CORPORATE SOCIAL RESPONSIBILITY (CLAUSE 135)
• Every company having net worth of rupees 500 crore or more, or turnover of
rupees 1000 crore or more or a net profit of rupees 5 crore or more during any
financial year shall constitute a Corporate Social Responsibility Committee of the
Board consisting of three or more directors, out of which at least One Director
shall be an Independent Director.
• The C.S.R. Committee shall formulate and recommend Corporate Social
Responsibility Policy which shall indicate the activity or activities to be
undertaken by the company as specified in Schedule VII and shall also
recommend the amount of expenditure to be incurred on the C.S.R. activities.
• The Board of every company 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 C.S.R. policy.
• Where the company fails to spend such amount, the Board shall in its report
specify the reasons for not spending the amount. The approach is to ‘comply or
• The company shall give preference to local areas where it operates, for spending
amount earmarked for Corporate Social Responsibility (C.S.R.) activities.