Corporate Social Responsibility Advisory
CSR under Section 135, run the way a Chartered Accountancy firm would
Once your company crosses the net-worth, turnover or net-profit thresholds, CSR is no longer optional goodwill — it is a statutory obligation with Board accountability, defined filings and real disclosure exposure. We help boards, CSR committees and finance teams get the computation, the Annual Action Plan, the implementing-agency structure and every filing right, so your CSR spend stands up to scrutiny.
Grounded in Section 135 of the Companies Act, 2013 and the Companies (CSR Policy) Rules, 2014 as amended — partner-reviewed before it reaches your Board.
Where CSR goes wrong
CSR is a compliance obligation — and it trips good teams up
The intent is rarely the problem. The technical detail is — the Section 198 base, the plan, the agency chain, the deadlines and the disclosures. This is where it slips.
The 2% base is easy to get wrong
The obligation is 2% of the average net profit of the three immediately preceding financial years, computed under Section 198 — not book profit or profit before tax. Finance teams frequently start from the wrong figure, missing the specific additions and exclusions Section 198 requires.
The Annual Action Plan is treated as a formality
The Rules require a Board-approved Annual Action Plan with defined projects, modalities of execution, implementation schedules, monitoring mechanisms and need/impact assessment. A thin one-page plan leaves the Board exposed when spend deviates from what was approved.
Implementing agencies are onboarded without checking CSR-1
From April 2021, an implementing agency must hold a valid CSR Registration Number via Form CSR-1 for a company to route CSR funds through it. Companies discover the gap only when spend has already flowed to an ineligible partner.
Unspent money is a live compliance trap
Unspent amounts carry hard deadlines — ongoing-project balances to a dedicated Unspent CSR Account within 30 days of year-end, other unspent amounts to a Schedule VII fund within six months. Miss the transfer and the shortfall becomes a Board-level default, not a rounding issue.
Impact assessment triggers are misread
Independent impact assessment becomes mandatory once your CSR obligation and project sizes cross the thresholds — an average obligation of ₹10 crore or more, on individual projects of ₹1 crore or more. Teams either skip it when it was due, or run it and book the cost incorrectly against the CSR spend.
The Board's Report disclosure is where errors surface publicly
The CSR annexure to the Board's Report, plus Form CSR-2, put your computation, spend, unspent movement and set-off on the record. Inconsistencies between the annexure, CSR-2 and the accounts are exactly what reviewers and regulators look for.
What we do
The full CSR lifecycle, handled
From the first computation to the final disclosure — take all of it, or just the parts your team needs.
Computing the CSR obligation correctly
We compute the 2% obligation on the average net profit of the last three financial years, worked out under Section 198 with the prescribed additions and exclusions — so the base figure your Board approves is defensible from the start.
Building the Board-approved Annual Action Plan
We help draft an Annual Action Plan that meets the Rules — the CSR projects and the Schedule VII areas they fall under, the manner of execution, implementation schedules, the monitoring and reporting mechanism, and need/impact assessment where relevant — in a form the Board can adopt and stand behind.
Selecting and appraising CSR project proposals
We appraise incoming proposals against Schedule VII eligibility, your CSR policy, budget and impact potential — so the Board funds projects that are both compliant and meaningful, rather than whatever lands on the table.
Registering and managing implementing agencies
We structure and manage the delivery chain — the tier-1 registered entity that must hold a valid CSR-1 registration, and the tier-2 on-ground partners who execute — with the due diligence and documentation to show funds went where they should.
Impact assessment for eligible projects
Where your average CSR obligation reaches ₹10 crore or more over three years, individual completed projects with an outlay of ₹1 crore or more need independent impact assessment. We identify which qualify, commission the study, and book its cost within the limit the Rules allow.
Ongoing monitoring, supervision & utilisation certification
We put in place the monitoring your Annual Action Plan promised — periodic reporting from implementing agencies, fund-utilisation tracking and utilisation certification — so you can evidence that CSR funds were actually applied to approved projects.
Drafting the CSR policy and SOPs
We draft or refresh your CSR policy and the standard operating procedures around proposal intake, approvals, disbursement, monitoring and closure — so CSR runs as a governed process, not ad-hoc decisions each year.
Keeping administrative overheads within the cap
Administrative overheads are capped at 5% of total CSR expenditure for the year, and the cost of the actual CSR project cannot be dressed up as overheads. We help you classify and monitor overheads so you stay inside the cap.
Unspent CSR Account & Schedule VII transfers
We manage the unspent-money rules end to end — designating genuine ongoing projects, moving ongoing-project balances to a dedicated Unspent CSR Account within 30 days of year-end (to be used within three financial years), and other unspent amounts to a Schedule VII fund within six months — with the tracking and Board approvals each step needs.
