Companies (CSR Policy) Amendment Rules, 2021
Corporate Social Responsibility (CSR)
As per the businesses (CSR Policy) Amendment Rules, 2021, Corporate Social Responsibility (CSR) is defined because the activities undertaken by a corporation in pursuance of its statutory obligation laid down in section 135 of the businesses Act following the provisions contained within the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The following activities of the corporate won't be included within the Corporate Social Responsibility (CSR):
Note: If a corporation engaged in research and development activity of the latest vaccine, drugs and medical devices within the normal course of business may undertake research and development activity of the latest vaccine, drugs, and medical devices associated with COVID-19 for financial years 2020-2021, 2021-2022, 2022-2023.
Amendment in Rule 12 — Definition
Definition of Administrative overheads
Administrative overheads mean the expenses incurred by the corporate for ‘general management and administration of Corporate Social Responsibility functions within the company but shall not include the expenses directly incurred for the designing, implementation, monitoring, and evaluation of a specific Corporate Social Responsibility project or program.
Definition of CSR Policy
CSR Policy means a press release containing the approach and direction given by the board of a corporation, taking under consideration the recommendations of its CSR Committee, and includes guiding principles for selection, implementation, and monitoring of activities also because of the formulation of the annual action plan.
Definition of the world organization
International Organization is defined as a corporation notified by the Central Government as a world organization under section 3 of the United Nations (Privileges and Immunities) Act, 1947 (46 of 1947) to which the given provisions apply.
Ongoing Project: Definition
As per definition, Ongoing project = Project already commenced + multi-year project whose duration isn't but one year but not exceeding 3 years
Definition of Public Authority
“Public Authority” means ‘Public Authority as defined in clause (h) of section 2 of the proper to Information Act, 2005.
Definition of CSR Committee
CSR Committee means the company Social Responsibility Committee of the Board mentioned section 135 of the businesses Act
Amendment in Rule 4: CSR Implementation
The board of the corporate will make sure that the CSR activities are undertaken by the corporate itself or through any of the subsequent entity:
1. A company established under section 8 of the Act, or a registered charitable trust or a registered society, registered under section 12A and 80 G of the tax Act, 1961 (43 of 1961), recognized by the business, whichever individually or together with the other business.
2. A company recognized below section 8 of the Act or a listed trust or a listed civilization, recognized by the Central Management or State Administration;
3. Any object recognized below an Act of Assembly or a State government;
4. A company established under section 8 of the Act, or a registered charitable trust or a registered society, registered under section 12A and 80G of the tax Act, 1961, and has a long-time diary of a minimum of three years in undertaking similar activities
Procedure to file the shape CSR-1
Every entity who intends to undertake any CSR activity must register itself with the Central Government by filing the shape CSR-1 electronically with the Registrar, with effect from 01.04.2021.
Form CSR-1 is going to be signed and submitted electronically by the entity and shall be verified digitally by an accountant in practice or a corporation Secretary in practice or a price Accountant in practice.
On the submission of the shape CSR-1 on the MCA portal, a singular CSR license number is going to be generated by the system automatically.
Other Condition for CSR Implementation
A company may engage international organizations for designing, monitoring, and evaluating CSR projects or programs as per its CSR policy also as for the capacity building of their personnel for CSR.
A company can also collaborate with other companies for undertaking projects or programs or CSR activities in such a fashion that the CSR committees of respective companies are during a situation to report separately for the projects and programs.
The Board of a corporation shall satisfy itself that the funds so disbursed are utilized for the needs and within the manner as approved by it and therefore the Chief treasurer or the author for financial management shall certify to the effect.
In case of an ongoing project, the Board of a corporation shall monitor the implementation of the project concerning the approved timelines and year-wise allocation and shall be competent to form modifications, if any, for smooth implementation of the project within the general permissible period.
Amendment in Rule 7: CSR Expenditure
According to the businesses (CSR Policy) Amendment Rules, 2021, the executive overheads shouldn't exceed five percent of the entire CSR expenditure of the corporate for the fiscal year.
If a corporation spends an amount above requirement, such excess amount could also be departed against the need to spend up to immediate succeeding three financial years subject to the subsequent conditions :
Amendment in Rule 8: CSR Reporting
The Board’s Report of a corporation about any fiscal year shall include an annual report on CSR containing particulars as laid out in the Annexure.
In the case of a far-off company, the record shall contain an annual report on CSR.
Every company having an average CSR obligation of 10 Crore or more within the three immediately preceding financial years, shall undertake impact assessment, through an agency, of their CSR projects having outlays of Rs.1 Crore or more, and which are completed not but one year before undertaking the impact study.
The impact assessment reports got to be placed before the Board and shall be annexed to the annual report on CSR
A Company undertaking impact assessment may book the expenditure towards Corporate Social Responsibility for that financial year, which shall not exceed 5% of the entire CSR expenditure for that fiscal year or Rs.50 lakh rupees, whichever is a smaller amount
Amendment in Rule 9: Website Disclosure
The Board of Directors of the corporate got to mandatory disclose the composition of the CSR Committee, and CSR Policy and Projects approved by the Board on their website for public access.
Amendment in Rule 10: Transfer of unspent CSR
The unspent CSR amount is going to be transferred by the corporate to any fund included in schedule VII of the businesses Act.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts that have been made to ensure the accuracy and correctness of the information published, White Code Consulting & Governance shall not be responsible for any errors caused due to human error or otherwise.
