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A Tier-1 Indian cement producer operating a multi-plant branded franchise sits inside every Section 135(1) applicability trigger of the Companies Act 2013 — net worth above Rs 500 crore or turnover above Rs 1,000 crore or net profit above Rs 5 crore in the immediately preceding financial year — and carries a mandatory Corporate Social Responsibility spending obligation of at least two per cent of the average Section 198 net profits of the immediately preceding three financial years, allocated to activities enumerated under Schedule VII, tracked at project-and-programme granularity in the CSR Committee register, reconciled at year-end against the Section 135(5) actual-spend requirement, and routed for any unspent balance under a two-track transfer mechanic (ongoing projects to an Unspent CSR Account within 30 days of the financial year end with a three-year deployment window, non-ongoing project balances to a Schedule VII fund within six months of the financial year end). Failure to transfer the unspent amount within the statutory window triggers the Section 135(7) penalty framework — twice the unspent amount or one crore rupees whichever is less for the company plus one-tenth of the amount or two lakh rupees whichever is less for each officer in default. The Section 37 Explanation 2 of the Income-tax Act 1961 disallowance treats CSR expenditure as non-deductible as a business expense and creates a permanent difference under Ind AS 12 between accounting profit before tax and taxable income, with the tax cost of the CSR spend being the CSR quantum times the applicable corporate tax rate — a material reconciling adjustment in the Ind AS 12 income tax reconciliation under Paragraph 81(c). The reconciliation surface must hold the three-year Section 198 average net profit computation, the two per cent CSR obligation quantum, the CSR Committee-approved Schedule VII project-and-programme allocation, the year-end actual-spend position against each project, the ongoing-versus-non-ongoing classification for any unspent balance, the Section 135(5) and Section 135(6) transfer challan and Unspent CSR Account bank statement for the plant CFO year-end close, the Board's Report CSR disclosure under Section 134(3)(o) and Rule 8 of the CSR Rules for the Form AOC-4 XBRL filing under Section 137, and the Ind AS 12 permanent-difference disclosure in the deferred-tax working.
Build a CSR programme reconciliation ledger keyed on the financial year and the Section 198 average net profit computation. Compute the Section 198 net profit for each of the three immediately preceding financial years applying the inclusions and exclusions prescribed under Section 198 and Rule 2(1)(h) of the CSR Rules (excluding overseas branch profits and dividends from Indian Section 135-compliant companies). Derive the arithmetic average across the three years and apply the two per cent formula to arrive at the annual CSR obligation quantum. Load the CSR Committee-approved Board-ratified Schedule VII project-and-programme allocation with project code, Schedule VII activity family tag (education, environmental sustainability, healthcare, rural development, skill development and others), implementation modality tag (in-house or via a Section 8 company or a registered trust or a registered society holding a Rule 4(2) Form CSR-1 registration), annual budget quantum, ongoing-versus-non-ongoing project classification tag (per Board approval as a multi-year project meeting the Rule 2(1)(i) definition) and impact-assessment tag (mandatory under Section 135(6) for projects of outlay Rs 1 crore or more where the company has an average CSR obligation of Rs 10 crore or more in the preceding three financial years). Capture the actual spend against each project at the monthly close and reconcile against the CSR Committee-approved budget at the quarterly review. At the year-end close, identify the project-wise unspent balance, apply the ongoing-versus-non-ongoing classification, route the ongoing balance to an Unspent CSR Account opened at a scheduled bank within thirty days of the financial year end, route the non-ongoing balance to a designated Schedule VII fund within six months, capture the transfer challan and bank statement, and reconcile against the Board's Report CSR disclosure under Section 134(3)(o) and Rule 8. Post the CSR expenditure to the profit-and-loss statement under Ind AS 1 and tag every CSR line with the Section 37 Explanation 2 permanent-difference marker so the deferred-tax working preparer picks up the disallowance at year-end. Guard against the Section 135(7) penalty by running a standing transfer-window heatmap covering the 30-day and 6-month deadlines with automated reminders to the CSR Committee chair, the CFO and the company secretary. Reconcile the Board's Report CSR disclosure against the Form AOC-4 XBRL filing under Section 137 and against the impact assessment executive summaries mandated under Section 135(6).
