All About Form CSR-1 - Corporate Social Responsibility Policy
Companies Act

All About Form CSR-1

All About Form CSR-1 - Corporate Social Responsibility Policy

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  Posted on December 10, 2021

All About Form CSR-1

As per section 135 of the Companies Act read with Rule 4(1) and 4(2) of the Companies (Corporate Social Responsibility Policy) Rules, every company should mandatorily file Form CSR-1.

Section 135 of Companies Act

Section 135 states that,

(1) Every company having,

– INR 500Crores or more of net worth, or

– INR 100Crores or more turnover, or

– INR 5 Crores or more net profit earned

by the company in the 3 financial years which areimmediately preceding the current relevant financial year, shall constitute a Corporate Social Responsibility Committee (CSR) of the Board consisting of 3 or more directors, and out of this there should be at least 1 director who is an independent director.

And if such a company is not required to appoint independent directors, then it shall have 2 or more directors.

(2) The Board should also report the composition of the CSR Committee, and

(3) CSR committee shall,

– compose or draw up and make the recommendation to the Board, a CSR Policy which shall indicate the activities to be undertaken by the company regarding the same,

– recommend the amount of expenditure to be spend on the activities which will be undertaken by the company pertaining to areas or subjects that are laid down inform Schedule VII of the Companies Act, and

– monitor and analyse the Corporate Social Responsibility Policy of the company from time to time.

(4) The Board shall also,

– take into account the suggestions that are made by the CSR Committee appointed, approve the CSR Policy drafted for the company and disclose contents of such Policy in its report and also place it on the company’s website, in the prescribed manner (if any); and

– ensure that the activities which are included in CSR Policy formulated by the Committee, are undertaken by the company without any failure.

(5) The Board of Directors formed by the company, shall also ensure that the company spends, in every financial year, at least or not less than 2%, of the average net profits of the company made during the 3 immediately preceding financial years or such immediately preceding financial years if 3 years have not passed since its incorporation.

Rule 4(1)

Referring to the Rule 4(1) of the Companies (Corporate Social Responsibility Policy) Rules we can say that,

The Board shall ensure that the CSR activities are the company undertakes the activities by itself or through,

(a) a company which is formed or established under section 8 of the Act, or

a registered public trust or

a registered society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either on a single basis or along with any other company, or

(b) a company which isstated under section 8 of the Companies Act or which is a registered trust or a registered society,that has been established by the Central Government or State Government; or

(c) any entity or a company established under an Act of Parliament or a State legislature; or

(d) a company which has been formed or established under section 8 of the Companies Act, or

a registered public trust or

a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and is also known to be having a proven track record of at least 3 years in undertaking similar activities.

Rule 4(2)

And as per Rule 4(2) of the said Rules, all the above-specified entities shall register themselves with the Central Government by filing the form CSR-1 electronically with the Registrar, with effect from the 01st of April 2021.

But it should also be noted that this rule shall not be applicable to the CSR projects or programs approved prior to the 01st of April 2021.

The Form CSR-1, should be signed and should also be submitted electronically by the entity. This should also be verified on a digital mode by a Chartered Accountant in practice or a Company Secretary in practice or a Cost Accountant in practice and on the submission of the prescribed Form CSR-1 on the portal, the system will generate a unique CSR Registration Number.

Requirements for this Firm

The following can be understood as the requirements which should be complied with by the company for filing this form.

– A valid & registered Digital Signature Certificate (DSC) of the Director or Trustee or CEO or Chairperson or Chief functionary or Authorized Representative of the Entity

– A copy of PAN of Entity

– A copy of the Certificate of Registration of the Entity

– An active Email ID of the Entity for OTP. This option to send OTP for verification will be enabled only after successful Pre-scrutiny of the form.

– An authorization to the person signing the form digitally (i.e., An effective and passed Resolution no. and the date from which it is effective) is also required.

Thus, we can conclude that Form CSR-1 is used by companies that intend to undertake a CSR activity. They shall file the same with the Central Government and the same would only be in effect from the 01st day of April 2021. Any CSR projects or programmed prior to such date i.e., 1st April 2021 shall not comply with the filing of Form CSR-1.

 

 

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