Corporate Social Responsibility Policy Rules 2014

1. Short Title and Commencement

Ministry of Corporate Affairs

Notification

New Delhi, the 27th February, 2014

G.S.R. 129(E).- In exercise of the powers conferred under section 135 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules, namely: –

1. Short Title and Commencement

(1) These rules may be called the Companies (Corporate Social Responsibility Policy) Rules, 2014.

(2) They shall come into force on the 1st day of April, 2014.

2. Definitions

5[“2. Definitions. – (1) In these rules, unless the context otherwise requires,-

(a) “Act” means the Companies Act, 2013 (18 of 2013);

(b) “Administrative overheads” means the expenses incurred by the company for ‘general management and administration’ of Corporate Social Responsibility functions in the company but shall not include the expenses directly incurred for the designing, implementation, monitoring, and evaluation of a particular Corporate Social Responsibility project or programme;

(c) “Annexure” means the Annexure appended to these rules;

(d) “Corporate Social Responsibility (CSR)” means the activities undertaken by a Company in pursuance of its statutory obligation laid down in section 135 of the Act in accordance with the provisions contained in these rules, but shall not include the following, namely:-

(i) activities undertaken in pursuance of normal course of business of the company: Provided that any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22, 2022-23 subject to the conditions that-

(a) such research and development activities shall be carried out in collaboration with any of the institutes or organisations mentioned in item (ix) of Schedule VII to the Act;

(b) details of such activity shall be disclosed separately in the Annual report on CSR included in the Board’s Report;

(ii) any activity undertaken by the company outside India except for training of Indian sports personnel representing any State or Union territory at national level or India at international level;

(iii) contribution of any amount directly or indirectly to any political party under section 182 of the Act;

(iv) activities benefitting employees of the company as defined in clause (k) of section 2 of the Code on Wages, 2019 (29 of 2019);

(v) activities supported by the companies on sponsorship basis for deriving marketing benefits for its products or services;

(vi) activities carried out for fulfilment of any other statutory obligations under any law in force in India;

(e) “CSR Committee” means the Corporate Social Responsibility Committee of the Board referred to in section 135 of the Act;

(f) “CSR Policy” means a statement containing the approach and direction given by the board of a company, taking into account the recommendations of its CSR Committee, and includes guiding principles for selection, implementation and monitoring of activities as well as formulation of the annual action plan;

(g) “International Organisation” means an organisation notified by the Central Government as an international organisation under section 3 of the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947), to which the provisions of the Schedule to the said Act apply;

(h) “net profit” means the net profit of a company as per its financial statement prepared in accordance with the applicable provisions of the Act, but shall not include the following, namely:-

(i) any profit arising from any overseas branch or branches of the company, whether operated as a separate company or otherwise; and

(ii) any dividend received from other companies in India, which are covered under and complying with the provisions of section 135 of the Act: Provided that in case of a foreign company covered under these rules, net profit means the net profit of such company as per profit and loss account prepared in terms of clause (a) of sub-section (1) of section 381, read with section 198 of the Act;

(i) “Ongoing Project” means a multi-year project undertaken by a Company in fulfilment of its CSR obligation having timelines not exceeding three years excluding the financial year in which it was commenced, and shall include such project that was initially not approved as a multi-year project but whose duration has been extended beyond one year by the board based on reasonable justification;

(j) “Public Authority” means ‘Public Authority’ as defined in clause (h) of section 2 of the Right to Information Act, 2005 (22 of 2005);

(k) “section” means a section of the Act.

(2) Words and expressions used and not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act. ”]

Amendment

1.Inserted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

2..Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

in sub-rule (1), in sub-clause (ii) of clause (c),for the words:

cover subjects enumerated

the following words shall be subtituted namely:-

“ include activities, areas or subjects specified”

3.Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

in sub-rule (1), in clause (e), for the words:

company as

the following words shall be subtituted namely:-

“company in areas or subjects”

4. Inserted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020. Dated 24.08.2020

5..Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 Dated 22.01.2021 Amendment effective from 22nd January 2021

Original Content :-

Original Omitted Content:-2. Definitions

(1) In these rules, unless the context otherwise requires, –

(a) “Act” means the Companies Act, 2013;

(b) “Annexure” means the Annexure appended to these rules;

(c) “Corporate Social Responsibility (CSR)” means and includes but is not limited to :-

(i) Projects or programs relating to activities 1[areas or subjects] specified in Schedule VII to the Act; or

(ii) Projects or programs relating to activities undertaken by the board of directors of a company (Board) in pursuance of recommendations of the CSR Committee of the Board as per declared CSR Policy of the company subject to the condition that such policy will 2[include activities, areas or subjects] specified in Schedule VII of the Act.