CSR programme master with financial year tag, Section 198 average net profit computation for each of the three preceding financial years, exclusions applied (overseas branch profits and Section 135-compliant Indian dividends), arithmetic average, two per cent CSR obligation quantum. CSR Committee composition register with three-or-more directors including at least one independent director (or the Section 135(9) exemption where the CSR obligation is up to Rs 50 lakh and Board discharges the Committee functions). Board-approved CSR Policy with Schedule VII activity families covered, prioritisation criteria, geographic focus and implementation-partner list. Project-and-programme register with project code, Schedule VII activity family tag (each of the ten broad activity families), implementation modality tag (in-house / Section 8 company / registered trust / registered society with Rule 4(2) Form CSR-1 registration), annual budget quantum, ongoing-versus-non-ongoing classification, Board-approved multi-year timeline (not exceeding three years excluding commencement year for an ongoing project per Rule 2(1)(i)) and impact-assessment tag. Monthly actual-spend capture against each project with vendor invoice, payment challan and utilisation certificate from the implementing agency. Quarterly CSR Committee review with variance analysis against budget and corrective action tracker. Year-end unspent-balance identification with ongoing-versus-non-ongoing classification. Unspent CSR Account opened at a scheduled bank with transfer challan within thirty days of the financial year end for ongoing project balances (three-year deployment window). Schedule VII fund transfer challan within six months of the financial year end for non-ongoing project balances. Standing transfer-window heatmap covering the 30-day and 6-month deadlines as a Class A control on the CFO year-end close packet. Ind AS 12 permanent-difference tag on every CSR line for the deferred-tax working. Board's Report CSR disclosure per Section 134(3)(o) and Rule 8 with executive summary of the impact assessment mandated under Section 135(6). Form AOC-4 XBRL filing under Section 137 reconciled against the Board's Report and the CSR programme master.
A year-end CSR reconciliation packet for the plant CFO close cycle: the Section 198 average net profit computation with year-wise figures and applied exclusions, the two per cent CSR obligation quantum for the reporting year, the CSR Committee-approved Schedule VII project-and-programme allocation with activity family tags, the monthly and quarterly actual-spend position against each project, the year-end shortfall against the two per cent obligation with reasons stated per Section 134(3)(o) and Rule 8, the project-wise unspent balance with ongoing-versus-non-ongoing classification, the Unspent CSR Account opening at a scheduled bank with the transfer challan within thirty days of the financial year end for ongoing project balances and the deployment schedule across the three-year window, the Schedule VII fund transfer challan within six months of the financial year end for non-ongoing project balances, the Section 135(7) penalty-exposure position (nil where transfers are executed within the statutory windows), the impact assessment executive summaries for CSR projects of Rs 1 crore or more mandated under Section 135(6), the Ind AS 12 permanent-difference tag reconciled into the deferred-tax working with the CSR-disallowance-attributable adjustment to the Paragraph 81(c) income tax reconciliation, and the Board's Report CSR disclosure per Section 134(3)(o) and Rule 8 ready for the Form AOC-4 XBRL filing under Section 137. Every material deviation flagged for the CSR Committee chair, the CFO, the managing director and the company secretary. Multi-year continuity of the packet produces the audit trail that a statutory auditor reviewing Board's Report CSR compliance, an Income-tax Officer under Section 37 Explanation 2 assessment, a Ministry of Corporate Affairs compliance monitoring team and a Registrar of Companies scrutinising the Form AOC-4 XBRL filing all expect.
A Tier-1 Indian cement producer operating a pan-India multi-plant multi-grade branded franchise sits inside every one of the three Section 135(1) applicability triggers of the Companies Act 2013 — a net worth above Rs 500 crore, a turnover above Rs 1,000 crore and a net profit above Rs 5 crore in the immediately preceding financial year — and carries a mandatory Corporate Social Responsibility spending obligation of at least two per cent of the average Section 198 net profits of the immediately preceding three financial years, allocated to activities enumerated under Schedule VII of the Companies Act 2013, tracked at project-and-programme granularity in the CSR Committee register, reconciled at year-end against the Section 135(5) actual-spend requirement, and routed for any unspent balance under a two-track transfer mechanic — ongoing projects to a special Unspent Corporate Social Responsibility Account within 30 days of the financial year end with a three-year deployment window per Section 135(6), non-ongoing project balances to a Schedule VII fund within six months of the financial year end per the proviso to Section 135(5). The reconciliation discipline that ties the three-year Section 198 average net profit computation to the two per cent CSR obligation quantum, threads the Schedule VII project-and-programme allocation across the CSR Committee register, holds the ongoing-versus-non-ongoing classification for the unspent balance, closes the two-track transfer mechanic within the statutory 30-day and six-month windows, guards against the Section 135(7) penalty exposure (twice the unspent amount or one crore rupees whichever is less for the company plus one-tenth of the amount or two lakh rupees whichever is less for each officer in default), books the Section 37 Explanation 2 CSR permanent-difference disallowance in the Ind AS 12 deferred-tax working, and closes the Section 134(3)(o) Board’s Report CSR disclosure per Rule 8 of the Companies (CSR Policy) Rules 2014 for the Form AOC-4 XBRL filing under Section 137 is the year-end and quarter-end standing control for the branded cement franchise. This Section 135 CSR cement plant 2 percent Schedule VII reconciliation cornerstone walks through the mechanic.
