Corporate Compliance Readiness Quiz

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CSR Quiz

1. What reporting requirement is imposed on statutory auditors by CARO, 2020 regarding CSR compliance?

   • Auditors must certify implementing agency fund utilization.
   • Auditors must report whether unspent CSR amounts have been transferred within specified time.
   • Auditors must provide a separate impact assessment certificate.
   • Auditors must verify Section 198 average net profit calculation.

2. In the context of GST implications for CSR, what was the significance of the Kerala Authority for Advance Ruling (AAR) decision in the case of M/s. Polycab Wires Private Limited?

   • It held that ITC is not available for goods distributed under CSR as they are considered free gifts under Section 17(5)(h).
   • It established that CSR overrides GST restrictions on ITC.
   • It held that CSR activities are in the course of business allowing full ITC.
   • It clarified that only service-based CSR activities are eligible for ITC.

3. Which of the following describes an "Ongoing Project" according to the CSR framework discussed in the text?

   • A project completed within the same financial year it commenced.
   • Any project with contractual liability incurred.
   • A project approved indefinitely by the CSR Committee.
   • A project with a multi-year timeline not exceeding three years, excluding the commencement year.

4. When computing Net Profit for Section 135 purposes, which adjustment is specifically required under Rule 2(f) of the CSR Policy Rules, 2014?

   • Inclusion of all dividends received from Indian companies.
   • Inclusion of overseas branch profits if not separately incorporated.
   • Deduction of all capital expenditure incurred during the year.
   • Exclusion of any profit arising from overseas branches.

5. An implementing agency (IA) that is a registered public trust or society is required to have a "track record" to be eligible. According to the source material, what does this requirement entail?

   • The entity must have handled a CSR budget of at least ₹1 crore in previous years.
   • The entity must have existed for at least three financial years.
   • The entity must have been involved in undertaking similar activities for at least three years.
   • The entity must be registered with the Ministry of Corporate Affairs for at least three years.