(d) “CSR Committee” means the Corporate Social Responsibility Committee of the Board referred to in section 135 of the Act.

(e) “CSR Policy” relates to the activities to be undertaken by the 3[company in areas or subjects] specified in Schedule VII to the Act and the expenditure thereon, excluding activities undertaken in pursuance of normal course of business of a company;

4[Provided that any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to the conditions that-

(i) such research and development activities shall be carried out in collaboration with any of the institutes or organisations mentioned in item (ix) of Schedule VII to the Act.

(ii) details of such activity shall be disclosed separately in the Annual Report on CSR included in the Board’s Report.]

(f) “Net profit” means the net profit of a company as per its financial statement prepared in accordance with the applicable provisions of the Act, but shall not include the following, namely :-

(i). any profit arising from any overseas branch or branches of the company, whether operated as .a separate company or otherwise; and

(ii) any dividend received from other companies in India, which are covered under and complying with the provisions of section 135 of the Act:

Provided that net profit in respect of a financial year for which the relevant financial -statements were prepared in accordance with the provisions of the Companies Act, 1956 (1 to 1956) shall not be required to be re-calculated in accordance with the provisions of the Act:

Provided further that in case of a foreign company covered under these rules, net profit means the net profit of such company as per profit and loss account prepared in terms of clause (a) of sub-section (1) of section 381 read with section 198 of the Act.

(2) Words and expressions used and not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act.

Amendment

1.Inserted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

2..Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

in sub-rule (1), in sub-clause (ii) of clause (c),for the words:

cover subjects enumerated

the following words shall be subtituted namely:-

” include activities, areas or subjects specified”

3.Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

in sub-rule (1), in clause (e), for the words:

company as

the following words shall be subtituted namely:-

“company in areas or subjects”

4. Inserted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020. Dated 24.08.2020

3. Corporate Social Responsibility

(1) Every company including its holding or subsidiary, and a foreign company defined under clause (42) of section 2 of the Act having its branch office or project office in India, which fulfills the criteria specified in sub-section (I) of section 135 of the Act shall comply with the provisions of section 135 of the Act and these rules:

Provided that net worth, turnover or net profit. of a foreign company of the Act shall be computed in accordance with balance sheet and Profit and loss account of such company prepared in accordance .with the provisions of clause (a) of sub-section (1) of section 381 and section 198 of the Act

2Provided further that a company having any amount in its Unspent Corporate Social Responsibility Account as per sub-section (6) of section 135 shall constitute a CSR Committee and comply with the provisions contained in sub-sections (2) to (6) of the said section

3[Omitted]

Amendment

1. Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 Dated 22.01.2021 Amendment effective from 22nd January 2021

In sub-rule (2), in clause (b), for the words, brackets and figure-

sub-section (2) to (5)

the following shall be substituted namely-

“sub-section (2) to (6)”

2.Inserted by Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022

3.Omitted by Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022

Original Content:

(2) Every company which ceases to be a company covered under subsection (1) of section 135 of the Act for three consecutive financial years shall not be required to —

(a) constitute a CSR Committee; and

(b) comply with the provisions contained in 1[sub-section (2) to (6)] of the said section,

till such time it meets the criteria specified in sub-section (1) of section 135.

4. CSR Implementation

6[4. CSR Implementation. – 7(1) The Board shall ensure that the CSR activities are undertaken by the company itself or through, –

(a) a company established under section 8 of the Act, or a registered public trust or a registered society, exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 or registered under section 12A and approved under 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company; or

(b) a company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government; or

(c) any entity established under an Act of Parliament or a State legislature; or

(d) a company established under section 8 of the Act, or a registered public trust or a registered society, exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 or registered under section 12A and approved under 80 G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.