Quick reference
| Aspect | Detail |
|---|---|
| Governing statute | Companies Act 2013, Section 135 |
| Applicability trigger (any one) | Net worth Rs 500 crore or above; turnover Rs 1,000 crore or above; net profit Rs 5 crore or above (immediately preceding financial year) |
| Spending obligation | Two per cent of the average Section 198 net profits of the immediately preceding three financial years |
| Measure of net profit | Section 198 net profit (not accounting PAT); exclusions per Rule 2(1)(h) CSR Rules |
| Schedule VII activity families | Ten broad families — hunger, healthcare, education, gender equality, environment, national heritage, armed forces veterans, sports, PMNRF and PM CARES, technology incubators and rural development |
| CSR Committee | Three or more directors, at least one independent director (Section 135(2)); Board discharges functions where CSR obligation up to Rs 50 lakh (Section 135(9)) |
| Impact assessment threshold | CSR obligation Rs 10 crore or more in preceding three financial years, projects of Rs 1 crore or more (Section 135(6)) |
| Ongoing project definition | Multi-year project, timeline up to three years excluding commencement year (Rule 2(1)(i)) |
| Ongoing project unspent balance transfer | Unspent CSR Account at a scheduled bank within 30 days of financial year end (Section 135(6)); spend within three financial years |
| Non-ongoing project unspent balance transfer | Schedule VII fund within six months of financial year end (Section 135(5) proviso) |
| Section 135(7) penalty (company) | Twice the unspent amount or Rs 1 crore whichever is less |
| Section 135(7) penalty (each officer in default) | One-tenth of the unspent amount or Rs 2 lakh whichever is less |
| Section 37 Explanation 2 IT Act | CSR expenditure not deductible as business expense (permanent difference) |
| Ind AS 12 treatment | Permanent difference disclosed in income tax reconciliation under Paragraph 81(c); no deferred tax asset or liability |
| Board’s Report disclosure | Section 134(3)(o) plus Rule 8 CSR Rules format; part of Form AOC-4 XBRL filing under Section 137 |
| Class A control | Standing 30-day and 6-month transfer-window heatmap for the year-end CFO close |
The reconciliation in one paragraph
A Tier-1 Indian cement producer subject to Section 135 of the Companies Act 2013 must compute the Section 198 net profit for each of the three immediately preceding financial years (applying the Section 198 inclusions and exclusions and the Rule 2(1)(h) CSR-specific exclusions for overseas branch profits and dividends received from other Indian Section 135-compliant companies), derive the arithmetic average, apply the two per cent formula to arrive at the annual CSR obligation quantum, allocate the obligation to CSR Committee-approved Schedule VII projects and programmes at project-and-programme granularity, track the actual spend at monthly close, identify any year-end unspent balance, classify each unspent balance as an ongoing project balance (routed to an Unspent CSR Account opened at a scheduled bank within 30 days of the financial year end for deployment within a three-year window per Section 135(6)) or a non-ongoing project balance (routed to a Schedule VII fund within six months of the financial year end per the proviso to Section 135(5)), close the transfer challans and Unspent CSR Account bank statement position for the CFO year-end packet, tag every CSR expenditure line with the Section 37 Explanation 2 permanent-difference marker for the Ind AS 12 deferred-tax working, disclose the CSR position in the Board’s Report per Section 134(3)(o) and Rule 8 of the Companies (CSR Policy) Rules 2014, and file the disclosure in the Form AOC-4 XBRL under Section 137. The core reconciliation surface is the CSR programme ledger keyed on the financial year and the Section 198 average net profit computation, holding the CSR Committee-approved Board-ratified Schedule VII project-and-programme allocation, the monthly actual-spend position, the year-end unspent balance with ongoing-versus-non-ongoing classification, the transfer challan and Unspent CSR Account bank statement, the impact assessment executive summaries for projects of Rs 1 crore or more mandated under Section 135(6), the Section 37 Explanation 2 permanent-difference tag and the Ind AS 12 income tax reconciliation entry. Every material deviation between the two per cent obligation and the actual spend, between the ongoing-versus-non-ongoing classification and the routed transfer, or between the Board’s Report disclosure and the Form AOC-4 XBRL filing is a year-end break flagged for the CSR Committee chair, the CFO, the managing director and the company secretary.
What the scenario looks like in India — a pan-India branded-cement CSR programme persona
The illustrative persona for this walkthrough is a Tier-1 Indian cement producer operating a pan-India multi-plant network across the Rajasthan-Chittorgarh limestone belt (with plants at Sirohi, Chittorgarh, Nimbahera and Beawar), the Madhya Pradesh-Satna cluster (Satna, Rewa, Katni), the Karnataka-Kalaburagi belt (Kalaburagi, Wadi), the Andhra Pradesh and Telangana cluster (Kadapa, Nalgonda), the Gujarat-Kutch cluster, the Tamil Nadu-Ariyalur belt (Ariyalur, Salem), the Chhattisgarh and Odisha cluster (Baloda Bazar, Rajgangpur) and the North-East Meghalaya-Lumshnong plant. The producer runs an integrated cement business with annual turnover in the Rs 60,000 to 70,000 crore range and net profit in the Rs 6,000 to 7,500 crore range across the immediately preceding three financial years — sitting well above every Section 135(1) applicability trigger and carrying a Section 135(5) two per cent CSR obligation in the Rs 120 to 150 crore range annually. The producer’s CSR Committee is constituted per Section 135(2) with three or more directors including at least one independent director, has approved a Board-ratified CSR Policy covering the Schedule VII activity families it operates against (typically education, environmental sustainability, rural development, healthcare and skill development weighted towards plant-catchment districts), and operates a programme portfolio that includes both ongoing multi-year projects (community schools construction, afforestation of mined-out limestone areas, watershed development, sanitation infrastructure) and non-ongoing single-year contributions.
