The Government of India has mandated Corporates to furnish a comprehensive report on its corporate social responsibility (CSR) activities.
What is new mandate?
- According to the Ministry of Corporate Affairs (MCA), the CSR2 form should be submitted to the Registrar of Companies for the preceding financial year (2020-21) and onwards.
- For the information related to FY2021, the CSR2 has to be submitted by the end of March 2022.
- Form CSR2, amongst other things, requires certain companies to report on matters such as the constitution of the CSR committee, its meetings, whether or not the company has disclosed on its website details about its CSR committee, CSR policy and approved CSR projects.
Objective behind new move
- The new move is expected to give the government a comprehensive picture of the CSR funds spent and activities carried out.
- India Inc’s (1,619 companies) CSR spend for FY2021-22 fell sharply to Rs 8,828.11 crore, much lower than the cumulative spends of Rs 20,150.27 crore (25,099 companies) in FY19-20 and Rs 24,688.66 crore (22,531 companies) in FY2020-21.
What is corporate social responsibility (CSR)?
- The Companies Act 2013 requires companies with a net worth of Rs 500 crore of more, or turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more during the immediately preceding three years to spend 2 per cent of their average net profit on CSR activities.
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