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CS Professional · CSR and Social Governance · Corporate Social Responsibility

Sahyadri Steels Ltd defaulted by not transferring Rs 3 crore of unspent CSR amount to a Schedule VII Fund as required. Its company penalty and the penalty on each officer in default would be:

The company is liable to the lesser of twice Rs 3 crore, which is Rs 6 crore, and Rs 1 crore, so Rs 1 crore. Each officer in default pays the lesser of Rs 30 lakh and Rs 2 lakh, so Rs 2 lakh.

  1. ACompany Rs 1 crore; each officer Rs 2 lakhCorrect
  2. BCompany Rs 6 crore; each officer Rs 30 lakh
  3. CCompany Rs 3 crore; each officer Rs 2 lakh
  4. DCompany Rs 1 crore; each officer Rs 30 lakh

Explanation

The company penalty is twice the amount required to be transferred or Rs 1 crore, whichever is less. Twice Rs 3 crore is Rs 6 crore, so Rs 1 crore applies. For each officer in default it is one-tenth of the amount, which is Rs 30 lakh, or Rs 2 lakh, whichever is less, so Rs 2 lakh applies.

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