Illustrative Tier-1 and Tier-2 Indian cement producers operating multi-plant branded franchises subject to Section 135 include UltraTech Cement (Aditya Birla), Shree Cement, Ambuja Cements (Adani Group), ACC Ltd (Adani Group), Dalmia Bharat Cement, JK Cement, Ramco Cements, Birla Corporation, JK Lakshmi Cement, Prism Johnson, Nuvoco Vistas, HeidelbergCement India, Orient Cement, India Cements, Sagar Cements, Sanghi Cement and Star Cement — every one of these branded producers meets every Section 135(1) trigger and runs the CSR programme reconciliation and Board’s Report disclosure mechanic documented here as standing operational discipline. The mechanic is identical for a plant operator in the Rajasthan-Sirohi belt as for a plant operator in the Tamil Nadu-Ariyalur belt or the Meghalaya-Lumshnong plant — the CSR obligation formula, the Schedule VII activity families, the ongoing-versus-non-ongoing classification, the two-track transfer mechanic and the Section 37 Explanation 2 tax treatment do not vary by geography or by the specific product portfolio (OPC, PPC, PSC) of the producer.
The regulatory overlay — Section 135, Schedule VII, CSR Rules 2014, Section 37 Explanation 2 and Ind AS 12
Six regulatory anchors govern a cement plant’s Section 135 CSR programme and its reconciliation to the Board’s Report and the deferred-tax working. The Companies Act 2013, Section 135 is the parent provision — sub-sections (1) applicability, (2) CSR Committee constitution, (3) Committee functions, (4) Board approval of CSR Policy, (5) two per cent spending obligation with the proviso for transfer of unspent non-ongoing balance to a Schedule VII fund within six months, (6) ongoing project unspent balance transfer to the Unspent CSR Account within 30 days with the three-year deployment window (and impact assessment for projects of Rs 1 crore or more), (7) penalty framework and (9) exemption from CSR Committee constitution where the obligation is up to Rs 50 lakh. Schedule VII of the Companies Act 2013 enumerates the ten broad activity families to which CSR expenditure may be applied. The Companies (Corporate Social Responsibility Policy) Rules 2014 (as amended by the CSR Amendment Rules 2021 and subsequent amendments) prescribe the operational framework including the definition of ongoing project (Rule 2(1)(i)), the definition of net profit for CSR purposes (Rule 2(1)(h)), the implementation modality (Rule 4), the administrative overhead cap of five per cent of total CSR expenditure (Rule 7(3)) and the annual CSR report format (Rule 8). Section 134(3)(o) of the Companies Act 2013 requires the Board’s Report attached to the annual financial statements to include the CSR report per the Rule 8 format. Section 37 Explanation 2 of the Income-tax Act 1961 disallows CSR expenditure as a business expense. Ind AS 12 governs the permanent-difference disclosure in the income tax reconciliation.
Section 135(5) prescribes that the Board of every company referred to in Section 135(1) shall ensure that the company spends, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. The measure of net profit is Section 198 net profit as further modified by Rule 2(1)(h) of the CSR Rules — the arithmetic average of the three-year Section 198 figures forms the base for the two per cent formula. Where the company fails to spend the two per cent, the proviso to Section 135(5) requires the Board to specify the reasons for the shortfall in the Section 134(3)(o) Board’s Report and, unless the unspent amount relates to an ongoing project referred to in Section 135(6), transfer the unspent amount to a Schedule VII fund within six months of the financial year end. Section 135(6) prescribes that any unspent amount pursuant to an ongoing project shall be transferred to a special account called the Unspent Corporate Social Responsibility Account opened at any scheduled bank within thirty days from the end of the financial year, and shall be spent by the company within three financial years from the date of transfer, failing which the amount is transferred to a Schedule VII fund within thirty days of the completion of the third financial year. Section 135(6) also mandates impact assessment through an independent agency for CSR projects of outlay Rs 1 crore or more, for companies with an average CSR obligation of Rs 10 crore or more in the immediately preceding three financial years — every Tier-1 Indian cement producer meets this threshold and the impact assessment executive summary is a required Board’s Report component.
Section 135(7) prescribes the penalty for default in complying with Section 135(5) or Section 135(6) — the company is liable to a penalty of twice the unspent amount required to be transferred or Rs 1 crore whichever is less, and every officer in default is liable to a penalty of one-tenth of the unspent amount or Rs 2 lakh whichever is less. Section 37 Explanation 2 of the Income-tax Act 1961 (inserted by the Finance (No.2) Act 2014 with effect from assessment year 2015-16) declares that CSR expenditure incurred by an assessee on activities relating to CSR referred to in Section 135 shall not be deemed to be an expenditure incurred by the assessee for the purposes of business or profession — CSR is not deductible under Section 37, creating a permanent difference under Ind AS 12 between accounting profit before tax and taxable income. CBDT Circular No. 01 of 2015 clarifies that CSR expenditure that independently qualifies for deduction under a specific section (Sections 30, 31, 32, 33, 35, 35AC, 80G and similar) remains deductible under that specific section subject to its own conditions — the classic case is a CSR-nature contribution routed through a Section 80G-approved trust where the Section 80G deduction remains available. The reconciliation failure mode analysis for India design pillar provides the failure-mode-driven design method that surfaces the CSR programme reconciliation gaps at the year-end close.