Set-off of excess CSR spend
Where you have spent more than required in a year, we help you claim set-off of the excess against the obligation of the succeeding financial years within the permitted limit — with the Board resolution and working papers to support it.
All statutory filings & Board's Report disclosures
We handle the compliance record end to end — Form CSR-1 for implementing agencies, Form CSR-2 reporting to the Registrar, and the CSR annexure to the Board's Report — kept consistent with each other and with your audited accounts.
What sets our CSR work apart
CSR read as company law, not just cheque-writing
Most CSR support stops at picking causes and disbursing funds. We treat CSR as the statutory compliance it actually is — the Section 198 computation, the Board-approved Annual Action Plan, the CSR-1 delivery chain, the impact-assessment and administrative-overhead limits, the unspent-money and set-off mechanics, and the CSR-2 and Board's Report disclosures — all handled as one connected obligation, and partner-reviewed before anything reaches your Board.
Who we do this for
For the people who carry the CSR obligation
How it works
Three stages, one clean audit trail
Assess applicability and fix the base
We confirm whether Section 135 applies for the year, compute the 2% obligation on the Section 198 average net profit of the last three financial years, and review your existing CSR policy, committee and prior-year position.
Plan, structure and execute
We help build the Board-approved Annual Action Plan, appraise and select projects, put the CSR-1-registered implementing-agency chain in place, and set up monitoring, utilisation tracking and impact assessment where required.
Reconcile, transfer and file
At year-end we reconcile spend against obligation, handle unspent-money transfers and any set-off, and prepare the CSR annexure, Form CSR-2 and related disclosures so everything ties back to your audited accounts — all partner-reviewed before submission.
Why Agarwal M & Co.
CSR handled by people who live in the Companies Act
A chartered accountancy firm, not a CSR intermediary
Your CSR compliance is handled by qualified professionals who work with Section 198, the Companies Act and audit realities every day — the same people who understand how the CSR numbers must sit within your financial statements.
The whole lifecycle under one roof
Computation, Annual Action Plan, implementing agencies, impact assessment, unspent money, set-off and every filing are handled as one connected engagement, so nothing falls between advisers.
Built to withstand scrutiny
We keep the working papers, Board resolutions, agency due diligence and utilisation trail that let your disclosures stand up to auditors, the Registrar and stakeholders — CSR you can defend, not just describe.
Current with the amended Rules
Our advice reflects the Companies (CSR Policy) Rules, 2014 as amended — including the later changes to impact assessment, administrative overheads and the unspent-money and set-off framework — and is reviewed before it reaches you.
Questions
Frequently asked
How do we know if CSR even applies to our company?
CSR under Section 135 applies if your company crossed any one of the prescribed thresholds — net worth of ₹500 crore, turnover of ₹1,000 crore, or net profit of ₹5 crore — in the immediately preceding financial year. Because it is tested each year on the previous year's figures, applicability can change over time. We assess your specific position entity by entity, including for holding and subsidiary companies.
How is the 2% CSR amount actually calculated?
The obligation is 2% of the average net profit of the three immediately preceding financial years, where net profit is computed under Section 198 of the Companies Act — with its specific additions and exclusions — rather than accounting profit or profit before tax. Getting this base right is the single most important step, and it is where we start.
Do we need a CSR Committee, and when can the Board handle it directly?
Where the amount required to be spent does not exceed ₹50 lakh, the Rules allow the Board itself to discharge the functions of the CSR Committee, so a separate committee is not mandatory — except that a company holding any amount in an Unspent CSR Account for an ongoing project must still constitute one. We advise which position applies to you and document it correctly.
What happens to CSR money we could not spend during the year?
Unspent amounts carry strict deadlines. Money tied to a genuine ongoing project must move to a dedicated Unspent CSR Account within 30 days of year-end and be used within three financial years; other unspent amounts must be transferred to a fund specified in Schedule VII within six months of year-end. We manage these transfers and the supporting Board approvals so an unspent balance never becomes a default.
When is impact assessment mandatory, and can we book its cost as CSR?
Independent impact assessment is required once your average CSR obligation reaches ₹10 crore or more over the three immediately preceding financial years, for individual projects with an outlay of ₹1 crore or more that were completed at least a year earlier. Its cost can be treated as CSR spend, but only up to the limit the Rules allow. We identify which projects require assessment and keep the cost within that limit.
What CSR filings and disclosures are we responsible for?
The core items are Form CSR-1 for registering implementing agencies, Form CSR-2 reporting to the Registrar, and the CSR annexure to the Board's Report covering your obligation, spend, unspent movement and any set-off. We prepare these so they are internally consistent and reconcile with your audited accounts, since inconsistencies are what draw scrutiny.
Let’s talk
A confident next step is one conversation away
Tell us what you’re working on and we’ll help you see the clearest path forward — no pressure, just clarity.
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