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Viral Shah   23 April 2024

CSR recieving NGOs

I have a registered CSR fund, I am regular recieving fund from various companies under CSR fund.
so, do I have to upload some CSR utilisation or annual FS on MCA portal annually?
Like any annual compliances for CSR Trust or NGOs?


 3 Replies

T. Kalaiselvan, Advocate (Advocate)     23 April 2024

Corporate Social Responsibility (CSR) is a term that refers to a company’s efforts to be socially responsible by taking actions that benefit society. One way that companies can do this is through CSR funds.

In section 135 as stated previously, there are several focus areas notified as to where you can spend your CSR fund. Obviously, you can let an NGO take care of it and do some good in your name.

Any unspent CSR fund of a financial year will be absorbed by the Prime Minister’s Relief Fund.

Aryan Tripathi   23 April 2024

Yes, if you have a registered CSR (Corporate Social Responsibility) fund, you are subject to certain annual compliance requirements under the Indian Companies Act, 2013. These requirements include:

  1. CSR Utilization Report: You are required to prepare and submit a CSR Utilization Report, detailing how the CSR funds were utilized during the financial year. This report typically includes information on the projects undertaken, amount spent on each project, and the impact of these projects.

  2. Annual Financial Statements (FS): You need to prepare and submit annual financial statements, which include the balance sheet, profit and loss account, and other financial statements, as per the provisions of the Companies Act, 2013.  Both the CSR Utilization Report and the Annual Financial Statements need to be uploaded to the Ministry of Corporate Affairs (MCA) portal annually.

  3. NGO Compliance: If your CSR fund is managed by an NGO (Non-Governmental Organization) or a Trust, there may be additional compliance requirements specific to NGOs or Trusts under the relevant laws and regulations.

It's essential to ensure timely compliance with these requirements to avoid penalties and maintain transparency in the utilization of CSR funds. Additionally, it's advisable to consult with a legal or financial advisor  to ensure full compliance with all applicable regulations.

Sankalp Tiwari   23 April 2024

In accordance with the provisions of the Companies Act of 2013, the Ministry of Corporate Affairs (MCA) is responsible for ensuring that enterprises that have registered Corporate Social Responsibility (CSR) funds comply with particular standards on an annual basis. According to this piece of legislation, businesses that meet specific financial levels are required to devote a percentage of their revenues to corporate social responsibility (CSR) initiatives and to produce annual reports that outline their CSR programs.

Because of the large contributions to corporate social responsibility (CSR) that they get from a variety of organizations, including CSR funds and non-governmental organizations (NGOs), businesses are able to claim CSR expenses. Nevertheless, it is of the utmost importance to emphasize that contributors are required to comply with severe reporting rules; however, the ultimate obligation for corporate social responsibility compliance lies with the corporations that contribute.

The maintenance of meticulous records of the utilization of CSR funds, including activities carried out and the results of such activities, is of the utmost importance. In order to maintain compliance, it is necessary to comply to the principles for corporate social responsibility (CSR) as well as any directions issued by the Ministry of Justice (MCA).

In addition, organizations that are recognized by relevant legislation, such as the Trusts Act or the Societies Registration Act, may be subject to annual reporting requirements that are unique to the category in which they fall. It is possible that this will require the submission of financial statements and other pertinent data to regulatory organizations.

For the purpose of ensuring that CSR requirements are fulfilled and satisfying annual reporting duties, it is vital to stay current on the regulations that are being issued by the MCA and any other relevant agencies. In the event that compliance is not met, there may be penalties or other unfavorable repercussions.

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