Mandatory disclosures on the website: If a company has a website, it is mandatorily required to disclose the composition of the CSR committee, its CSR policy, and the projects approved by the board.
CSR committee: This committee must formulate an annual action plan for CSR spends, which lists the CSR projects, implementation and monitoring schedules, and details of impact assessment (if applicable). However, if a company’s CSR spend is less than INR 50 lakh it is not required to create a CSR committee. The board of directors will perform the functions of the committee in such a case.
CSR policy: A company’s CSR policy must include further details of its CSR philosophy, its guiding principles for selecting projects, implementation and monitoring of activities, as well as the formulation of the annual action plan.
Annual disclosures: These are now more detailed, requiring information on the CSR committee’s composition, its meetings, amounts transferred to the Unspent CSR Account or to a fund specified in Schedule VII, and the capital assets that have been created, acquired, or transferred. Additionally, the rules now require the company’s Chief Financial Officer (or equivalent) to certify that the CSR funds have been disbursed and utilised in the manner approved by the board of directors. Details of the impact assessments undertaken, specific disclosures of the amounts incurred towards administrative overheads, and any other information on CSR projects—whether they are new projects or ongoing projects—should be included.
Monetary penalties for non-compliance: Departing from the previous philosophy of ‘name and shame’, the amendments have introduced monetary penalties for the company and every officer in default for non-compliance. A defaulting company is now liable for the lesser of INR 1 crore or twice the amount that should have been transferred to the Unspent CSR Account or the Schedule VII specified fund. Additionally, a defaulting officer is now liable for the lesser of INR 2 lakh, or one-tenth the amount that should have been transferred to the ‘Unspent CSR Account’ or the Schedule VII specified fund.