Explanation.- For the purpose of clause (c), the term “entity” shall mean a statutory body constituted under an Act of Parliament or State legislature to undertake activities covered in Schedule VII of the Act.

(2) (a) Every entity, covered under sub-rule (1), who intends to undertake any CSR activity, shall register itself with the Central Government by filing the form CSR-1 electronically with the Registrar, with effect from the 01st day of April 2021:

Provided that the provisions of this sub-rule shall not affect the CSR projects or programmes approved prior to the 01st day of April 2021.

(b) Form CSR-1 shall be signed and submitted electronically by the entity and shall be verified digitally by a Chartered Accountant in practice or a Company Secretary in practice or a Cost Accountant in practice.

(c) On the submission of the Form CSR-1 on the portal, a unique CSR Registration Number shall be generated by the system automatically.

(3) A company may engage international organisations for designing, monitoring and evaluation of the CSR projects or programmes as per its CSR policy as well as for capacity building of their own personnel for CSR.

(4) A company may also collaborate with other companies for undertaking projects or programmes or CSR activities in such a manner that the CSR committees of respective companies are in a position to report separately on such projects or programmes in accordance with these rules.

(5) The Board of a company shall satisfy itself that the funds so disbursed have been utilised for the purposes and in the manner as approved by it and the Chief Financial Officer or the person responsible for financial management shall certify to the effect.

(6) In case of ongoing project, the Board of a Company shall monitor the implementation of the project with reference to the approved timelines and yearwise allocation and shall be competent to make modifications, if any, for smooth implementation of the project within the overall permissible time period.]

Amendment

1. Inserted by the Companies (Corporate Social Responsibility Policy) Amendment Rules,2014 Dated 12th September 2014
2. Subsitituted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2015 Dated 19th January 2015

For the words “established by the company or its holding or subsidiary or associate company under section 8 of the Act or otherwise”, the words “established under section 8 of the Act by the company, either singly or along with its holding or subsidiary or associate company, oralong withh any other company or holding or subsidiary or associate company of such other company, or otherwise” shall be substituted;

3. Substituted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2015 Dated 19th January 2015.

For the words “not established by the company or its holding or subsidiary or associate company, it”, the words “not established by the company, either singly or along with its holding or subsidiary or associate company, or along with any other company or holding or subsidiary or associate company of such other company” shall be substituted

4. Substituted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2016 Dated 23rd May 2016.

In rule 4, for sub-rule (2), the following sub-rule shall be substituted, :–

“(2) The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, through

(a) a company established under section 8 of the Act or a registered trust or a registered society, established by the company, either singly or along with any other company, or

(b) a company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government or any entity established under an Act of Parliament or a State legislature :

Provided that- if, the Board of a company decides to undertake its CSR activities through a company established under section 8 of the Act or a registered trust or a registered society, other than those specified in this sub-rule, such company or trust or society shall have an established track record of three years in undertaking similar programs or projects; and the company has specified the projects or programs to be undertaken, the modalities of utilisation of funds of such projects and programs and the monitoring and reporting mechanism”.

5. Omitted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020. Dated 24.08.2020
6. Substituted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 Dated 22nd Jan 2021 Amendment effective from 22nd January 2021

Original Content :-

Original Omitted Content:-4. CSR Activities

(1) The CSR activities shall be undertaken by the company, as per its stated CSR Policy, as projects or programs or activities (either new or ongoing), 5[excluding activities undertaken in pursuance of its normal course of business].

4“(2) The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, through

(a) a company established under section 8 of the Act or a registered trust or a registered society, established by the company, either singly or along with any other company, or

(b) a company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government or any entity established under an Act of Parliament or a State legislature:

Provided that- if, the Board of a company decides to undertake its CSR activities through a company established under section 8 of the Act or a registered trust or a registered society, other than those specified in this sub-rule, such company or trust or society shall have an established track record of three years in undertaking similar programs or projects; and the company has specified the projects or programs to be undertaken, the modalities of utilization of funds of such projects and programs and the monitoring and reporting mechanism”.

(3) A company may also collaborate with other companies for undertaking projects or programs or CSR activities in such a manner that the CSR Committees of respective companies are in a position to report separately on such projects or programs in accordance with these rules.

