Skip to content

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

A company has an ongoing CSR project and transferred the unspent amount to its Unspent CSR Account at the end of a financial year. It failed to spend the amount within the permitted period. What must the company do under Section 135?

If the amount in the Unspent CSR Account is not spent within three financial years from the date of transfer, the company must transfer it to a Fund specified in Schedule VII within thirty days from the date of completion of the third financial year.

  1. ATransfer it to a Fund specified in Schedule VII within thirty days from the date of completion of the third financial yearCorrect
  2. BCarry it forward indefinitely in the same account
  3. CTransfer it to a Fund specified in Schedule VII within six months of the third financial year
  4. DReturn it to the company's general reserves

Explanation

Section 135(6) allows three financial years from the date of transfer to spend the amount. Failing that, the company must transfer it to a Schedule VII Fund within thirty days from the date of completion of the third financial year. Six months is the wrong period for this case.

Did you get it right without looking?

One question tells you little. A timed set on Corporate Governance and Social Responsibility and Sustainability shows your real accuracy, how long you take and where you lose marks.

Practise Corporate Governance and Social Responsibility and SustainabilityFree diagnostic mock

More Corporate Governance and Social Responsibility and Sustainability questions