MCA has issued notification on 11th February 2022 called as Companies (Account) Amendment Rules 2022. Ministry has introduced a new form CSR-2 by these new rules. Further, made insertion in Rule 12 of such rules.
One more step towards CSR Reporting, One more amendment, one more Circular
A. Applicability:
This new Rule shall be applicable on all the Companies on which CSR provisions are applicable. In other words, all the Companies falling u/s 135(1) have to follow this new amendment rules.
List of Companies falling u/s 135(1) are as follow:
Every company having
- net worth of rupees five hundred crore or more, or
- turnover of rupees one thousand crore or more or
- a net profit of rupees five crore or more
during the immediately preceding financial year
B. CSR-2 Reporting:
Every company covered under the provisions of sub-section (I) to section 135 shall furnish a report on Corporate Social Responsibility in Form CSR-2 to the Registrar
♦ For FY 2020-21: As a Separate form on or before 31st March 2022.
*It shall be file only after filing of AOC-4.
♦ For FY 2021-22 & onwards: As an addendum to Form AOC-4 or AOC -4 XBRL or AOC -4 NBFC (Ind AS), as the case may be.
Basic information of the Company like:
1. Committee Constitution
2. Networth
3. Profit
4. Details of CSR required to be spent
5. Details of Ongoing Project
6. Details of Meeting of Committee
7. Details of Website Link
8. Details of Unspent Amount: etc
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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
Author Bio
In Form CSR-2, we have to mention SRN of FY 2020-21 and Net worth, turnover & Profit before tax of FY 2019-20 which will automatically shows the criteria of applicability on the basis of figures of immediately preceding FY.
In such case, what will happen to Rule 3(2) which clearly says that “Every company which ceases to be a company covered under subsection (1) of section 135 of the Act for three consecutive financial years shall not be required to —(a) constitute a CSR Committee; and(b) comply with the provisions contained in 1[sub-section (2) to (6)] of the said section, till such time it meets the criteria specified in sub-section (1) of section 135.
For Instance Profit Before Tax for FY 2019-20 is less than 5 crore and all previous years are above 5 crore. Here subsection (1) of section 135 of the Act will still be applicable as per Rule 3(2) because the Profits are not below 5 crore for three consecutive financial years. That means we still have to follow provisions of sec 135 (1) and spend the amount.
But in Form CSR-2 when we mention Net worth, turnover & Profit before tax of FY 2019-20, there will not be any criteria for applicability. The form take details only for unspent of previous year and do not allows option to fill the details of previous three years. Which also means that company is not falling under 135(1) related to applicability and spending. However as per Rule 3(2) the company is still covered under 135(1) because the Profits are not below 5 crore for three consecutive financial years.
Please suggest that for the purpose of Form CSR-2, whether applicability/non-applicability is to be checked only on the basis on 135(1) i.e. only on the basis of immediately preceding financial year figures and we have to ignore rule 3(2). What will happen to Rule 3(2) thereafter?