The Companies Act, 2013 (the 2013 Act) became effective from 1 April 2014. Section 135 of the 2013 Act mandates certain class of companies meeting the prescribed threshold to spend at least two per cent of the average net profits of the company on the Corporate Social Responsibility (CSR) activities. Over the years, the CSR regulations in India have evolved leading to stricter compliance.

In this regard, the Ministry of Corporate Affairs (MCA), vide a notification dated 20 September 2022 issued the Companies (CSR Policy) Amendment Rules, 2022 (CSR Policy Amendment Rules). These amendments are effective from the date of their publication in the official gazette i.e., 20 September 2022. Some of the significant amendments issued include:

  • Constitution of a CSR Committee by a company having any amount in its unspent CSR account,
  • Omission of Rule 3(2) of the CSR Policy Rules, 
  • Broadening the class of entities that can be engaged as implementation agencies,
  • Change in the limits of expenses incurred towards impact assessment studies, and
  • Revisions in the format for the Annual Report on CSR activities.

In this issue of the First Notes, we aim to provide an overview of the amendments to the CSR Policy Rules.

To access the text of the MCA notification, please click here.

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