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COMPANIES (CORPORATE SOCIAL RESPONSIBILITY POLICY) RULES, 2014

COMPANIES (CORPORATE SOCIAL RESPONSIBILITY POLICY) RULES, 2014

Companies (Corporate Social Responsibility Policy) Rules, 2014

[Companies (Corporate Social Responsibility Policy) Rules, 2014][1]

[27th February, 2014]

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.

Rule - 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.

Rule - [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.][2]

Rule - 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 (1) 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:

[3][Provided 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.]

(2)     [4][* * *]

Rule - [4. CSR Implementation.

[5][(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 (vi-a) of clause (23-C) of Section 10 or registered under Section 12-A 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 (vi-a) of clause (23-C) of Section 10 or registered under Section 12-A 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 year-wise allocation and shall be competent to make modifications, if any, for smooth implementation of the project within the overall permissible time period.][6]

Rule - 5. CSR Committees.

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

 

(i)       [7][a company] covered under sub-section (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)     [8][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.]

Rule - 6. CSR Policy.

[9][* * *]

Rule - [7. CSR Expenditure.

(1)     The board shall ensure that the administrative overheads shall not exceed five per cent 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.][10]

Rule - [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 sub-section (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 [11][two per cent] of the total CSR expenditure for that financial year or fifty lakh rupees, [12][whichever is higher].[13]]

Rule - [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][14].

Rule - 10. Transfer of unspent CSR amount.

Until a fund is specified in Schedule VII for the purposes of sub-sections (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.]

[15][ANNEXURE I]

Format for the Annual Report on CSR Activities to be included in the Board's Repor[16] [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.

 

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Sl. No.

CSR project or activity identified

Sector in which the project is covered

Projects or programs (1) Local area or other

(2) Specify the State and district where projects or programs was undertaken

Amount outlay (budget) project or programs wise

Amount spent on the projects or programs sub-heads: (1) Direct expenditure on projects or programs.

(2) Overheads:

Cumulative expenditure upto to the reporting period

Amount spent: Direct or through implemen-ting agency

1

2

3

Total

(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.

Sd

Sd

Sd

(Chief Executive Officer or Managing Director or Director)

(Chairman CSR Committee)

(Person specified under clause (d) of sub-section (1) of Section 380 of the Act)

(wherever applicable)

[17][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:

 

Sl. No.

Name of Director

Designation/ Nature of Directorship

Number of meetings of CSR Committee held during the year

Number of meetings of CSR Committee attended during the Year

 

 

 

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 per cent 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:

 

Total Amount Spent for the Financial Year. (in Rs.)

Amount Unspent (in Rs.)

Total Amount transferred to Unspent CSR Account as per sub-section (6) of Section 135.

Amount transferred to any fund specified under Schedule VII as per second proviso to sub-section (5) of Section 135.

Amount

Date of transfer

Name of the Fund

Amount

Date of transfer

 

 

 

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

 

Sl. No.

Particular

Amount (in Rs.)

(1)

(2)

(3)

(i)

Two per cent of average net profit of the company as per sub-section (5) of Section 135

(ii)

Total amount spent for the Financial Year

(iii)

Excess amount spent for the Financial Year [(ii)-(i)]

(iv)

Surplus arising out of the CSR projects or programmes or activities of the previous Financial Years, if any

(v)

Amount available for set off in succeeding Financial Years [(iii)-(iv)]

 

7.

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

 

1

2

3

4

5

6

7

8

Sl. No.

Preceding Financial Year(s)

Amount transfer-rred to Unspent CSR Account under sub- section (6) of Section 135 (in Rs.)

Balance Amount in Unspent CSR Account under sub-section (6) of Section 135 (in Rs.)

Amount Spent in the Finan-cial Year (in Rs)

Amount transferred to a Fund as specified under Schedule VII as per second proviso to sub-section (5) of Section 135, if any

Amount remain-ing to be spent in succeed-ing Finan-cial Years (in Rs)

Defici-ency, if any

Amount (in Rs)

Date of Transfer

1

FY-1

2

FY-2

3

FY-3

 

 

8.

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

Ο Yes Ο 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:

Sl. No.

Short particulars of the property or asset(s) [including complete address and location of the property]

Pincode of the property or asset(s)

Date of creation

Amount of CSR amount spent

Details of entity/ Authority/ beneficiary of the registered owner

(1)

(2)

(3)

(4)

(5)

(6)

 

CSR Registration Number, if applicable

Name

Registered address

 

(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.

 

Sd/-

(Chief Executive Officer or Managing Director or Director).

Sd/-

(Chairman CSR Committee).

Sd/-

[Person specified under clause (d) of sub-section (1) of Section 380]

(Wherever applicable).]

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 1st day of April, 2020

(1)     Brief outline on CSR Policy of the Company.

(2)     Composition of CSR Committee:

Sl. No.

Name of Director

Designation/Nature of Directorship

Number of meetings of CSR Committee held during the year

Number of meetings of CSR Committee attended during the year

 

(3)      Provide the web-link 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 details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of Rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable (attach the report).

(5)     Details of the amount available for set off in pursuance of sub-rule (3) of Rule 7 of the Companies (Corporate Social responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any.

Sl. No.

Financial Year

Amount available for set-off from preceding financial years (in Rs)

Amount required to be setoff for the financial year, if any (in Rs)

1

2

3

TOTAL

(6)     Average net profit of the company as per Section 135(5).

(7)     (a) Two per cent of average net profit of the company as per Section 135(5)

(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years.

(c) Amount required to be set off for the financial year, if any

(d) Total CSR obligation for the financial year (7a+7b-7c).

