According to the Companies Act, 2013, every company having a net worth of INR 5 billion or more, or turnover of INR 10 billion or more, or a net profit of INR 50 million or more, during any financial year, shall constitute a Corporate Social Responsibility (CSR) Committee of the Board, consisting of three or more directors, of which at least one must be an independent director. Every company, its holding or subsidiary company, or a foreign company having a branch or project office in India, which individually fulfills any one of the criteria mentioned above will be considered a ‘qualifying company’ and would then need to mandatorily perform all the CSR activities specified in Section 135 of the Companies Act, 2013 read with the CSR Rules during any financial year.
The Act expressly states that during the implementation of the CSR Policy, preference must be given by the company to the local area and the area around which it operates. The CSR Rules lay down the method of implementation of CSR activities.
The Act provides the following roles and responsibilities (in regard to CSR) for the Board of Directors: