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CorporateSocial
Responsibility
(post TheCompaniesAmendment Act, 2019)

Section 135 of CompaniesAct, 2013
Rulesand in consonancewith theCompaniesAmendment
Act, 2019
1

CSR – Applicability test
Every company falling under any of thecriteria
need necessarily do CSR IF IN IMMEDIATELY PREECDING
FINANCIAL YEAR ANY OF THE THREE HAPPENS
3
Net worth of
500 Crore or
more
OR
Turnover of
1000 Crore
or more (OR)
OR
Net profit of 5
Crore or
more

Company must spend:
2% of the Average net profits of Company made during 3 immediately
preceding financial year shall be spent for CSR activity.
Net profit shall not includesuch sum asmay beprescribed
Net profit shall becalculated in accordancewith provision of Section 198 (Section
198 related to thecomputation of net profit)
CSR Amount - Calculation
4
2% of Average
net profit
During
immediately
preceding 3 years

PreviousCSR Law on unspent fund : MandateErstwhile
IF, thecompany failed to meet itsCSR obligations, the
reasonsfor not spending theCSR amountswererequired
to bedisclosed in thedirectors' report.
Lately, Government of India has come up with the
Amendments in the CSR Law which is still to be
notified.
5

New Law:
UNSPENT AMOUNT at theend of financial year
Not related to ongoing project
Company must transfer unspent amount to afund specified in
scheduleVII, within aperiod of 6 monthsof theexpiry of that
Financial year.
**
CompaniesAct, 2013 ScheduleVII (ix) specifiesfunds
6

CSR fund: Unspent (ScheduleVII)
CompaniesAct, 2013 ScheduleVII (ix) specifiesfunds:
 contribution to the Prime Minister's National Relief Fund
 or any other fund set up by the Central Government
 or the State Governments
for socio-economic development and relief and funds for the welfare of the
Scheduled Castes, the Scheduled Tribes, other backward classes, minorities
and women
7

New Law:
UNSPENT AMOUNT at theend of financial year
Related to ongoing project
 Company has to transfer such amount within 30 from the end of FY to a special
account in bank known as Unspent CSR Account.
 Unspent CSR Account will have to be spent by the company towards the CSR
projects (under its CSR policy) within 3 (three) financial years from the date of
such transfer.
 If the company is unable to spend the sum in the Unspent CSR Account within
the prescribed period of 3 (three) financial years, then, such unspent amount
should be transferred to a fund specified under Schedule VII of the Companies
Act (Schedule VII Fund) within 6 (six) months from the end of the relevant
financial year.
8

Simplified Treatment
2% of net profit
shall betransferred
to aspecial account
to becalled
Unspent Corporate
Social
Responsibility
Account within a
period of 30 days
from theend of
financial year
Company must
spend such amount
for CSR within a
period of 3
financial year from
thedateof such
transfer
If company failsto
spend within aperiod
of 3 years, it isan
obligation to transfer
thesameto afund
specified in Schedule
VII within aperiod
of 30 daysafter
completion of 3rd FY
9

CSR Account and Fund – Understanding
Unspent CSR Account
 This account is used for
transferring amount of CSR
which is supposed to be spent.
 Amount shall be deposited in
this account within a period of
30 days from the end of
financial year when CSR
liability arose.
CSR Fund as per Schedule
VII
 This fund is used for unused
amount of CSR which was
supposed to be spent.
 Amount shall be deposited in this
fund within 30 days from the
completion of 3rd financial
year.
 (for doing CSR 3 year time tat
isgiven)
10

Penal Provision : Liability
12
If a company Contravenes
Penalty on Company:
> Minimum 50 Thousand
> Maximum 25 Lac
Penalty on officer in
default:
> Fine of 50 thousand up to 5 Lac
(and/or)
> Imprisonment may extend up to
3 years

13
Thank You!
Any questions?
Submitted by:
Shraddha Singhi
⬩ Company Secretary
⬩ 3rd Oct, 2019

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