A worked example — Tier-1 pan-India cement producer FY 2026-27 CSR programme year-end close
Illustrative — the following figures represent the operating pattern of a Tier-1 Indian cement producer running a pan-India multi-plant network with a Section 198 average net profit of Rs 6,800 crore over the immediately preceding three financial years. The Section 135(5) two per cent CSR obligation formula quantum, the Schedule VII project-and-programme allocation, the year-end unspent balance and the two-track transfer routing are illustrative walkthrough numbers; public disclosures by listed Indian cement majors carry their own year-specific CSR obligation, allocation and disclosure position through the Board’s Report and Form AOC-4 XBRL filing under Section 137. Cross-verify against the actual Section 198 net profit computation for the specific reporting year and the company’s own CSR Committee-approved Board-ratified programme portfolio before action.
The pan-India cement producer with a Section 198 average net profit of Rs 6,800 crore for the immediately preceding three financial years computes its Section 135(5) two per cent CSR obligation for the reporting financial year 2026-27 as Rs 136 crore (Rs 6,800 crore times 2 per cent). The CSR Committee-approved Board-ratified Schedule VII project-and-programme allocation for FY 2026-27 is:
| Schedule VII activity family | Programme description | Allocation (illustrative) |
|---|---|---|
| Education | Community schools construction and running expenses in plant-catchment districts (Rajasthan-Chittorgarh, MP-Satna, Karnataka-Kalaburagi, AP-Kadapa, TN-Ariyalur) | Rs 45 crore |
| Environmental sustainability | Afforestation of mined-out limestone areas, watershed development, WASH programmes | Rs 30 crore |
| Rural development | Village infrastructure adjacent to plant locations (approach roads, community halls, street lighting) | Rs 25 crore |
| Healthcare | Mobile clinics and preventive healthcare camps for plant-catchment villages | Rs 20 crore |
| Skill development | Vocational training programmes linked to Ministry of Skill Development recognised courses | Rs 16 crore |
| Total | Rs 136 crore |
The producer executes the programme through a mix of in-house implementation (direct project management by the CSR team) and implementation through a Section 8 company and registered public trusts holding Rule 4(2) Form CSR-1 registration filed with the Registrar of Companies. Monthly actual-spend capture runs at approximately Rs 10.5 crore per month against the Rs 136 crore annual obligation, with a quarterly CSR Committee review reconciling actual spend against the project-wise budget and tracking variances.
At the year-end close for FY 2026-27, the actual spend across the portfolio is Rs 128 crore against the Rs 136 crore obligation — an unspent balance of Rs 8 crore. The CSR Committee reviews each project’s spending position and classifies the unspent balance:
| Project bucket | Unspent balance | Ongoing / Non-ongoing | Transfer route | Transfer window |
|---|---|---|---|---|
| Community schools construction — Rajasthan and TN sites | Rs 5 crore | Ongoing (multi-year Board-approved project per Rule 2(1)(i)) | Unspent CSR Account at a scheduled bank (Section 135(6)) | Within 30 days of FY end (three-year deployment window) |
| Standalone contribution to disaster relief that did not materialise | Rs 3 crore | Non-ongoing | Schedule VII fund — PM CARES Fund or PMNRF (Section 135(5) proviso) | Within six months of FY end |
Within 30 days of the 31 March 2027 financial year end, the CFO opens an Unspent Corporate Social Responsibility Account at a scheduled bank and transfers Rs 5 crore against the ongoing community schools construction project — the amount is to be spent within three financial years from the date of transfer (that is, by 31 March 2030), failing which the balance is transferred to a Schedule VII fund within 30 days of 31 March 2030. Within six months of the 31 March 2027 financial year end (that is, by 30 September 2027), the CFO transfers Rs 3 crore to a designated Schedule VII fund against the non-ongoing balance. The transfer challans, the Unspent CSR Account opening documents and the scheduled bank statement showing the transfer entry are captured in the CSR programme ledger for the CFO year-end packet.
Where the CFO fails to execute the transfers within the statutory windows, the Section 135(7) penalty framework applies. The theoretical formula application for the Rs 8 crore aggregate unspent balance is twice Rs 8 crore = Rs 16 crore for the company, but the Rs 1 crore cap binds — the company’s maximum penalty exposure is Rs 1 crore. Every officer in default (typically the CSR Committee chair, the managing director, the CFO and other Board members responsible) is separately liable to one-tenth of Rs 8 crore = Rs 80 lakh capped at Rs 2 lakh per officer — so each officer’s maximum penalty exposure is Rs 2 lakh. The Rs 1 crore company cap plus the per-officer Rs 2 lakh cap combined with the reputational and public-disclosure consequence of the default (through the Board’s Report under Section 134(3)(o) and the Form AOC-4 XBRL filing under Section 137, publicly accessible on the Ministry of Corporate Affairs portal) makes transfer-window compliance a Class A control.
