# CSR Implementation & Reporting
## CSR Implementation Modes
The Board of Directors (BOD) must ensure CSR activities are undertaken through one of the following routes:
### Route 1: By the company itself
The company directly executes the CSR activities.
### Route 2: Through an eligible entity
The company may implement CSR through:
(a) Section 8 company / registered public trust / registered society that is:
- A charitable entity established by the company (alone or jointly with another company),
- Established by Central Government / State Government, or
- A charitable entity having 3 years' experience in undertaking similar activities.
(b) Statutory body established by an Act of Parliament / State Legislature.
> Registration requirement: Such entities must register with the Central Government by filing Form CSR-1 (verified by a CA / CS / CMA) with the ROC. A CSR Registration Number is generated on submission.
## Local Area Preference
The company shall give preference to the local area where it operates while spending on CSR.
## Collaboration and International Engagement
| Permitted | Conditions |
|---|---|
| Collaboration with other companies | CSR committee of each company must be in a position to report separately on its projects/programmes |
| Engaging international organisations | Only for designing, monitoring & evaluation of CSR projects, and for capacity building of own personnel |
## CSR Reporting
### (A) Annual Reporting on CSR
- The Board Report of a company required to constitute a CSR Committee shall include an Annual Report on CSR.
- In case of a foreign company, the balance sheet shall contain the Annual Report on CSR.
### (B) Impact Assessment
Applicable to companies having an average CSR obligation of ≥ ₹ 10 crores in the preceding 3 financial years.
Key requirements:
- Impact assessment must be done through an independent agency.
- Applies to CSR projects with outlays ≥ ₹ 1 crore and which were completed at least 1 year before the assessment.
- The Impact Assessment Report must be placed before the BOD and annexed to the Annual Report on CSR.
### Booking of Impact Assessment Expenditure
The company may book impact assessment expenditure as CSR expenditure of the FY up to the higher of:
- 2% of CSR expenditure of the FY, or
- ₹ 50 lakhs.
## Quick Reference Table
| Particulars | Threshold |
|---|---|
| Impact assessment trigger | Avg. CSR obligation ≥ ₹ 10 crores in last 3 FYs |
| Project outlay needing impact assessment | ≥ ₹ 1 crore |
| Project completion requirement | At least 1 year before assessment |
| Cap on impact assessment expenditure (as CSR) | Higher of 2% of CSR expenditure or ₹ 50 lakhs |