Companies CSR policy amendment rules 2022

Provisions relating to :

Corporate social responsibility governed by Companies Corporate Social Responsibility rules 2014.

New Rule:

Companies (CSR policy) amendment rules 2022.

Notification details:

In exercise of powers conferred under section 135 and sub-section (1) and (2) of Section 469 of Companies Act 2013, the central government (MCA) has issued rules amending erstwhile CSR rules 2014,vide its notification dtd 20.09.2022 and has made following amendments.

Amendments have been made in the following areas:

1. Constitution of committee:

Previously, Constitution of CSR committee was mandatory for companies in which the amount to be spent for CSR exceeds Rs 50 Lakhs. But as per the amended provision, constitution of CSR committee is mandatory for company that has any amount left in its unspent CSR account.

2. Continuous applicability of CSR:

As per earlier provisions, CSR provisions cease to be applicable on a company, when turnover criteria specified In sec 135 (1) is not met for 3 consecutive preceding financial years. This provision is now dispended with. Once CSR provisions become applicable for a company, it will continue to be applicable.

3. CSR Implementation agencies:

The amendment has the impact of widening the category of entities that can be appointed as implementation agency: public trust or society exempt under Sec 10, clause 23C, sub clause iv, v, vi, via are now additionally authorized apart from those registered under S.12A and proved under 80G. (established track record of at least 3 yrs in undertaking CSR activity)

4. Booking of Impact assessment reports expense in books:

Reduction in the Limit wrt expenditure on impact assessment reports, booked In accounts: Earlier it was 5% of total CSR expenditure for the FY or Rs. 50L whichever is less. Now, it is reduced to 2% of CSR expenditure or Rs.50 L whichever is higher.

5. Reporting format:

Change in the reporting format relating to CSR disclosures, in annual report.