CS Divesh Goyal
SHORT SUMMARY
In this editorial author shall discuss, "Which year figures should be mention in Column 3 of CSR-2, Whether we have to mention figures of FY 2019-20 (i.e. 31.03.2020) or FY 2020-21 (i.e. 31.03.2021)".
Reason of Confusion on this point
- Instruction kit mentioned that, needs to mention figures of FY 2020-21.
- Logic says that, Company should mention figures of FY 2019-20.
Explanation of the Logic is given below in this editorial.
A. Ques: Which year figures should be mentioned in Column 3 of CSR-2
As mentioned above logically as per interpretation of Law, Companies should mention information of FY 2019-20 (i.e. 31.03.2020) in CSR-2 to be filed for FY 2020-21.
Reason for the same
- In column 3 of CSR-2 Company have to mention Details of Networth, Net Profit and Turnover. On the basis of this, form automatically choose the 'Criteria that triggered CSR Applicability on the basis of above three figures'
- Companies are filing CSR-2 for FY 2020-21. To check the applicability on 2020-21, Companies have to check the criteria as per 2019-20 (i.e. 31.03.2020).
Extract of 135(1) mentioned below
Section 135: (1) 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 shall constitute a Corporate Social Responsibility Committee of the Board consisting of three or more Directors, out of which at least one director shall be an independent director.
- If in any case Company cross above mentioned limits in 2019-20 (as per financials of 31.03.2020), but doesn’t cross the 135(1) limits in fy 2020-21 (as per financials of 31.03.2021). Then, if Company will mention information of 2020-21 in column 3 then 'Criteria for trigger shall be shows as Report for Unspent CSR Amount'
Further, in the above example, form will not give the option to mention the information relating to spending of CSR during the year.
However, in the above example, CSR was applicable on Company in FY 2020-21 because of trigger of limits as per 31.03.2020. Due to applicability of CSR in 2020-21, Company is required to file CSR-2 for 2020-21.
EXAMPLE
|
S. No. |
Situation 1 |
Situation 2 |
|
2019-20 (Amount In Cr) |
2020-21 (Amount In Cr) |
|
|
Net Worth |
450 |
400 |
|
Turnover |
950 |
750 |
|
Net Profit |
6 |
4 |
|
CSR Applicability |
Yes, Due to Profit |
No, |
|
Applicability of CSR for Financial Year |
2020-21 |
2021-22 |
|
CSR-2 Applicability |
Yes for 2020-21 |
No for 2021-22 |
|
Due Date |
31.03.2021 |
Not Required |
Ques: How to fill CSR-2 in Above Example?
In CSR-2 Company has to write above mentioned three figures. On the basis of that Column no 3(iv) i.e. Criteria that triggered CSR applicability shall be automatically filed in the form.
Situation 1: If Company mention figure of FY 2019-20
- Applicability shall be check as per figures of 2019-20 (i.e. 31.03.2020)
- On the basis of these figures Column 3(iv) shall mention the reason for applicability i.e. applicable due to Net profit.
Situation 2: If Company mention figure of FY 2020-21
- Applicability shall be check as per figures of 2020-21 (i.e. 31.03.2021)
- On the basis of these figures Column 3(iv) shall mention the reason for applicability i.e. not applicable “file for any unspent amount of previous years”
CONCLUSION
However, Instruction kit is stated about to mention figures of FY 2020-21 in Colum 3 of CSR-2. One can opine that, on the basis of above-mentioned examples, practically figures of 2019-20 should be enter at column 3 of CSR-2. Only figures of 2019-20 shall give the perfect picture of applicability of CSR.
CAclubindia
