Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding 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.
[Provided that where a company is not required to appoint an independent director under sub-section (4) of section 149, it shall have in its Corporate Social Responsibility Committee two or more directors. (inserted Companies Amendment Act 2017)
The above said specified companies required to spend 2% average net profit of 3 preceding financial years (or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years], in pursuance of its Corporate Social Responsibility Policy.
Treatment of Unspent amount
1. If the unspent amount relates to an ongoing activity, (which is mentioned in the schedule vii) it should be transferred to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, within 30 days of the close of the financial year. and such amount shall be spent by the company within a period of three financial years from the date of such transfer, failing which, the company shall transfer the same to a Fund specified in Schedule VII, within a period of thirty days from the date of completion of the third financial year.
2. If the unspent amount is not relates to an ongoing activity, it should be transferred by the company to the fund specified in schedule vii, within a 6 months of the expiry of the Financial year.