On the Section 37 Explanation 2 permanent-difference dimension, the Rs 128 crore actual CSR spend for the year is disallowed as a business expense under the Income-tax Act 1961 (subject to any CSR spend independently qualifying under a specific alternative section such as Section 80G — for the illustrative walkthrough, assume the full Rs 128 crore falls under the general Section 37 Explanation 2 disallowance). At the applicable corporate tax rate under the concessional Section 115BAA regime of 25.17 per cent (inclusive of surcharge and cess), the tax cost of the CSR spend is Rs 128 crore times 25.17 per cent = Rs 32.22 crore — a material reconciling adjustment that the Ind AS 12 income tax reconciliation under Paragraph 81(c) discloses in the notes to the financial statements as the CSR-disallowance-attributable adjustment to the accounting-profit-times-tax-rate baseline. The permanent-difference tag flows automatically from the CSR programme ledger to the deferred-tax working preparer without discretionary judgement.
Common reconciliation breakages
Five breakages recur across Indian cement producers running the Section 135 CSR programme and reconciliation mechanic, and each maps to a specific control failure that a statutory auditor reviewing Board’s Report CSR compliance, an Income-tax Officer under Section 37 Explanation 2 assessment, a Ministry of Corporate Affairs compliance monitoring team or a Registrar of Companies scrutinising the Form AOC-4 XBRL filing will surface.
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Section 198 net profit computation shortcut using accounting PAT rather than the formal Section 198 calculation, understating or overstating the two per cent obligation. The most consequential formula-level failure is a CFO working using the reported PAT figures from the Ind AS 1 statement of profit and loss for each of the three immediately preceding financial years as a shortcut for the CSR formula base, without running the formal Section 198 computation that excludes capital gains, revaluation adjustments, profits from sale of undertakings and certain other Section 198-specific items, and without applying the Rule 2(1)(h) CSR-specific exclusions for overseas branch profits and dividends received from Indian Section 135-compliant companies. The shortcut typically overstates the base for a company with material Section 198 exclusion items (giving a two per cent obligation higher than the correct figure and triggering an unnecessary spend or unspent-transfer position) or understates the base (giving a two per cent obligation lower than the correct figure and triggering a Section 135(7) penalty exposure on the actual unspent balance calculated against the correct obligation). Reconciliation discipline: the CSR programme ledger holds the year-wise Section 198 net profit computation with each Section 198 inclusion and exclusion documented against the source-of-truth Ind AS 1 line and the specific reconciling adjustment, and the arithmetic average and the two per cent obligation quantum are computed from the formal Section 198 base — not from PAT.
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Ongoing-versus-non-ongoing classification applied wrongly at the year-end unspent balance identification, routing an ongoing balance to the six-month Schedule VII fund transfer or a non-ongoing balance to the 30-day Unspent CSR Account. The Rule 2(1)(i) definition of an ongoing project is a multi-year project undertaken in fulfilment of the CSR obligation having timelines not exceeding three years excluding the commencement year, and requires Board approval of the multi-year classification at project inception or by way of Board-recorded extension of a project initially not approved as multi-year. Where a project’s ongoing-status Board approval is not documented on file, the CFO wrongly classifying an intended-ongoing project as non-ongoing routes the unspent balance to the six-month Schedule VII fund transfer window — losing the three-year deployment optionality that the Unspent CSR Account provides, and irreversibly deploying the balance to a Schedule VII fund contribution rather than to the intended community project. The reverse failure — classifying a non-ongoing balance as ongoing without Board approval on file — exposes the CFO to a Section 135(7) penalty at the six-month deadline because the 30-day Unspent CSR Account transfer was executed but the underlying Board approval as an ongoing project is missing. Reconciliation discipline: the CSR programme ledger holds the Board approval reference (Board meeting date, agenda item and minute reference) for every ongoing project classification with the multi-year timeline documented, and the year-end unspent-balance identification routes the classification through the ledger not through discretionary judgement at close. The reconciliation playbook for monthly close frames the operational cadence for stitching the year-end classification into the CFO close cycle.
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Section 135(6) impact assessment not conducted for CSR projects of outlay Rs 1 crore or more where the company has an average CSR obligation of Rs 10 crore or more in the preceding three financial years, exposing the Board’s Report CSR disclosure to a compliance gap. Section 135(6) requires impact assessment through an independent agency for CSR projects of outlay Rs 1 crore or more where the company had an average CSR obligation of Rs 10 crore or more in the immediately preceding three financial years — the impact assessment executive summary is a mandatory component of the Board’s Report CSR disclosure under Rule 8 of the CSR Rules. A Tier-1 Indian cement producer with a Rs 100 crore-plus annual CSR obligation runs multiple projects of Rs 1 crore-plus outlay every year and must engage an independent impact assessment agency for each — the impact assessment terms of reference, the agency engagement letter, the field-level assessment report and the executive summary for the Board’s Report are the required artefact trail. Missing the impact assessment on a specific Rs 1 crore-plus project surfaces at the statutory auditor review of the Board’s Report and requires a subsequent-year corrective assessment. Reconciliation discipline: the CSR programme ledger holds an impact-assessment tag against every project with outlay Rs 1 crore or more, the engaged agency reference, the assessment scheduled date and the executive summary due date, with automated reminder to the CSR Committee chair 60 days ahead of the Board’s Report closure. The seven-family taxonomy of the recurring documentary-and-attestation failures that surfaces the impact-assessment gap sits in the human errors detection envelope anchor.
