Ministry of Corporate Affairs recently issued Companies
(Accounts) Second Amendment Rules, 2023 w.r.t. CSR (Corporate Social
Responsibility) .
A brief note on CSR (including background and amendments in
last year is mentioned below for your ready reference:-
1. Background
A. Applicability
·
Companies
having a net worth of rupees 500 crore or more; or
·
turnover
of rupees 1,000 crore or more; or
·
net
profit of rupees 5 crore or more in a financial year.
B. Requirement
The concerned companies are required to :
·
constitute
a CSR committee (consisting of at least three directors, including at least one
independent director) and
·
undertake
CSR activities (broad framework for CSR activities, including eradicating
hunger and poverty, promoting education, gender equality, environmental
sustainability, etc.)
C. CSR amount:
The Act requires qualifying
companies to spend at least 2% of their average net profits made during the
three preceding financial years on CSR activities.
D. Reporting:
The company must report its CSR
activities in its annual financial statements, board reports, and on its
website. The CSR report should include details about the CSR policy, projects
undertaken, amount spent, and more.
2. Recent
Developments
2022
MCA vide the
Companies (Accounts) Amendment Rules, 2022 inserted new-sub rule 1A in Rule 12
in Companies (Accounts) Rules, 2014 i.e. a new Form CSR-2 (Report on the
Corporate Social Responsibility).
Rule 12(1B)
states that every class of company which is obligated to constitute a Corporate
Social Responsibility Committee in accordance with the provisions of
sub-section (1) of Section 135 of the Companies Act, 2013, is required to
furnish a report on Corporate Social Responsibility in Form CSR-2 to the
Registrar for year 2020-2021 and onwards as an addendum to Form AOC-4 or
AOC-4 XBRL or AOC-4 NBFC (Ind AS), as are applicable.
2023
Changes
bring through Companies (Accounts) Second Amendment Rules,2023 :
For FY 22-23,
CSR-2 form to be filled separately on or before 31, March 2024 after
filling form AOC-4/AOC-4 NBFC/AOC-4 XBRL.
