The Ministry of Corporate Affairs (MCA) vide its notification dated 11th February, 2022 has notified the Companies (Accounts) Amendment Rules, 2022 with effect from 12th February 2022. Accordingly, MCA has introduced a new form – Form CSR-2 (Report on Corporate Social Responsibility) which is required to be filed annually by those entities that fall under the ambit of Section 135 of the Companies Act, 2013, i.e., the companies which are required to comply with the provisions of Corporate Social Responsibility (CSR).
Key Outline
- Companies which fall within the provisions of CSR are required to submit an annual report online vide the form CSR-2.
- This reporting shall be applicable for the financial year (FY) 2020-21 onwards.
- For the FY 2020-21, this form is to be filed separately, right after filing form AOC-4, or AOC-4 XBRL, or AOC-4 NBFC (Ind AS) as the case may be, on or before 31 March 2022.
- For the succeeding financial years, this reporting shall be made as an addendum to Form AOC-4 or AOC-4 XBRL, or AOC-4 NBFC (Ind AS).
Key Disclosures in Form CSR-2
CSR-2 is a comprehensive form seeking all the details and information as required to be disclosed by the Companies (CSR) (Amendment) Rules, 2021. Followings are the vital disclosures:
- All the details of the CSR policy and CSR initiatives under taken by the company.
- Particulars regarding set-off amount, spent and unspent CSR amount, reasons for unspent CSR amount, details of transfer of unspent CSR amount, etc.
- Particulars of impact assessment to be furnishes, as applicable.
- Details of the amount spent as administrative overheads.
- Details of capital assets, if any, created or acquired through the CSR spent.
The Government observed that the CSR funds were not being channelized in their true spirit by many companies and the CSR provisions were being exploited. Hence, the Government refashioned the CSR concept and now CSR has evolved from a voluntary and public-spirited concept to a mandatory exercise for staying compliant. Introduction of the form CSR-2 is an essential step in this direction and the key intent of lawmakers appears to be that of generating an extensive database of CSR activities being carried out by the Indian companies, identify the sources and NGOs receiving funds and penalizing those who are abusing CSR provisions. This would be an effective tool and would help the authorities to integrate, analyse and investigate the CSR data so that improved and effective policies can be introduced in future.
