CSR, or Corporate Social Responsibility, is a broad term that describes a company's efforts to improve society in any way it can. CSR improves a company's public image by publicising its efforts to make this world a better place, increasing the chances of becoming highly favoured in the eyes of customers and it contributes to a company's brand value by fostering strong customer relationships. When a company participates in a community, it helps it stand out from the competition.
For example, ITC Group, a conglomerate with interests in hotels, FMCG, agriculture, information technology, and packaging, has been focusing on developing sustainable livelihood and environmental protection programmes. Through its CSR activities, the company has been able to provide sustainable livelihood opportunities for six million people.
Their e-Choupal programme, which aims to connect rural farmers via the internet to purchase agricultural products, now includes 40,000 villages and more than four million farmers. Its social and farm forestry programme helps farmers convert unused land into pulpwood plantations. Over 40,000 rural women have found sustainable livelihoods thanks to social empowerment programmes such as microenterprises and loans.
FORM CSR-2:
Companies (Accounts) Amendment Rules, 2022 have been notified by the MCA in a notification dated February 11, 2022, and will take effect on February 11, 2022.
The following shall be inserted after Rule 12 (1A) in the Companies (Accounts) Rules, 2014:
"For the preceding 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 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.”
Companies that fall under the provisions of Section 135 of the Companies Act, 2013, i.e., companies that are required to comply with the provisions of Corporate Social Responsibility, must file the newly introduced form CSR-2 (report on Corporate Social Responsibility).
Documents Required to File CSR-2
- Company’s Net Worth for the Financial year
- Company’s Turnover for the Fiscal year
- Company’s Net profit for the Fiscal year
- Check whether the CSR committee has been included or not
- Number of directors composing the CSR committee
- The number of meetings of the CSR committee conducted in the year
- Directors who attend the meeting their DIN and the number of meetings attended.
- Whether the firm includes a website in which it is disclosed the mentioned details as per that with Rule 9 given link.
- Composition of CSR committee
- CSR Policy
- CSR projects approved by the board
- If the impact assessment of CSR projects is carried out in pursuance of Rule 8(3). If yes then the same is to be revealed in the board report.
- Whether the amount is available for set-off in pursuance of rule 7(3) of Companies (CSR Policy) Rules, 2014
- If the firm has finished the duration of 3 FY since its start if not then give the number of fiscal years completed since its start
- The average net profit of the firm under section 135(5)
- 2% of the average net profit of the firm under section 135(5) surplus arising out of the CSR projects or programs or activities of the former fiscal year of any
- Total CSR obligation for the fiscal year
- On spending CSE amount towards the ongoing projects for the fiscal year, if yes then the amount is given on the ongoing project excluding the enduring project or both
- Data of CSR amount paid against ongoing projects for the FY, number of ongoing projects, project ID, items from the activities list in Schedule VII, name of the project, local area, project location, project duration, Amount spent on each project, mode of implementation (direct or not), mode of implementation through implementing agency
- Paid Amount on administrative overhead
- Spent Amount on Impact Assessment (if applicable)
- Total spending for the Financial Year
- Detail of unspent/ (excess) spent amount for the Financial Year
- The portion eligible for transfer to Unspent CSR Account for the financial year according to section 135(6) (before adjustments)
- The amount that needs to be moved to the fund specified in Schedule VII for the financial year (If the unspent fund for the financial year is more than the unspent for ongoing projects)
- Information of transfer of unspent CSR amount for the FY i.e., amount that needs to be transferred, actually transferred amount, date, shortfall, etc.
- Transfer to the amount determined in Schedule VII in accordance with the second proviso to section 135(5) for the said financial year
- In the case where the company has failed to spend 2% of the average net profit as per section 135(5) then Specify reason(s)
- Whether or not any remaining (unspent) fund of the last three financial years (F.Y. ending after 22nd January 2021) has been disbursed in the financial year?
- Is there any remaining fund that has been spent in the financial year, which was related to the financial year from 2014-15 to 2019-20?
- Is there any capital asset made or acquired via CSR spent in the financial year?
Note: The form is based on the web which is to be furnished for the FY 2020-21 for the upcoming years the form will be furnished as an attachment for AOC-4, AOC-4 (XBRL), AoC-4 (NBFC). SRN of form AOC-4/ AoC-4 XBRL/ AoC-4 NBFC was filed by the company for its standalone financial statements.
Procedure for Online Filing of CSR-2
Download the Instruction Kit for CSR-2 from here
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Buttons
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Particulars
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Pre-Fill
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The Pre-fill button can appear more than once in an eForm. The button appears next to a field that can be automatically filled using the MCA database. Click the button to populate the field.
Note: You are required to be connected to the Internet to use the Pre-fill functionality.
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Save
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Click on Save for saving information entered in the screen.
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Pre scrutiny
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- After checking the eForm, click the Prescrutiny button. System performs some checks and displays errors if any.
- Correct the errors.
- Click the Prescrutiny button again. If there are no errors, a message is displayed “Prescrutiny is successful.”
- The Prescrutiny functionality requires Internet Connectivity.
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Generate Project ID
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- After Prescrutiny is successful, click Generate Project ID button. System generates project ID for each Ongoing Projects mentioned in field 7 in below format FY Sr. No
- If Project ID is generated successfully, message is displayed “Project ID is generated successfully.”
- Check the generated project ID displayed on screen in field 7.
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Submit
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Click on the ‘Submit’ button to proceed for challan generation.
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Processing Type
The form will be processed in STP Mode.
SRN Generation
On successful submission of the web Form CSR-2, SRN will be generated and shown to the user which will be used for future correspondence with MCA.
Email
When an eForm is registered by the authority concerned, an acknowledgement of the same is sent to the user in the form of an email at the end of the day to the email id of the company.
Features
Corporate Social Responsibility is a means by which a company seeks to give back to society and integrate social and environmental concerns into its business operations and interactions with their stakeholders. In accordance with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020, the company can undertake CSR activities either itself or through entities defined under Rule 4 sub-rule (1).
The web-form Addendum to AoC-4 CSR shall be filed as an independent form for FY 20-21 by all the companies that are required to carry out CSR activities as per the relevant rules or are voluntarily carrying out CSR activities
CSR-2 Due Date:
- The fiscal year 2020-21: separately on or before March 31, 2022;
- The fiscal year 2021-22 and later: as an addendum to form AOC-4 (due date of AOC-4) According to that, the introduction of form CSR-2 is a revolutionary change, and the Company must adhere to the amendment with utmost care and diligence.
Compliance Calendar ®