CA Update Clarification on excess CSR contributions made for FY 2019-20

Published On: 21-5-2021

MCA had made an appeal on March 30, 2020 to the top 1000 companies in terms of market capitalization, to contribute generously to ‘PM CARES Fund’ and fulfil its Corporate Social Responsibility (CSR) obligations. Pursuant to the appeal and the contributions made thereof, MCA has issued a clarification that:

 

If a company contributed any amount to ‘PM CARES Fund’ on March 31, 2020 for FY 2019-20, exceeding the minimum amount required to be spent for CSR activities under section 135(5) of the Companies Act, 2013, such excess amount spent or a part thereof may be set off against the requirement to spend the minimum CSR amount for FY 2020-21, on the following conditions, and would not be considered as a violation of the applicable laws: 

 

• • The unspent CSR amount for preceding financial years, if any, must be factored;
  • The chief financial officer and statutory auditor of the company are required to certify that the contribution made to ‘PM CARES Fund’ was made on March 31, 2020 in pursuance of the appeal; and

• Separate disclosure for such CSR contribution is required to be made in the annual report of the company for FY 2020-21.

 

The aforementioned was clarified by MCA vide circular dated May 20, 2021 (available here).