Annual Report explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Every company covered by section 135 includes an annual report on CSR in its Board's report. For a financial year beginning on or after 1 April 2020 the report follows Annexure II of the Companies (Corporate Social Responsibility Policy) Rules, 2014, which has nine items. This article gives a draft in that order, with the tables outside the draft and notes on where each figure comes from. It is signed by the Chief Executive Officer or the Chairman of the CSR Committee, and by the managing director or a director, as the annexure shows.
This article is read as per the Companies Act, 2013 in the Ministry's consolidated text (last updated 29 July 2022), and the Rules as consolidated in the Ministry's e-book, consulted on 3 October 2026. Later amendments should be checked.
Rule 8(1) of the CSR Rules says the Board's report includes an annual report on CSR with the particulars in Annexure I or Annexure II, as applicable. Annexure I is headed for financial years commenced before 1 April 2020; Annexure II is for a financial year commencing on or after 1 April 2020. It has nine items, from the policy outline to the reasons for any shortfall against two per cent of average net profit. A default in spending or transferring the unspent amount under section 135(5) or (6) attracts a penalty under section 135(7).
When you need it and the legal basis
Who reports. Section 135(1) applies to every company with net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more, or net profit of rupees five crore or more during the immediately preceding financial year. Rule 3(1) of the CSR Rules extends it to a holding or subsidiary company and a foreign company with a branch or project office in India that meets the tests. Section 135(2) requires the Board's report to disclose the composition of the CSR Committee. Section 135(9) says where the amount to be spent under section 135(5) does not exceed fifty lakh rupees, the committee requirement does not apply and the Board discharges its functions; the report then states the Board's role in place of a committee.
What it must contain. Rule 8(1) puts the annual report in the Board's report; rule 8(2) puts it in the balance sheet filed under section 381(1)(b) for a foreign company. Rule 8(3) requires an independent impact assessment of completed projects with outlays of one crore rupees or more by a company with average CSR obligation of ten crore rupees or more in the three preceding years, and item 4 of Annexure II carries its summary.
Meaning of terms used in the tables. Rule 2(1) defines administrative overheads (rule 7(1) caps them at five per cent of total CSR expenditure), ongoing project (multi-year, timelines not exceeding three years excluding the year it commenced) and net profit (not including profit of overseas branches or dividend from Indian companies covered by section 135). Rule 7(3) allows an excess amount to be set off against the requirement of up to the immediately succeeding three financial years, if the Board passes a resolution, and rule 7(2) deals with surplus from CSR activities, which is not business profit.
Spending. Section 135(5) requires the Board to ensure that the company spends at least two per cent of the average net profits of the three immediately preceding financial years. An unspent amount for an ongoing project goes to the Unspent Corporate Social Responsibility Account within thirty days of the end of the financial year under section 135(6), to be spent within three financial years; other unspent amounts go to a Fund specified in Schedule VII within six months, as the second proviso to section 135(5) says. Schedule VII lists the activities by item number, from (i) hunger, poverty and health to (xii) disaster management. The separate filing with the Registrar is outside this article: the 2025 amendments name e-Form CSR-2 for it, and our CSR-1 and CSR-2 forms guide explains the forms.
The e-book cites Amendment Rules of 27 May 2026 inserting definitions; read the rules as the e-book prints them. For a fuller walk-through see CSR under section 135: complete compliance guide and, for the unspent amount, ongoing CSR projects, the Unspent CSR Account and the three-year rule. If you want the report drafted with the Board's report, see our compliance documentation service.
The format
ANNEXURE TO THE BOARD'S REPORT
ANNUAL REPORT ON CSR ACTIVITIES FOR THE FINANCIAL YEAR (commencing on or after 1 April 2020)
1. Brief outline of the CSR Policy of the Company
.]2. Composition of the CSR Committee
| Serial number | Name of director | Designation and nature of directorship | Meetings of the CSR Committee held during the year | Meetings attended during the year |
|---|---|---|---|---|
| 1 | ||||
| 2 | ||||
| 3 |
3. Web links
The composition of the CSR Committee, the CSR Policy and the CSR projects approved by the Board are disclosed on the Company's website at: .4. Impact assessment
5. Computation of the obligation
(a) Average net profit of the Company as per section 135(5): Rs.
(b) Two per cent of the average net profit: Rs.
(c) Surplus arising out of CSR projects, programmes or activities of previous financial years: Rs.
(d) Amount required to be set off for the financial year, if any: Rs.
(e) Total CSR obligation for the financial year, being (b) plus (c) minus (d): Rs.6. Amount spent
(a) Amount spent on CSR projects, both ongoing and other than ongoing: Rs.
(b) Amount spent on administrative overheads: Rs.
(c) Amount spent on impact assessment, if applicable: Rs.
(d) Total amount spent for the financial year, being (a) plus (b) plus (c): Rs.