(4) Subject to provisions of sub-section (5) of section 135 of the Act, the CSR projects or programs or activities undertaken in India only shall amount to CSR Expenditure.

(5) The CSR projects or programs or activities that benefit only the employees of the company and their families shall not be considered as CSR activities in accordance with section 135 of the Act.

(6) Companies may build CSR capacities of their own personnel as well as those of their Implementing agencies through Institutions with established track records of at least three financial years but such expenditure 1[“including expenditure on administrative overheads,”] shall not exceed five percent of total CSR expenditure of the company in one financial year.

(7) Contribution of any amount directly or indirectly to any political party under section 182 of the Act, shall not be considered as CSR activity.”

Amendment

1. Inserted by the Companies (Corporate Social Responsibility Policy) Amendment Rules,2014 Dated 12th September 2014
2. Substituted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2015 Dated 19th January 2015

For the words “established by the company or its holding or subsidiary or associate company under section 8 of the Act or otherwise”, the words “established under section 8 of the Act by the company, either singly or along with its holding or subsidiary or associate company, or along with any other company or holding or subsidiary or associate company of such other company, or otherwise” shall be substituted;

3. Substituted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2015 Dated 19th January 2015.

For the words

“not established by the company or its holding or subsidiary or associate company, it”,

the words “not established by the company, either singly or along with its holding or subsidiary or associate company, or along with any other company or holding or subsidiary or associate company of such other company” shall be substituted

4. Substituted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2016 Dated 23rd May 2016.

In rule 4, for sub-rule (2), the following sub-rule shall be substituted, :–

“(2) The Board of a company may decide to undertake its CSR activities approved by the CSR Committee, through

(a) a company established under section 8 of the Act or a registered trust or a registered society, established by the company, either singly or alongwith any other company, or

(b) a company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government or any entity established under an Act of Parliament or a State legislature :

Provided that- if, the Board of a company decides to undertake its CSR activities through a company established under section 8 of the Act or a registered trust or a registered society, other than those specified in this sub-rule, such company or trust or society shall have an established track record of three years in undertaking similar programs or projects; and the company has specified the projects or programs to be undertaken, the modalities of utilisation of funds of such projects and programs and the monitoring and reporting mechanism”.

5. Omitted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020. Dated 24.08.2020
6. Substituted by Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022

Original Content:

(1) The Board shall ensure that the CSR activities are undertaken by the company itself or through –

(a) a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company, or

(b) a company established under section 8 of the Act or a registered trust or a registered society, established by the Central Government or State Government; or

(c) any entity established under an Act of Parliament or a State legislature; or

(d) a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.

5. CSR Committees

(1) The companies mentioned in the rule 3 shall constitute CSR Committee as under.-

(i) 1[a company] covered under subsection (1) of section 135 which is not required to appoint an independent director pursuant to sub-section (4) of section 149 of the Act, shall have its CSR Committee without such director ;

(ii) a private company having only two directors on its Board shall constitute its CSR Committee with two such directors;

(iii) with respect to a foreign company covered under these rules, the CSR Committee shall comprise of at least two persons of which one person shall be as specified under clause (d) of sub-section (1) of section 380 of the Act and another person shall be nominated by the foreign company.

2[(2) The CSR Committee shall formulate and recommend to the Board, an annual action plan in pursuance of its

CSR Policy, which shall include the following, namely:-

(a) the list of CSR projects or programmes that are approved to be undertaken in areas or subjects specified in Schedule VII of the Act;

(b) the manner of execution of such projects or programmes as specified in sub-rule (1) of rule 4;

(c) the modalities of utilisation of funds and implementation schedules for the projects or programmes;

(d) monitoring and reporting mechanism for the projects or programmes; and

(e) details of need and impact assessment, if any, for the projects undertaken by the company:

Provided that Board may alter such plan at any time during the financial year, as per the recommendation of its CSR Committee, based on the reasonable justification to that effect.]

Amendment

1. Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

In clause (i) of sub rule (1), for the words:-

an unlisted public company or a private company

the following words shall be substituted namely

“a company”

2. Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 Dated 22.01.2021 Amendment effective date 22nd January 2021

In rule 5, for sub-rule (2):-

“(2) The CSR Committee shall institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company.”

