Analysis of Companies (CSR Policy) Amendment Rules, 2021
CSR Amendment Rules 2021:
“Legitimate profit earning cannot be devoid of social responsibility, and that companies cannot get away without meeting corporate social responsibility requirements.”
With the Corporate Social Responsibility (CSR), Companies are able to develop their own social investment strategies and decide where to invest and implement programs, but the government has recommended particular areas of need, including eradicating hunger and poverty, maternal and child health, promoting gender equality and environmental sustainability etc. Companies should give preference to the local areas where they operate. If a company does not conduct its own Corporate Social Responsibility (CSR), it can give the required amount to the government’s socio-economic welfare programs such as the Prime Minister’s National Relief Fund etc.
When the provision for Corporate Social Responsibility (CSR) was introduced by Companies Act 2013, It was being said by the Government that the provision for Corporate Social Responsibility (CSR) will follow what is globally known as “Comply or Explain (COREX)”, Which means the Companies will not be mandated to spend on Corporate Social Responsibility (CSR) and the Board Report will only give reasons for not spending.
Ministry of Corporate Affairs has amended the Companies (Corporate Social Responsibility) Rules, 2021 with effect from 22nd January, 2021. Significant changes have been made to amend the Companies (Corporate Social Responsibility Policy) Rules, 2014.
The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 has amended the Rules majorly with respect to following facets;
Rule 2 : Definitions
Rule 4: CSR Implementation
Rule 5: CSR Committees
Rule 7: CSR Expenditure
Rule 8: CSR Reporting
Rule 9: Website Disclosure
Rule 10: Transfer of unspent CSR