Explain the provisions of Rule 7 of the CSR Rules, 2014, under the Companies Act, 2013, concerning : (i) the CSR expenditure, (ii) the ceiling on administrative overheads, (iii) the treatment of surplus arising from CSR

(i) CSR Expenditure The Board of every eligible company U/s 135 (5) of the Companies Act, 2013 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 or where the company has not completed the period of three financial years since its incorporation, during such immediately preceding financial years in pursuance of its Corporate Social Responsibility Policy, this amount will be CSR expenditure. 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. (ii) Administrative Overheads As per rule 7(1) of the Companies (Corporate Social Responsibility) Rules, 2014-The board shall ensure that the administrative overheads shall not exceed 5% of total CSR expenditure of the company for the financial year. (iii) Surplus arising out of the CSR Activities As per rule 7(2) of the Companies (Corporate Social Responsibility) Rules, 2014, any surplus arising out of the CSR activities shall not form part of the business profit of a company and shall be ploughed back into the same project or shall be transferred to the Unspent CSR Account and spent in pursuance of CSR policy and annual action plan of the company or transfer such surplus amount to a Fund specified in Schedule VII, within a period of six months of the expiry of the financial year. (iv) Excess CSR spends may be set off As per rule 7(3) of the Companies (Corporate Social Responsibility) Rules, 2014-Where a Company spent on CSR in excess of the requirement (i.e. 2%), such excess amount may be set-off against the requirement of the CSR Spending u/s 135(5) upto the immediate succeeding 3 financial years subject to the conditions that: The excess amount available for set off shall not include the surplus arising out of the CSR activities, if any, in pursuance of sub-rule (2) of this rule; The Board of the company shall pass a resolution to that effect. (v) Acquisition of Capital Assets As per rule 7(4) of the Companies (Corporate Social Responsibility) Rules, 2014-The CSR amount may be spent by a company for creation or acquisition of a capital asset, which shall be held by Section 8 Company, or a Registered Public Trust or Registered Society, having charitable objects and CSR Registration Number; beneficiaries of the said CSR project, in the form of self-help groups. collectives, entities; a public authority.