The following sub-rule shall be substituted, namely:-

“(2) The CSR Committee shall formulate and recommend to the Board, an annual action plan in pursuance of its

CSR Policy, which shall include the following, namely:-

(a) the list of CSR projects or programmes that are approved to be undertaken in areas or subjects specified in Schedule VII of the Act;

(b) the manner of execution of such projects or programmes as specified in sub-rule (1) of rule 4;

(c) the modalities of utilisation of funds and implementation schedules for the projects or programmes;

(d) monitoring and reporting mechanism for the projects or programmes; and

(e) details of need and impact assessment, if any, for the projects undertaken by the company:

Provided that Board may alter such plan at any time during the financial year, as per the recommendation of its CSR Committee, based on the reasonable justification to that effect.”

6. CSR Policy

4[Omitted]

Amendment

1.Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018
in sub-rule (1), in clause (a), for the words
falling within the purview of the following words shall be subtituted namely:- “areas or subjects specified in”

2. Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018 in sub-rule (1), in second proviso to clause (b),for the words activities included in Schedule VII the following words shall be subtituted namely:- “areas or subjects specified in Schedule VII”
3. Omitted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020. Dated 24.08.2020
4. Omitted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. Dated 22.01.2020 Amendment effective date 22nd January 2021

Original Content-
Original Omitted Content:-6. CSR Policy

(1) The CSR Policy of the company shall, inter-alia, include the following namely :-

(a) a list of CSR projects or programs which a company plans to undertake 1[areas or subjects specified in] of the Schedule VII of the Act, specifying modalities of execution of such project or programs and implementation schedules for the same; and

(b) monitoring process of such projects or programs:

3[Provided that the CSR activities does not include the activities undertaken in pursuance of normal course of business of a company.]

Provided 3[further] that the Board of Directors shall ensure that activities included by a company in its Corporate Social Responsibility Policy are related to the 2[areas or subjects specified in Schedule VII] of the Act.

(2) The CSR Policy of the company shall specify that the surplus arising out of the CSR projects or programs or activities shall not form part of the business profit of a company.]

Amendment

1.Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018
in sub-rule (1), in clause (a), for the words
falling within the purview of
the following words shall be subtituted namely:-
“areas or subjects specified in”

2. Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018
   in sub-rule (1), in second proviso to clause (b),for the words
   activities included in Schedule VII
   the following words shall be subtituted namely:-

“areas or subjects specified in Schedule VII”

3. Omitted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020. Dated 24.08.2020

7. CSR Expenditure

2[7. CSR Expenditure. – (1) The board shall ensure that the administrative overheads shall not exceed five percent of total CSR expenditure of the company for the financial year.

(2) Any surplus arising out of the CSR activities shall not form part of the business profit of a company and shall be ploughed back into the same project or shall be transferred to the Unspent CSR Account and spent in pursuance of CSR policy and annual action plan of the company or transfer such surplus amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year.

(3) Where a company spends an amount in excess of requirement provided under sub-section (5) of section 135 , such excess amount may be set off against the requirement to spend under sub-section (5) of section 135 up to immediate succeeding three financial years subject to the conditions that –

(i) the excess amount available for set off shall not include the surplus arising out of the CSR activities, if any, in pursuance of sub-rule (2) of this rule.

(ii) the Board of the company shall pass a resolution to that effect.

(4) The CSR amount may be spent by a company for creation or acquisition of a capital asset, which shall be held by –

(a) a company established under section 8 of the Act, or a Registered Public Trust or Registered Society, having charitable objects and CSR Registration Number under sub-rule (2) of rule 4; or

(b) beneficiaries of the said CSR project, in the form of self-help groups, collectives, entities; or

(c) a public authority:

Provided that any capital asset created by a company prior to the commencement of the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021, shall within a period of one hundred and eighty days from such commencement comply with the requirement of this rule, which may be extended by a further period of not more than ninety days with the approval of the Board based on reasonable justification.]