(e) CSR amount spent or unspent for the financial year: see the table below.
(f) Excess amount for set-off, if any: see the table below.
| Total amount spent for the financial year (Rs.) | Unspent amount: transferred to Unspent CSR Account under section 135(6) (amount, date of transfer) | Unspent amount: transferred to a Fund specified in Schedule VII under the second proviso to section 135(5) (name of Fund, amount, date) |
|---|---|---|
| , | , , |
| Serial number | Particular | Amount (Rs.) |
|---|---|---|
| (i) | Two per cent of average net profit under section 135(5) | |
| (ii) | Total amount spent for the financial year | |
| (iii) | Excess amount spent, being (ii) minus (i) | |
| (iv) | Surplus arising out of CSR activities of previous financial years, if any | |
| (v) | Amount available for set-off in succeeding financial years, being (iii) minus (iv) |
7. Details of unspent CSR amount for the preceding three financial years
| Serial number | Preceding financial year | Amount transferred to Unspent CSR Account under section 135(6) (Rs.) | Balance in the Unspent CSR Account (Rs.) | Amount spent in the financial year (Rs.) | Amount transferred to a Schedule VII Fund (amount, date) | Amount remaining to be spent in succeeding years (Rs.) | Deficiency, if any |
|---|---|---|---|---|---|---|---|
| 1 | |||||||
| 2 | |||||||
| 3 |
8. Capital assets
Whether any capital asset has been created or acquired through CSR amount spent in the financial year: .
If yes, number of capital assets: .
For each asset, give: short particulars of the property or asset and its complete address and location as in the revenue record; pincode; date of creation; amount of CSR amount spent; and the details of the entity, authority or beneficiary that is the registered owner, with CSR Registration Number if applicable, name and registered address.9. Reasons for not spending two per cent
.]
, Chief Executive Officer / Chairman, CSR Committee
,
How to fill it
| Item | Where the figure comes from |
|---|---|
| 5(a) | Net profit computed as section 198 and rule 2(1)(h) require, averaged over three preceding financial years |
| 5(c), 5(d) | Prior-year surplus and set-off resolutions (rule 7(2) and (3)) |
| 6(a) | Project-wise ledger split between ongoing and other projects |
| 6(b) | Administrative overheads, capped at five per cent of total CSR expenditure (rule 7(1)) |
| 6(e) | Unspent Corporate Social Responsibility Account statement and the Fund transfer challans |
| 7 | Closing balances of the account for each of the three preceding years |
| 8 | Fixed asset register; rule 7(4) says the asset is held by a Section 8 company, registered public trust or society having charitable objects and a CSR Registration Number, by beneficiaries, or by a public authority |
Common mistakes
- Using Annexure I for a financial year beginning on or after 1 April 2020.
- Treating a surplus from CSR activities as business profit, when rule 7(2) says it is ploughed back or moved to the account or a Fund.
- Letting administrative overheads cross five per cent of the total CSR expenditure.
- Leaving the Schedule VII item number out of the policy outline.
- Setting off an excess without the Board resolution rule 7(3)(ii) needs.
Signing, filing and time limit
The annexure carries the signatures of the Chief Executive Officer or the Chairman of the CSR Committee and, wherever applicable, the person specified under section 380(1)(d) or the managing director or a director. It forms part of the Board's report, which section 134(6) requires to be signed. The rules print no separate time for the annexure; it is filed with the Board's report along with the financial statements. The separate CSR report to the Registrar is e-Form CSR-2; see the 2025 amendment to rule 12 and check the current time limit.
Need help with the annual report on CSR?
Our team prepares the annexure from the net profit workings, project ledgers and Unspent CSR Account statements, and ties it to the Board's report. See our compliance documentation page.
Key takeaways
- Annexure II is the format for financial years commencing on or after 1 April 2020.
- Nine items: policy, committee, links, impact assessment, obligation, spending, unspent history, assets, reasons.
- Administrative overheads are capped at five per cent of total CSR expenditure.
- Ongoing project money goes to the Unspent Corporate Social Responsibility Account within thirty days; other unspent money to a Schedule VII Fund within six months.
- The report forms part of the Board's report and is signed under the annexure's own signature block.
Read next
- CSR under section 135: complete compliance guide
- CSR disclosures under clauses (j) and (m): shortfall and nature
- Board's report format for a private company that is not small
- Ongoing CSR projects, the Unspent CSR Account and the three-year rule
Disclaimer: Based on the Companies Act, 2013 in the Ministry of Corporate Affairs consolidated text (last updated 29 July 2022), the Rules as consolidated in the Ministry's e-book and the other official texts named in this article, as consulted on 3 October 2026. Later amendments, notifications, circulars, forms and fees should be checked. Formats are general drafts to be adapted to the company's articles and facts. This article is general information, not legal advice; check the official text before acting.