Extension of due date for filing form CSR-2

MCA has extended the deadline for submitting Form CSR-2 till May 31, 2022, from the previous deadline of March 31, 2022. Moreover, the MCA mandated the filing of Form CSR-2 for all companies that fall under Section 135(1) and are required to engage in CSR activities under the Companies Act, 2013.

Obligation on Companies

Companies are under obligation for conducting Corporate Social Responsibility as per section 135 of the Companies Act, 2013, as follows:

“(1) Every company with a net worth of Rs 500 crore or more, a turnover of Rs 1000 crore or more, or a net profit of Rs 5 crore or more in any financial year shall form a Corporate Social Responsibility Committee of the Board consisting of three or more directors, one of whom must be an independent director.”

Latest Obligation for companies to file CSR-2

MCA has now added a new obligation for all companies to file Form CSR-2. This takes place to provide information about their CSR projects for the fiscal year 2020-21 until March 31, 2022, as detailed in the following notification:

“The Central Government hereby makes the following rules further to amend the Companies (Accounts) Rules, 2014, in the exercise of the powers conferred by sub-sections (1) and (3) of section 128, sub-section (3) of section 129, section 133, section 134, sub-section (4) of section 135, sub-section (1) of section 136, section 137, and section 138 read with section 469 of the Companies Act, 2013 (18 of2013), namely:-

• The Companies (Accounts) Amendment Rules, 2022 may be referred to as the Companies (Accounts) Amendment Rules, 2022.
• They take effect on the day they are published in the Official Gazette.
• After sub-rule (IA) in rule 12 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as the said rules), the following sub-rule shall be inserted: –

“(1B) For the preceding financial year (2020-2021) and onwards, every company covered by the provisions of sub-section (1) of section 135 shall furnish a report on Corporate Social Responsibility in Form CSR-2 to the Registrar as an addendum to Form AOC-4 or AOC-4 XBRL or AOC-4 NBFC (Ind AS), as the case may be:

Provided, however, that for the preceding fiscal year (2020-2021), Form CSR-2 must be filed separately on or before March 31, 2022, following the filing of Form AOC-4, AOC-4 XBRL, or AOC-4 NBFC (Ind AS), as applicable.”

Information that must be included in the CSR-2 form

The following information must be included in the CSR-2 form:

• It’s  basics information
• SRN on AOC-4, financial information about the company
• Criteria that determine if a CSR is applicable.
• Information about the CSR committee, if one exists.
• Has an impact evaluation of CSR projects been undertaken, and if so, what were the findings?
• Is there any sum available for set-off under Rule 7 of the Companies (CSR Policy) Rules, 2014, sub-rule (3)?
• Has the CSR budget for the current fiscal year been spent? If not, then details of ongoing initiatives will be provided.
• Transfer of Unspent CSR funds for the current fiscal year.
• If the company has failed to spend 2% of its average net earnings as required by section 135 of the Act, explain why.
• Whether any funds from FY 2014-15 to FY 2019-20 have been spent in the current fiscal year.

Endnote

In short, this Form satisfies all reporting requirements. Previously, these were mentioned in the report. And it was expected that this report would be filed alongside the Annual Report with published accounts. The government has now decided to make it an online report, requiring businesses to fill out each field. This form is to be filed as an addendum to AOC-4, Form (for filing Annual Report) of the Company. If Form AOC-4 for the Fiscal Year 2020-21 has already been filed, Form CSR 2 must be filed separately; otherwise, it must be filed as an addendum to Form AOC-4.