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CMA Final · Corporate and Economic Laws · Corporate Governance and Social Responsibility and Sustainability

A company has an ongoing CSR project and a part of its CSR amount for the financial year remains unspent for that project. According to section 135(6), what must the company do?

The company must transfer the unspent amount within thirty days from the end of the financial year to a special Unspent Corporate Social Responsibility Account opened in a scheduled bank for that year. The six-month Schedule VII Fund route applies only when the amount does not relate to an ongoing project.

  1. ATransfer the unspent amount within thirty days from the end of the financial year to a special Unspent Corporate Social Responsibility Account in any scheduled bankCorrect
  2. BTransfer the amount within six months of the end of the financial year to a Fund specified in Schedule VII
  3. CCarry the amount forward in its books without any transfer for one year
  4. DTransfer the amount to the Unspent CSR Account within ninety days of the Annual General Meeting

Explanation

Section 135(6) requires the unspent amount for an ongoing project to be moved within thirty days from the end of the financial year to a special Unspent CSR Account in a scheduled bank. The six-month transfer to a Schedule VII Fund applies to unspent amounts not relating to an ongoing project.

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