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Section 37 Explanation 2 permanent-difference tagging missed at CSR expenditure posting, understating the current tax charge in the Ind AS 12 income tax reconciliation. A CSR expenditure line posted to the profit-and-loss statement without the Section 37 Explanation 2 permanent-difference tag flows into the deferred-tax working preparer’s system as an ordinary deductible expense — the preparer computes the current tax charge on accounting-profit-less-deductions rather than adding back the CSR expenditure to arrive at the taxable income. At the year-end statutory audit, the auditor’s reconciliation of the accounting-profit-times-tax-rate baseline to the actual current tax charge picks up the omission as a reconciling adjustment and the CFO restates the current tax charge upward by the CSR-times-tax-rate quantum — for the illustrative Rs 128 crore CSR spend at 25.17 per cent, a Rs 32.22 crore upward restatement of the current tax charge with the corresponding downward restatement of profit after tax. Reconciliation discipline: the CSR programme ledger tags every CSR expenditure line with the Section 37 Explanation 2 permanent-difference marker at the point of posting, the general ledger integration passes the tag through to the deferred-tax working preparer, and the year-end Ind AS 12 income tax reconciliation under Paragraph 81(c) explicitly discloses the CSR-disallowance-attributable adjustment as a standing reconciling item.
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Board’s Report CSR disclosure and Form AOC-4 XBRL filing under Section 137 not reconciled, surfacing at Registrar of Companies scrutiny. The Board’s Report CSR disclosure under Section 134(3)(o) and Rule 8 of the CSR Rules contains project-wise expenditure, ongoing-project transfer disclosures, Schedule VII fund transfer disclosures and impact assessment executive summaries — and the corresponding fields in the Form AOC-4 XBRL filing under Section 137 must match. A drafting workflow that separates the Board’s Report preparation from the AOC-4 XBRL taxonomy tagging can leave the two disclosures inconsistent — an ongoing-project transfer disclosed as Rs 5 crore in the Board’s Report but tagged as Rs 4.5 crore in the AOC-4 XBRL, or a Schedule VII fund transfer to the PM CARES Fund disclosed in the Board’s Report but tagged to a different fund in the AOC-4 XBRL. Registrar of Companies scrutiny picks up the mismatch and requires clarification with a potential Section 137-related non-compliance flag. Reconciliation discipline: the CSR programme ledger is the single source-of-truth for both the Board’s Report drafting and the AOC-4 XBRL tagging, with a standing reconciliation of the two disclosures before the Board’s Report and AOC-4 XBRL are finalised for filing.
How a reconciliation platform handles this
A purpose-built cement reconciliation platform ingests the year-wise Section 198 net profit computation with each Section 198 and Rule 2(1)(h) inclusion and exclusion documented against the source-of-truth Ind AS 1 line, derives the three-year arithmetic average and the two per cent CSR obligation quantum, holds the CSR Committee-approved Board-ratified Schedule VII project-and-programme allocation with project code, Schedule VII activity family tag, implementation modality tag (in-house or Section 8 company or registered trust or registered society with Rule 4(2) Form CSR-1 registration), annual budget quantum, ongoing-versus-non-ongoing classification with Board approval reference, and impact-assessment tag for projects of Rs 1 crore or more where the company meets the Section 135(6) trigger. The platform captures monthly actual-spend against each project with vendor invoice, payment challan and implementing-agency utilisation certificate, runs the quarterly CSR Committee variance analysis, identifies the year-end unspent balance at project granularity, routes the classification through the Board approval reference not through discretionary judgement, and generates the transfer challans and the Unspent CSR Account bank statement position for the CFO year-end packet. Standing dashboard controls surface any project without a Board-approved ongoing-status classification 60 days ahead of the year-end close, any impact assessment not scheduled or executed for a Rs 1 crore-plus project, any CSR expenditure line posted without the Section 37 Explanation 2 permanent-difference tag, and any transfer window (30-day Unspent CSR Account or six-month Schedule VII fund) approaching the deadline without the transfer challan executed. The platform reconciles the Board’s Report CSR disclosure to the Form AOC-4 XBRL taxonomy tagging as the single source-of-truth for both disclosures. Match-rate improvement of 51 to 88 percent on the year-end CSR obligation-versus-actual-spend and transfer-window reconciliation, combined with an ISO 27001:2022 posture and DPDP Act 2023 aligned data handling for regulator-facing submissions, is what makes the platform an infrastructure investment for a Tier-1 or Tier-2 Indian cement producer running the CSR programme and reconciliation mechanic — rather than a spreadsheet substitute that leaves the Section 198 formula, the Schedule VII allocation, the ongoing-versus-non-ongoing classification, the two-track transfer mechanic, the Section 37 Explanation 2 permanent-difference tagging and the Board’s-Report-to-AOC-4-XBRL reconciliation as manual overheads on a hybrid CSR-team-plus-plant-finance-team. The commercial pillar for the cement sub-cluster is cement reconciliation software India; the broader authority for the platform is reconciliation software India.
