In response to the Ministry of Corporate Affairs (MCA) initiating notices regarding CSR-2 form filing compliance for the financial year 2022-23, it's imperative for companies to understand the updated compliance requirements, the legal framework governing these obligations, and the consequences of non-compliance. Here's a comprehensive overview:
CSR-2 Compliance for FY 2022-23
The MCA has underscored the necessity for eligible companies to file e-form CSR-2 by the 31st of March, 2024, for the financial year 2022-23. This mandate originates from the desire to enhance transparency and accountability in how corporate entities undertake their CSR activities.
Legal Framework
Rule 12 (1B) of the Companies (Accounts) Rules, 2014: This rule necessitates every company that meets specific criteria to file the e-form CSR-2, detailing their CSR activities and expenditures for the financial year 2022-23.
Applicability: The rule applies to companies with:
- A net worth of Rs. 500 crore or more,
- A turnover of Rs. 1000 crore or more, or
- A net profit of Rs. 5 crore or more.
Compliance Requirements
Annual CSR Report: Companies must prepare an annual report detailing their CSR activities, approved by their CSR Committee.
E-Form CSR-2 Filing: After ensuring compliance with Form AOC-4 filings, companies must submit e-form CSR-2 via the MCA portal, documenting their CSR committee, CSR policy, project details, expenditures, and unspent amounts.
Deadline: The critical deadline for submission is by 31st March 2024 for the FY 2022-23.
Consequences of Non-Compliance
Should companies fail to file the required e-form CSR-2 within the stipulated timeframe, they may face penal actions as outlined by the MCA. While the specific penalties for non-compliance with CSR-2 filing have not been explicitly detailed in the notice, general penalties under Section 450 of the Companies Act, 2013, could apply. This includes a penalty of ten thousand rupees for the company and, in cases of continued non-compliance, an additional one thousand rupees for each day of delay, capped at two lakh rupees for companies and fifty thousand rupees for officers in default.
Overview Table
| Aspect | Detail |
|---|---|
| Legal Basis | Rule 12 (1B) of Companies (Accounts) Rules, 2014 |
| Eligibility Criteria | Net worth: ₹500cr+; Turnover: ₹1000cr+; Net Profit: ₹5cr+ |
| Key Requirement | Filing of e-form CSR-2 detailing CSR activities and expenditures |
| Deadline for FY 2022-23 | 31st March 2024 |
| Penalty for Non-Compliance | Base penalty of ₹10,000 with additional ₹1,000 per day of delay, up to ₹2 lakh for companies and ₹50,000 for officers |
Conclusion
The MCA's initiative to enforce the filing of e-form CSR-2 for the financial year 2022-23 serves as a critical reminder of the importance of CSR activities in today's corporate environment. It reflects the government's commitment to ensuring that corporate entities actively contribute to social welfare and environmental sustainability. To avoid potential penalties and to uphold their social responsibility, companies meeting the applicability criteria must adhere to the filing requirements within the specified timeframe. This move not only ensures compliance but also encourages a culture of transparency and accountability in corporate India's approach to CSR.
