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

Sundaram Textiles Ltd, an ongoing-project CSR spender, has an unspent CSR amount for FY 2025-26 relating to an ongoing project. Under Section 135, what must the company do with this amount?

The company must transfer the unspent amount within thirty days of the financial year end into the Unspent CSR Account at a scheduled bank, and spend it within three financial years from the transfer. If not spent, it goes to a Schedule VII Fund.

  1. ATransfer it within thirty days from the end of the financial year to the Unspent Corporate Social Responsibility Account, and spend it within three financial years from the date of transferCorrect
  2. BTransfer it within six months of the end of the financial year to a Fund specified in Schedule VII
  3. CCarry it forward in the books and spend it within five financial years without any special account
  4. DTransfer it within thirty days to a Fund specified in Schedule VII immediately

Explanation

Section 135(6) requires unspent amounts relating to 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. It must be spent within three financial years from the transfer date, failing which it goes to a Schedule VII Fund within thirty days of completing the third year. The six-month Fund transfer applies to non-ongoing-project unspent amounts.

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