New Delhi : On September 24, 2024, the Ministry of Corporate Affairs (MCA) issued the Companies (Accounts) Amendment Rules, 2024, under G.S.R. 587(E), amending the Companies (Accounts) Rules, 2014. These amendments aim to clarify and streamline reporting obligations, particularly for corporate social responsibility (CSR) filings for FY 2023-2024.
The CSR-2 form, introduced through the Companies (Account) Amendment Rules, 2022, serves as a reporting tool for companies subject to Section 135(1) of the Companies Act, 2013, which mandates CSR activities. This form requires companies to submit annual reports detailing CSR projects, expenditures, and their outcomes, simplifying the reporting process.
Key Highlights of the Amendment
The new amendment adds a provision to Rule 12(1B) that specifically impacts CSR reporting for FY 2023-2024. Now, companies must file Form CSR-2 by December 31, 2024, following the submission of Form AOC-4, Form AOC-4-NBFC (Ind AS), or Form AOC-4 XBRL, as per the Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015.
Impact of the Amendment
A previous notification set a CSR-2 filing deadline of March 31, 2024, but the recent amendment extends it to December 31, 2024, giving companies more flexibility amid rising CSR compliance expectations. This extension reflects the MCA’s commitment to allowing adequate time for companies to meet CSR obligations as CSR activities increasingly become part of corporate governance.
Guidelines for NGOs Engaged in CSR
The CSR-2 Form facilitates reporting of company collaborations with NGOs, ensuring transparency in CSR fund utilization. NGOs, key partners in executing CSR projects as per the Companies Act, 2013, play a critical role in supporting these corporate social initiatives.
CSR Fund Transfer and Management of Unspent Amounts
For unspent CSR funds, NGOs are required to allocate them to the Schedule VII fund and maintain transparency by documenting transfer details, such as the amount, date, and any deficiencies. They must keep financial records updated and inform CSR donors about allocations, particularly those that support projects spanning up to three years. This includes preparing reports on fund utilization, categorized as ongoing or new projects.
CSR Compliance and Reporting
Impact assessments are required for large projects (over ₹1 crore) by an independent agency under Rule 8(3). NGOs working on these projects must cooperate fully, providing access to sites and relevant documentation. NGOs also need to register as implementing agencies with an active CSR number to qualify as valid CSR partners. Certification through 80G, 12A, and other relevant registrations is essential for eligibility.
CSR Spending on Ongoing Projects
NGOs should closely monitor and document the CSR funds spent on ongoing projects, particularly those funded from unspent CSR allocations from prior years. Detailed records should include information on the CSR amount, project ID, name, fiscal start date, and the financial details of ongoing projects for accurate reporting and compliance.
