Free Consultation by Expert
Many thanks to Setbharatbiz. We had an excellent experience working with its expert. They have a strong sense of professionalism when dealing with clients.
Mudassir CEO, Twinfinty DigiTech SolutionsWe would recommend Setbharatbiz incorporation services to any founder without a second doubt. The process was beyond efficient and shows Setbharatbiz founder's vision
Nagasrinivas Director,Prakash Nagasrinivas & Saradhy AssociatesI was searching for a company for assistance in the incorporation services. Then one of my friend tell me about Setbharatbiz and definitely the Setbharatbiz is the best.
Prakash Kakani Director, PNS EV HubOverview
Corporate Social Responsibility (CSR) Impact Reporting
Corporate Social Responsibility (CSR) Impact Reporting involves documenting and evaluating the outcomes of CSR activities undertaken by companies. It demonstrates how CSR efforts contribute to social, environmental, and economic development while ensuring compliance with legal requirements under the Companies Act, 2013 and relevant CSR rules.
CSR impact reporting is essential for companies to showcase transparency, assess the effectiveness of their CSR initiatives, and align with stakeholder expectations. This includes disclosing CSR expenditure, activities undertaken, and measurable outcomes, which are submitted in the annual report to the Ministry of Corporate Affairs (MCA).
Importance
1. Legal Compliance : Mandatory for companies meeting CSR thresholds under Section 135 of the Companies Act.
2. Stakeholder Engagement : Enhances trust and credibility among investors, employees, and the community.
3. Transparency : Provides a clear overview of the company’s CSR initiatives and their impact.
4. Strategic Insights : Helps evaluate the effectiveness of CSR projects and improve future planning.
5. Social Responsibility : Demonstrates the company’s commitment to societal well-being.
Applicability
CSR Impact Reporting is mandatory for companies that:
- Have a net worth of ₹500 crore or more, or
- Have a turnover of ₹1,000 crore or more, or
- Have a net profit of ₹5 crore or more.
These companies must spend at least 2% of their average net profits of the preceding three financial years on CSR activities and report the same.
Key Requirements for CSR Impact Reporting
- Disclosure of CSR Policy :
- Outline the company’s CSR philosophy, objectives, and project selection criteria.
- CSR Activities Undertaken :
- Provide details of activities aligned with Schedule VII of the Companies Act, 2013 (e.g., education, health, environment).
- CSR Expenditure :
- Disclose the total CSR spend, allocated budget, and unspent amount (if any).
- Impact Assessment :
- Evaluate and report the measurable outcomes of CSR initiatives.
- Board’s Responsibility Statement :
- Include a statement from the Board certifying CSR compliance and effectiveness.
- Annual Report on CSR :
- Submit the CSR report as part of the company’s annual report to the MCA.
Documents Required
Features
Features & Benefits of Corporate Social Responsibility (CSR) Impact Reporting
Impact Assessment Requirement
Alignment with Schedule VII
Transparency in Reporting
Third-Party Assessments
Corporate Social Responsibility
Focus on Unspent Amounts
Board Oversight
Digital Filing
Stakeholder Communication
Promotes Social Responsibility
Comparison with Related Services
| Feature | CSR Impact Reporting | CSR Policy Development | ESG Compliance |
|---|---|---|---|
| Objective | Report CSR outcomes and impact | Outline CSR strategy and goals | Ensure environmental, social, and governance adherence |
| Applicability | CSR-mandated companies | CSR-mandated companies | Companies with ESG goals |
| Regulatory Body | MCA | MCA | SEBI, MCA |
| Reporting Frequency | Annually | One-time/Periodic updates | Annually |
| Penalty for Non-Compliance | High | Medium | High |
Frequently Asked Questions
What is CSR impact reporting?
CSR impact reporting documents the outcomes and effectiveness of a company’s CSR initiatives, as mandated under the Companies Act, 2013.
Who must prepare a CSR impact report?
Companies meeting CSR thresholds under Section 135 of the Companies Act must include a CSR report in their annual filings.
What is the role of impact assessment in CSR reporting?
Impact assessments evaluate the effectiveness of CSR projects, ensuring that they meet objectives and deliver measurable benefits to beneficiaries.
What happens to unspent CSR funds?
Unspent funds must be transferred to a designated government fund or used for ongoing projects within the stipulated timeline.
Can CSR funds be spent on employee welfare?
No, CSR funds must be used for activities benefiting society and not for employee welfare or regular business activities.
Is impact assessment mandatory for all CSR projects?
Impact assessment is mandatory for CSR projects with an expenditure exceeding ₹1 crore and is applicable for companies with an average CSR obligation of ₹10 crore or more in the preceding three years.