(8)     (a) CSR amount spent or unspent for the financial year:

Total Amount Spent for the Financial Year. (in Rs)

Amount Unspent (in Rs)

Total Amount transferred to Unspent CSR Account as per Section 135(6)

Amount transferred to any fund specified under Schedule VII as per second proviso to Section 135(5)

Amount

Date of transfer

Name of the Fund

Amount

Date of transfer

 

 (b) Details of CSR amount spent against ongoing projects for the financial year:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

(10)

(11)

Sl. No.

Name of the Project

Item from the list of activities in Schedule VII to the Act

Local area (Yes/No)

Location of the project

Project duration

Amount allocated for the project (in Rs)

Amount spent in the current financial Year (in Rs)

Amount transferred to Unspent CSR Account for the project as per Section 135(6) (in Rs)

Mode of Implementation Direct (Yes/No)

Mode of Implementation - Through Implementing Agency

State

District

Name

CSR Registration number

1.

2.

3.

Total

 (c) Details of CSR amount spent against other than ongoing projects for the financial year:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Sl. No.

Name of the Project

Item from the list of activities in Schedule VII to the Act

Local area (Yes/No)

Location of the project

Amount spent for the project (in Rs)

Mode of implementation - Direct (Yes/No)

Mode of implementation - Through implementing agency

State

District

Name

CSR registration number

1.

2.

3.

Total

(d) Amount spent in Administrative Overheads

(e) Amount spent on Impact Assessment, if applicable

(f) Total amount spent for the Financial Year (8b+8c+8d+8e)

(g) Excess amount for set off, if any

Sl. No.

Particular

Amount (in Rs)

(i)

Two per cent of average net profit of the company as per Section 135(5)

(ii)

Total amount spent for the Financial Year

(iii)

Excess amount spent for the financial year [(ii)-(i)]

(iv)

Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any

(v)

Amount available for set off in succeeding financial years [(iii)-(iv)]

9.(a) Details of Unspent CSR amount for the preceding three financial years:

Sl. No.

Preceding Financial Year

Amount transferred to Unspent CSR Account under Section 135 (6) (in Rs)

Amount spent in the reporting Financial Year (in Rs)

Amount transferred to any fund specified under Schedule VII as per Section 135(6), if any

Amount remaining to be spent in succeeding financial years. (in Rs)

Name of the Fund

Amount (in Rs)

Date of transfer

1.

2.

Total

 (b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s):

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

(9)

Sl. No.

Project ID

Name of the Project

Financial Year in which the project was commenced

Project duration

Total amount allocated for the project (in Rs)

Amount spent on the project in the reporting Financial Year (in Rs)

Cumulative amount spent at the end of reporting Financial Year. (in Rs)

Status of the project - Completed /Ongoing

1.

2.

Total

 10.  In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent in the financial year (asset-wise details).

(a)      Date of creation or acquisition of the capital asset(s).

(b)      Amount of CSR spent for creation or acquisition of capital asset.

(c)      Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address, etc.

(d)      Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset).

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

Sd/- (Chief Executive Officer or Managing Director or Director)

Sd/- (Chairman CSR Committee)

Sd/- [Person specified under clause (d) of sub-section (1) of Section 380 of the Act] (Wherever applicable).]”

 



[1] Ministry of Corporate Affairs, Noti. No. G.S.R. 129(E), dated February 27, 2014, published in the Gazette of India, Extra., Part II, Section 3(i), dated 28th February, 2014, pp. 6-9, No. 95.

[2] Subs. by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021).

[3] Ins. by G.S.R. 715(E), dated 20-9-2022 (w.e.f. 20-9-2022).

[4] Omitted by G.S.R. 715(E), dated 20-9-2022 (w.e.f. 20-9-2022). Prior to omission it read as:

“(2) Every company which ceases to be a company covered under sub-section (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 sub-sections (2) to (6) of the said section, till such time it meets the criteria specified in sub-section (1) of Section 135.”

[5] Subs. by G.S.R. 715(E), dated 20-9-2022 (w.e.f. 20-9-2022). Prior to substitution it read as:

“(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 Sections 12-A 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 Sections 12-A and 80-G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.”

[6] Subs. by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021). Prior to substitution it read as:

“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) [* * *].

(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

(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 including expenditure on administrative overheads, shall not exceed five per cent 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.”

[7] Subs. for “an unlisted public company or a private company” by G.S.R. 895(E), dated 19-9-2018 (w.e.f. 19-9-2018).

[8] Subs. by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021). Prior to substitution it read as:

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

[9] Omitted by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021). Prior to omission it read as:

“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 areas or subjects specified in 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:

Provided that the Board of Directors shall ensure that activities included by a company in its Corporate Social Responsibility Policy are related to the 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.”

[10] Subs. by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021). Prior to substitution it read as:

“7. CSR Expenditure.—CSR expenditure shall include all expenditure including contribution to corpus for 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 areas or subjects, specified in Schedule VII of the Act.”

[11] Subs. for “five per cent” by G.S.R. 715(E), dated 20-9-2022 (w.e.f. 20-9-2022).

[12] Subs. for “whichever is less” by G.S.R. 715(E), dated 20-9-2022 (w.e.f. 20-9-2022).

[13] Subs. by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021). Prior to substitution it read as:

“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.”

[14] Subs. for Rule 9 by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021). Prior to substitution it read as:

“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.”

[15] Renumbered by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021).

[16] Ins. by G.S.R. 40(E), dated 22-1-2021 (w.e.f. 22-1-2021).

[17] Subs. by G.S.R. 715(E), dated 20-9-2022 (w.e.f. 20-9-2022). Prior to substitution it read as: