MCA issues new e-Form to reply to CSR Notices
Ministry of Corporate Affairs (MCA) has issued a new e-Form CFI (CSR) to enable companies to file their reply to any CSR compliance Notice received by the company. Until recently, companies were filing their response physically (in hard copy). This e-Form will now not only eliminate the need to file reply physically, but, it will also centralize all replies and enable MCA to electronically track all responses and take suitable action.
Reason for issuing Notice?
MCA, through Deputy Director and Inspector e-CSPM – CSR has since about a year been issuing notices to various companies under section 206 of the Indian Companies Act 2013 regarding compliance of provisions of Corporate Social Responsibility (CSR) under section 135 read with Section 134(3)(o) of the Act and the Rules made there-under.
Historically, the information sought by MCA in these Notices has included:
- Date when the CSR Committee was constituted;
- CSR Policy of the company along with extracts of resolutions passed by the Board for adopting the same;
- Details of the meetings held by the CSR committee during the relevant financial year and extracts of the minutes of such meetings;
- If prescribed amount of two per cent as per section 135(5) of the Act is not spent, “furnish legally demonstrable specific reasons”;
- Proportion of “administrative overheads” while implementing the total CSR expenditure during each financial year;
- Details of the implementing agencies (trust, society or section 8 company with track record of at least three years of undertaking such activities) engaged by the company with the names and addresses of such implementing agencies;
- Calculation of net profits computed u/s 198 of the Act;
- Average net profits of the company for the three immediately preceding financial years as computed u/s 198 of the Indian Companies Act 2013;
- Details of members of the CSR Committee;
- Name and contact details (current address, email and Director Identification Number) of the Board of the company;
- Details of the projects undertaken by the company as CSR activity as per disclosure under annual return of CSR as provided under Companies (CSR) Rules 2014.
What companies should do if Notice is served?
If a company receives non-compliance notice or call for information on CSR, it must file response through the ‘Reply to call for information on CSR’ Form.
This form is required to be filed by all companies which receive such a notice. As of now there are no filing fees for this form and this form is under ‘Straight through process’ (STP) mode.
- Notices issued by the MCA will have the ‘Call for information’ Number which must be submitted with the form.
- Receipt of notice by the Company with “Call for Information” should be used as a reference.
- After filling in ‘Call for Information’, click the pre-fill button.
- On clicking the button, system will automatically display the CIN, name, registered office address of the company, email address and eligibility for Financial Year.
- This form should be filed with the Digital Signature of Director/Company Secretary/CFO/CEO/Manager.
Recent figures released by Prime Database indicate that there has been a nine per cent rise in the quantum of unspent money set aside by the National Stock Exchange (NSE) listed companies towards CSR, during the fiscal year 2017-18. The unspent component has risen to Rs 1,717 crore as against Rs 1,574 crore in the previous fiscal year.
According to Prime Database, only half of the 1,708 companies listed on NSE have a CSR committee in place despite the CSR law mandating the same.
However, on the positive side, the overall spends by the 1,080 NSE-listed companies which fall under the two per cent mandatory CSR spend category has risen to eleven per cent during fiscal year 2017-18 to Rs 10,030 crore from Rs 9,060 crore in the previous year and in the past four years since the introduction of the mandatory CSR under law, the spending by the NSE-listed companies has grown at a compounded rate of sixteen per cent per anum.