Five Points Brief Summary of CSR Rules under Companies Act 2013

1. A committee must be constituted for CSR program by a company which during any financial year falls under one of the below categories.
a. A Net Worth of Rs. 500 crores.
b. A turnover of Rs. 1000 crores
c. A profit of Rs. 5 crores.

2. The Board’s report shall disclose the composition of the Corporate Social Responsibility Committee.

3. The Corporate Social Responsibility Committee must

(a) formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the company  (b) recommend the amount of expenditure to be incurred on the activities referred to in point (a); and
(c) monitor the Corporate Social Responsibility Policy of the company from time to time.

4. The Board of every company must

(a) after considering the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and place it on the company’s website, if any, in such manner as may be prescribed; and
(b) ensure that the activities as are included in Corporate Social Responsibility Policy of the company are undertaken by the company.

5. The Board of every company shall ensure that the company spends, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy:

a. Provided that the company shall give preference to the local area and areas around it where it operates, for spending the amount earmarked for Corporate Social Responsibility activities:
b. Provided further that if the company fails to spend such amount, the Board shall, in its report specify the reasons for not spending the amount.

Note: The above info is only for common man understanding.