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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Corporate Social Responsibility (CSR)

Rajdhani Steels Ltd, an unlisted public company, crossed the turnover threshold of Rs 1000 crore in the financial year ending 31 March 2026, having been below it in all earlier years. For which financial year does the CSR Committee requirement first arise?

The requirement first arises in the financial year following the year ended 31 March 2026. Section 135(1) tests net worth, turnover or net profit during the immediately preceding financial year, not a three-year average and not the current year.

  1. AThe financial year following 31 March 2026, since thresholds are tested on the immediately preceding financial yearCorrect
  2. BThe year ending 31 March 2026 itself, applied retrospectively
  3. COnly after three consecutive years above the threshold
  4. DOnly after the average turnover of three years exceeds Rs 1000 crore

Explanation

Section 135(1) tests thresholds during the immediately preceding financial year. Crossing in FY ended March 2026 therefore triggers the obligation for the next year. There is no requirement of three consecutive years or an average test.

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