InstaFiling Team
As the financial year comes to an end, apart from other compliances, it is important to ensure proper compliance with the CSR obligations under section 135 of the Companies Act, 2013. The compliance acquires unprecedented importance due to recent amendments which provide for
- Penalty upto one (1) crore on the company and upto 2 lacs on offices involved
- Making the CFO responsible for proper CSR spend
- Specific observation by auditors on CSR compliance in CARO reporting
- Creating a distinction between 'CSR spend' & 'disbursement'
Apart from the above, the defaulting companies are being listed on the government website as a CSR "defaulter".
In light of the above, some of the action points/ concerns that corporates should consider before the year end are
- How much does the company need to spend on CSR and the timeline?
- Whether proper CSR documents and CSR governance structure has been created?
- How to deal with unspent CSR obligation?
- Can the unspent CSR funds be carried forward to the subsequent year?
- How to identify CSR projects and implanting agencies?
- Whether any action required for unspent amount lying with NGO?
- How to ensure that CSR spending is monitored effectively?
- Steps to be considered by CFO to certify spending?
- Whether cancellation of the FCRA license of implementing agency impact the company?
All the above pointers would require careful consideration of the regulations and proper planning so as to avoid any penal action as well as unwarranted observations from the auditors/board.
CAclubindia