Amendment

1.Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

in rule 7, for the words

purview of

the following words shall be substituted namely:

“areas or subjects, specified in”

2.Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 Dated 22.01.2021 Amendment effective from 22nd January 2021

Original Content -:7. CSR Expenditure

CSR expenditure shall include all expenditure including contribution to corpus, or on projects or programs relating to CSR activities approved by the Board on the recommendation of its CSR Committee, but does not include any expenditure on an item not in conformity or not in line with activities which fall within the 1[areas or subjects, specified in] Schedule VII of the Act.

Amendment

1.Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2018 Dated 19.09.2018

in rule 7, for the words

purview of

the following words shall be substituted namely:

“areas or subjects, specified in”

8. CSR Reporting

1[8. CSR Reporting (1)The Board’s Report of a company covered under these rules pertaining to any financial year shall include an annual report on CSR containing particulars specified in Annexure I or Annexure II, as applicable.

(2) In case of a foreign company, the balance sheet filed under clause (b) of sub-section (1) of section 381 of the Act, shall contain an annual report on CSR containing particulars specified in Annexure I or Annexure II, as applicable.

(3) (a) Every company having average CSR obligation of ten crore rupees or more in pursuance of subsection (5) of section 135 of the Act, in the three immediately preceding financial years, shall undertake impact assessment, through an independent agency, of their CSR projects having outlays of one crore rupees or more, and which have been completed not less than one year before undertaking the impact study.

(b) The impact assessment reports shall be placed before the Board and shall be annexed to the annual report on CSR.

(c) A Company undertaking impact assessment may book the expenditure towards Corporate Social Responsibility for that financial year, which shall not exceed 2[two percent] of the total CSR expenditure for that financial year or fifty lakh rupees, 3whichever is higher.]

Notes

1.Circular relating to Extension of Tenure of High Level Committee or Corporate Social Responsibility 2018 dated 8th March 2019

Amendment

1. Substituted by The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 Dated 22.01.2021 Amendment effective from 22nd January 2021

for rule 8:-

“8. CSR Reporting

(1) The Board’s Report of a company covered under these rules pertaining to a financial year commencing on or after the 1st day of April, 2014 shall include an annual report on CSR containing particulars specified in Annexure.

(2) In case of a foreign company, the balance sheet filed under sub-clause (b) of sub-section (1) of section 381 shall contain an Annexure regarding report on CSR.”

The following rule shall be substituted, namely:&#X@013;

“8. CSR Reporting .- (1) The Board’s Report of a company covered under these rules pertaining to any financial year shall include an annual report on CSR containing particulars specified in Annexure I or Annexure II, as applicable.

(2) In case of a foreign company, the balance sheet filed under clause (b) of sub-section (1) of section 381 of the Act, shall contain an annual report on CSR containing particulars specified in Annexure I or Annexure II, as applicable.

(3) (a) Every company having average CSR obligation of ten crore rupees or more in pursuance of subsection (5) of section 135 of the Act, in the three immediately preceding financial years, shall undertake impact assessment, through an independent agency, of their CSR projects having outlays of one crore rupees or more, and which have been completed not less than one year before undertaking the impact study.

(b) The impact assessment reports shall be placed before the Board and shall be annexed to the annual report on CSR.

(c) A Company undertaking impact assessment may book the expenditure towards Corporate Social Responsibility for that financial year, which shall not exceed five percent of the total CSR expenditure for that financial year or fifty lakh rupees, whichever is less. ”.

2. Substituted by Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022

Original Content:
five percent

3. Substituted by Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022

Original Content:
whichever is less

9. Display of CSR activities on its website

“9. Display of CSR Activities on its Website

The Board of Directors of the company shall, after taking into account the recommendations of CSR Committee, approve the CSR Policy for the company and disclose contents of such policy in its report and the same shall be displayed on the company’s website, if any, as per the particulars specified in the Annexure.”

The following rules shall be substituted, namely:–

“9. Display of CSR activities on its website.– The Board of Directors of the Company shall mandatorily disclose the composition of the CSR Committee, and CSR Policy and Projects approved by the Board on their website, if any, for public access.

10. Transfer of unspent CSR amount.– Until a fund is specified in Schedule VII for the purposes of subsection (5) and(6) of section 135 of the Act, the unspent CSR amount, if any, shall be transferred by the company to any fund included in schedule VII of the Act.”

