The Centre has now given one more month for Corporate India to furnish a comprehensive report on their corporate social responsibility (CSR) activities for the financial year 2020-21.
As against the earlier specified extended deadline of May 31 this year to file the 11-page form (CSR-2) for this purpose, the Corporate Affairs Ministry has again extended the last date to June 30, sources said.
The filing of the 11 page form is expected to give the government a comprehensive picture of the CSR funds spent and activities carried out by the Corporate India.
This form to be submitted to the Registrar of Companies for the preceding financial year (2020-21) and onwards, the Ministry of Corporate Affairs (MCA) had earlier said. For the information related to FY21, the CSR-2 had to be submitted by the end of March 2022. This was then extended to May 31 and now to June 30.
Meanwhile, the MCA has now said that form CSR2 for the financial year 2021-22 should be filed separately on or before March 31, 2023 after filing Form AOC4 or AOC 4 XBRL or AOC -4 NBFC (Ind AS) as the case may be.
It maybe recalled that the MCA’s move to require India Inc file a comprehensive form on their CSR activity had evoked mixed reaction from the corporates and legal experts with some contending that it would end up increasing the compliance burden.
They contended that some of the disclosures mandated under the CSR-2 are already being disclosed under the main directors’ report forming part of the annual report.
Some legal experts felt the decision to introduce a separate reporting requirement of CSR activities being undertaken by companies to be annexed to the financial statements, appear unnecessary and increases compliance burden, adding to the cost of doing business.
Some corporate observers, however, felt that the information trove on CSR — on the back of CSR-2 — could come in handy for the CSR department in MCA to undertake data mining and analytics so that improved policies could be rolled out on this front.
Form CSR-2, amongst other things, requires certain companies to report on matters such as the constitution of its CSR committee, its meetings, disclosure on its website the details about CSR panel, CSR policy, and approved CSR projects.
Also, the company is required to confirm whether an impact assessment of CSR projects has been carried out in pursuance of the Companies (CSR Policy) Rules, 2014. Under the report, the company is also required to submit a detailed information around its investment in CSR projects and the quantum of funds that has remained unspent.
The Companies Act 2013 requires a corporate with net worth of ₹500 crore or more, or a turnover of ₹1,000 crore or more or a net profit of ₹5 crore or more during the immediately preceding three years to spend 2 per cent of the average net profit on CSR activities.
India Inc’s (1,619 companies) CSR spend for FY21 fell sharply to ₹8,828.11 crore, much lower than the cumulative spends of ₹20,150.27 crore (25,099 companies) in FY19 and ₹24,688.66 crore (22,531 companies in FY20 (Source: Business Line)