
 Union of India - Act
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 The Companies (Corporate Social Responsibility Policy) Rules, 2014
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 UNION OF INDIA
   
 India
 
 The Companies (Corporate Social Responsibility Policy) Rules, 2014
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 Rule THE-COMPANIES-CORPORATE-SOCIAL-RESPONSIBILITY-POLICY-RULES-2014 of 2014
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* Published on 27 February 2014
* Commenced on 27 February 2014
 The Companies (Corporate Social Responsibility Policy) Rules, 2014
 
 Published vide Notification No. G.S.R. 129(E) , dated 27th February, 2014
 
 Last Updated 24th September, 2018
 
 Government of India
 
 Ministry of Corporate Affairs
 
 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.
(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 [areas or subjects]
 
 [Inserted by Notification No. G.S.R. 895(E) , dated 19.9.2018 (w.e.f 27.2.2014).]
 
 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 [include activities, areas or subjects specified]
 
 [Substituted 'cover subjects enumerated' by Notification No. G.S.R. 895(E) , dated 19.9.2018 (w.e.f 27.2.2014).]
 
 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 [company in areas or subjects]
 
 [Substituted 'company as' by Notification No. G.S.R. 895(E) , dated 19.9.2018 (w.e.f 27.2.2014).]
 
 specified in Schedule VII to the Act and the expenditure thereon, excluding activities undertaken in pursuance of normal course of business of a company;
 
(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 of 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.
 
### 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.
 
(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-section (2) to (5) of the said section,
 
 till such time it meets the criteria specified in sub-section (1)  of section 135.
 
### 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), excluding activities undertaken in pursuance of its normal course of business.
 
(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 Utilization of funds of such projects and programs and the monitoring and reporting mechanism]
 
 [Substituted by Notification No. G.S.R. 540(E) , dated 23.5.2016 (w.e.f. 27.2.2014).]
 
(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 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.
 
### 5. CSR Committees.
(1) The companies mentioned in the rule 3 shall constitute CSR Committee as under.-
 
(i) [a company]
 
 [Substituted 'an unlisted public company or a private company' by Notification No. G.S.R. 895(E) , dated 19.9.2018 (w.e.f 27.2.2014).]
 
 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) The CSR Committee shall institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company.
 
### 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]
 
 [Substituted 'falling within the purview of' by Notification No. G.S.R. 895(E) , dated 19.9.2018 (w.e.f 27.2.2014).]
 
 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 CSR activities does not include the activities undertaken in pursuance of normal course of business of a company.
 
 Provided further 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]
 
 [Substituted 'activities included in Schedule VII' by Notification No. G.S.R. 895(E) , dated 19.9.2018 (w.e.f 27.2.2014).]
 
 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.
 
### 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]
 
 [Substituted 'purview of' by Notification No. G.S.R. 895(E) , dated 19.9.2018 (w.e.f 27.2.2014).]
 
 Schedule VII of the Act.
 
### 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.
 
### 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.
 
 Annexure
 
 Format for the Annual Report on CSR Activities to be included in the Board's Report
 
### 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) |
| 
 S.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 programsSub-heads:(1) Direct expenditure on projects or programs.(2) Overheads:
  | 
 Cumulative expenditure upto to the reporting period.
  | 
 Amount spent:Direct or through implementing agency\*
  |
| 
 1
  | 
 | 
 | 
 | 
 | 
 | 
 | 
 |
| 
 2
  | 
 | 
 | 
 | 
 | 
 | 
 | 
 |
| 
 3
  | 
 | 
 | 
 | 
 | 
 | 
 | 
 |
| 
 | 
 TOTAL
  | 
 | 
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 | 
 | 
 |
 \*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.
|  |  |  |
| --- | --- | --- |
| 
 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)
  |

