoint an independent director may form the committee without one

• A private company with only two directors may constitute the committee with two directors

• A foreign company may constitute the committee with at least 2 persons, one of whom must be resident in India

The CSR Committee shall:

• Formulate and recommend the CSR Policy

• Recommend the CSR expenditure

• Monitor CSR projects and implementation

The CSR Policy should specify:

• List of CSR projects/programmes under Schedule VII

• Mode of execution and implementation timelines

• Monitoring and reporting mechanism

Companies should give preference to the local area and areas around their operations, including projects within Maharashtra, wherever feasible.

Companies must spend at least 2% of the average net profits of the immediately preceding three financial years on CSR activities.

If a company meets CSR thresholds (e.g., turnover) but has incurred losses:

• It must comply with CSR provisions

• It may not be required to spend, but must explain the reasons for non-spending in the Board’s Report

The Board must disclose reasons for non-spending in its report. Failure to disclose attracts penalties under the Act.

Company may be fined between ₹50,000 and ₹25 lakh

Officers in default may face imprisonment up to 3 years, fine, or both

Net Profit means profit before tax as per the Act, excluding:

• Profits from overseas branches

• Dividends from companies complying with CSR provisions

For foreign companies, net profit is as per Section 381 read with Section 198.

Yes. CSR activities may be implemented through:

• Registered trust

• Registered society

• Section 8 company

Such entities must have a minimum 3-year track record in similar activities.

Yes. CSR can be implemented through group entities (holding/subsidiary/associate), and such entities are not required to meet the 3-year track record condition.

Yes. Companies may undertake CSR projects jointly, provided each company can separately report its CSR contribution.

This is particularly beneficial for SMEs.

The primary responsibility for CSR compliance always remains with the company.

Schedule VII includes activities such as:

• • Poverty alleviation, healthcare, sanitation

  • Education and skill development

  • Gender equality and women empowerment

  • Environmental sustainability

  • Protection of national heritage and culture

  • Support to armed forces veterans

  • Promotion of sports

  • Contributions to government relief funds

  • Rural and slum area development

  • Clean Ganga and Swachh Bharat initiatives

No. Contributions to political parties under Section 182 of the Act do not qualify as CSR.

Only expenditure on Schedule VII activities in India qualifies as CSR expenditure.

CSR does not include:

• • One-off events, sponsorships, advertisements

  • Statutory compliance expenses (e.g., labour law obligations)

No. CSR expenditure cannot be claimed as business expenditure.

Yes, but expenditure on capacity building and administrative overheads must not exceed 5% of total CSR spend in a financial year.

Any surplus arising from CSR activities:

• Shall not form part of business profits

• Should be reinvested into CSR corpus or projects

CSR details must be disclosed in:

• The Board’s Report

• Annexure to CSR Rules

• Foreign companies must report through balance sheet filings

Top 100 listed companies must also file a Business Responsibility Report (BRR).

Yes. CSR Policy and activities must be disclosed on the company’s website, if available.

Yes. The Government of Maharashtra facilitates CSR through a designated State CSR framework/authority, enabling coordination, monitoring, and implementation of CSR projects of state importance.

Companies may register or communicate with the Maharashtra CSR Authority at:

Address:
Arogya Bhavan, 8th Floor
Arogya Bhavan, St. George Hospital Compound
P. D. Mello Road, Mumbai – 400 001

CSR funds may be contributed via:

• Bank transfer to designated account

• Cheque or demand draft submitted to the Authority

The Authority:

• Facilitates CSR compliance

• Ensures utilization of funds as per company directions

• Acts as the nodal implementation and monitoring agency

Yes.

• Written acknowledgement / appreciation letter will be issued

• Periodic utilization and fund statement reports will be provided