ANNEXURE-I

Format for the Annual Report on CSR Activities to be included in the Board’s Report 1[For Financial Year Commenced Prior To 1st Day of April, 2020]

1. A brief outline of the company’s CSR Policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects or programs.
2. The Composition of the CSR Committee.
3. Average net profit of the company for last three financial years
4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above)
5. Details of CSR spent during the financial year.

(a) Total amount to be spent for the financial year;

(b) Amount unspent, if any;

(c) Manner in which the amount spent during the financial year is detailed below

Give details of implementing agency:

6. In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report.
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.

Amendment

1. Inserted by the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 Dated 22nd Jan 2021 Amendment effective from 22nd January 2021

ANNEXURE-II

FORMAT FOR THE ANNUAL REPORT ON CSR ACTIVITIES TO BE INCLUDED IN THE BOARD’S REPORT FOR FINANCIAL YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2020

1. Brief outline on CSR Policy of the Company:
2. Composition of CSR Committee:

3. Provide the web-link(s) where Composition of CSR Committee, CSR Policy and CSR Projects approved by the board are disclosed on the website of the company.
4. Provide the executive summary along with web-link(s) of Impact Assessment of CSR Projects carried out in pursuance of sub-rule (3) of rule 8, if applicable.
5. (a) Average net profit of the company as per sub-section (5) of section 135.
   (b) Two percent of average net profit of the company as per sub-section (5) of section 135.
   (c) Surplus arising out of the CSR Projects or programmes or activities of the previous financial years.
   (d) Amount required to be set-off for the financial year, if any.
   (e) Total CSR obligation for the financial year [(b)+(c)-(d)].
6. (a) Amount spent on CSR Projects (both Ongoing Project and other than Ongoing Project).
   (b) Amount spent in Administrative overheads.
   (c) Amount spent on Impact Assessment, if applicable.
   (d) Total amount spent for the Financial Year [(a)+(b)+(c)].
   (e) CSR amount spent or unspent for the Financial Year:

(f) Excess amount for set-off, if any:

7. Details of Unspent Corporate Social Responsibility amount for the preceding three Financial Years:

8. Whether any capital assets have been created or acquired through Corporate Social Responsibility amount spent in the Financial Year:

Yes No

If Yes, enter the number of Capital assets created/ acquired

Furnish the details relating to such asset(s) so created or acquired through Corporate Social Responsibility amount spent in the Financial Year:

(All the fields should be captured as appearing in the revenue record, flat no, house no, Municipal Office/Municipal Corporation/ Gram panchayat are to be specified and also the area of the immovable property as well as boundaries)

9. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per sub-section (5) of section 135.

6. In the said rules, in the e-form CSR-1, for serial number 1 and the entries relating thereto, the following serial number shall be substituted, namely:-

“1. *Nature of the ∘ Company established under section 8, exempted under sub-clauses (iv), (v), (vi) or (via) of entity clause (23C) of section 10 and approved under section 80G of the Income Tax Act, 1961.

∘ Company established under section 8, registered under section 12A and approved under section 80G of the Income Tax Act, 1961.

∘ Registered public trust, exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 and approved under section 80G of the Income Tax Act, 1961.

∘ Registered public trust, registered under section 12A and approved under section 80G of the Income Tax Act, 1961.

∘ Registered society, exempted under sub-clauses (iv), (v), (vi) or (via) of clause (23C) of section 10 and approved under section 80G of the Income Tax Act, 1961.

∘ Registered society, registered under section 12A and approved under section 80G of the Income Tax Act, 1961.

∘ Company established under section 8 or registered Trust or registered Society established by the Central Government or State Government.

∘ Entity established under an Act of Parliament or State Legislature.”.

[E-F. No. 05/03/2022-CSR]

INDERDEEP SINGH DHARIWAL, Jt. Secy.

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide notification number G.S.R. 129(E), dated the 27th February, 2014 and subsequently amended by notification numbers G.S.R. 644(E), dated the 12th September, 2014, G.S.R. 43(E), dated the 19th January, 2015, G.S.R. 540(E), dated the 23rd May, 2016, G.S.R. 895(E), dated the 19th September, 2018, G.S.R. 526(E), dated the 24th August, 2020 and G.S.R. 40(E), dated the 22nd January, 2021.

FORM

E-Form