On 20th September 2022, the Ministry of Corporate Affairs notified amendments to the Corporate Social Responsibility Rules with an objective to keep the impact assessment of companies falling under the ambit of CSR at the forefront.
- Only companies falling under Section 135 (1) of the Companies Act 2013, are now mandated to constitute a CSR Committee. This implies that the applicability of the Section has to be re-examined by every company each year for the continuation of the CSR committee.
- As per the newly amended Rule 8, the expenditure for impact assessment, which can be included in the CSR spending, shall not exceed 2% of total CSR expenditure for the relevant financial year or ₹50 lakh whichever is higher.
- The newly amended Rules now mandate that for the purpose of annual reporting the companies shall provide the executive summary along with the weblinks of impact assessment of CSR projects carried out.
- Further, the Rules also provide for the Companies to carry out their independent impact analysis of their CSR activities. Such impact assessment is mandatory for businesses with Rs 10 crore or more CSR budget and for all projects with an outlay of ₹1 crore or more.