PROPOSED CSR AMENDMENTS UNDER THE NEW COMPANIES AMENDMENT BILL LIKELY TO BE TABLED IN MARCH 2026

 PROPOSED CSR AMENDMENTS UNDER THE NEW COMPANIES AMENDMENT BILL LIKELY TO BE TABLED IN MARCH 2026

OVERVIEW OF THE PROPOSED CSR AMENDMENTS UNDER THE UPCOMING COMPANIES AMENDMENT BILL EXPECTED IN MARCH 2026

KEY PROPOSED CSR CHANGES

•     Lower thresholds for CSR applicability

·      Mandatory inclusion in company's CSR Committee of at least one director with "extensive experience" in planning and implementing CSR projects

• ·      Change in the CSR Reporting Format

WHAT IS THE NEW CHANGE ?

ASPECT	CURRENT LAW (PRE-2026)	PROPOSED AMENDMENT (2026)
NET WORTH THRESHOLD	₹500 crore	₹100 crore
TURNOVER THRESHOLD	₹1,000 crore	₹500 crore
NET PROFIT THRESHOLD	₹5 crore	₹3 crore
CSR COMMITTEE REQUIREMENT	Only large companies	Expanded to mid-sized firms
REPORTING & COMPLIANCE	Basic disclosures	Stricter, standardized, impact-focused

 

IMPLICATIONS FOR COMPANIES

BROADER COVERAGE:	Mid-sized firms will now be required to set up CSR Committees.
HIGHER ACCOUNTABILITY	Listed companies face tighter scrutiny on CSR disclosures.
OPERATIONAL IMPACT:	Firms may need to restructure CSR budgets and governance frameworks.

MANDATORY CSR EXPERTISE ON THE BOARD

Currently, the law dictates the size and independence of a CSR Committee, but it does not require the members to have specific background knowledge. The new Bill introduces a strict qualitative governance requirement:

THE EXPERT DIRECTOR:	The CSR Committee must now include at least one director with extensive experience and expertise in planning and implementing CSR projects.
THE OBJECTIVE:	This ensures CSR is treated as a strategic, outcome-oriented function rather than a basic capital allocation or a peripheral compliance exercise.

 

CASE STUDIES ON NEW AMENMENT IMPACT THE BOTTOM LINE OF THE COMPANIES

KRM AYURVEDA:

·      In FY24, the company reported a Net Profit of ₹3.41 crore (with a turnover of ₹67.57 crore and net worth of ₹11.78 crore).

Current Law:	Fails to meet the ₹5 crore profit trigger. No CSR liability is generated for the subsequent year based on FY24 performance.
Proposed Law:	Crosses the new ₹3 crore trigger. This would immediately mandate the formation of a CSR committee and a legal obligation to deploy funds.

RODEC PHARMA:

While Rodec reported a healthy FY25 Profit After Tax (PAT) of ₹18.25 crore, looking back at its earlier growth phases reveals a similar story.

 In FY22, its PAT was ₹4.60 crore. Under the current Companies Act, it skirted the mandate. Under the proposed amendments, it would have been required to implement CSR protocols years earlier.

PROJECTED FINANCIAL IMPACT & OBLIGATION CALCULATION

If a company like KRM Ayurveda triggers the mandate under the new ₹3 crore baseline, the actual monetary spend is calculated as 2% of the average net profits of the preceding three financial years.

Let's project KRM Ayurveda's CSR liability using their historical data:

HISTORICAL PAT

FY23 (₹7.60 cr) + FY24 (₹3.41 cr) + FY25 (₹12.10 cr)

Average Net Profit (3 Years): ₹23.11 crore / 3 = ₹7.70 crore

Mandatory 2% CSR Spend: ₹7.70 crore x 2% = ₹15.4 Lakhs

RODEC PHARMA

For Rodec Pharma, utilizing their recent data (FY23: ₹5.68 cr, FY24: ₹11.61 cr, FY25: ₹18.25 cr), the 3-year average sits at ₹11.84 crore, yielding a mandatory annual CSR spend of approximately ₹23.6 Lakhs.

KEY TAKEAWAYS

The lower thresholds mean CSR will no longer be limited to India’s largest corporates. Mid-sized firms across IT, manufacturing, and retail will need to institutionalize CSR governance.

For industries like healthcare and finance, the amendments push CSR toward measurable, impact-driven initiatives rather than token contributions.

YOUR COMPLIANCE PARTNER – R V SECKAR FCS ,LLB 79047 19295