Cross-cluster bridges and where to read next
The Section 135 CSR programme reconciliation mechanic documented here anchors the Cement Wave 3 Theme 8 corporate-and-cross-sector-obligations cluster and closes the wave alongside the DGMS mine safety compliance for cement limestone mining cost reconciliation walkthrough on the mine-safety-cost dimension, the Section 194C transport contractor rail-road siding cement plant TDS reconciliation walkthrough on the heavy-freight TDS mechanic, the CEPI Comprehensive Environmental Pollution Index cement plant MoEFCC critical area reconciliation walkthrough on the CPCB CEPI-critical-area posture and the cement industry CBAM Carbon Border Adjustment Mechanism EU export reconciliation walkthrough on the EU Regulation 2023/956 carbon border adjustment mechanic. The Cement Wave 1 cement plant CTE and CTO MoEFCC Category A EIA cost accounting India cornerstone frames the parallel MoEFCC clearance mechanic that the environmental sustainability CSR programme complements on the reclamation and afforestation dimension, and the Cement Wave 2 BIS certification IS 269 IS 1489 IS 455 cement plant cost accounting India cornerstone documents the parallel Section 37 versus Ind AS 38 boundary mechanic for the BIS Standard Mark licence fee that runs alongside the CSR Section 37 Explanation 2 permanent-difference mechanic documented here — both are Section 37-adjacent reconciliations on the cement plant tax computation.
The Chemicals Wave 3 REACH Regulation cost accounting for an Indian specialty chemical exporter to the EU cornerstone and the Chemicals Wave 4 TSCA US chemical import registration Indian exporter reconciliation walkthrough on the extraterritorial regulatory posture provide the cross-cluster reference for the corporate-obligations-and-cross-sector-reconciliations positioning that the Section 135 CSR mechanic represents on the Companies Act 2013 side. The variance-classification and operational reconciliation methodology framework — mapping each CSR programme lifecycle stage to a reconciliation surface, holding the Section 198 average net profit computation as the formula base, applying the correct Schedule VII activity family tag against each project, threading the ongoing-versus-non-ongoing classification through the Board approval reference, closing the two-track transfer mechanic within the 30-day and six-month statutory windows, tagging the Section 37 Explanation 2 permanent-difference marker at the CSR expenditure posting and reconciling the Board’s Report disclosure to the AOC-4 XBRL taxonomy tagging — sits in reconciliation failure mode analysis, reconciliation playbook for monthly close and the human errors detection envelope trust anchor. Operational lookups sit in the Section 393 payment code finder for the correct payment code where CSR expenditure routing crosses into a TDS-attracting professional-services or contractor payment and the Section 16(4) ITC exposure calculator for the parallel GST input tax credit posture that runs alongside the CSR programme reconciliation on the vendor-invoice-plus-GST leg.
The five FAQs below address the operational questions Indian cement CFOs, CSR Committee chairs, company secretaries, statutory auditors and Ministry of Corporate Affairs compliance monitoring teams ask most often when building the year-end CSR programme reconciliation packet under the six regulatory anchors — Companies Act 2013 Section 135 (parent provision), Schedule VII (permitted activity families), Companies (CSR Policy) Rules 2014 as amended (operational framework), Section 134(3)(o) plus Rule 8 (Board’s Report disclosure), Section 37 Explanation 2 of the Income-tax Act 1961 (permanent-difference disallowance) and Ind AS 12 (income tax reconciliation) — with Section 137 sitting parallel for the Form AOC-4 XBRL filing.
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- ▸ Companies Act 2013, Section 135 (Corporate Social Responsibility) — Section 135 of the Companies Act 2013 governs the mandatory Corporate Social Responsibility spending obligation for companies meeting the applicability thresholds under sub-section (1) — every company having a net worth of five hundred crore rupees or more, or a turnover of one thousand crore rupees or more, or a net profit of five crore rupees or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee of the Board. Sub-section (2) requires the CSR Committee to consist of three or more directors, of which at least one shall be an independent director (with Section 135(9) providing an exemption from constituting a CSR Committee where the spending obligation is up to Rs 50 lakh — in which case the functions of the CSR Committee are to be discharged by the Board). Sub-section (3) requires the CSR Committee to formulate and recommend a CSR Policy indicating the activities to be undertaken as specified in Schedule VII, recommend the amount of expenditure to be incurred and monitor the CSR Policy from time to time. Sub-section (4) requires the Board to approve the CSR Policy, place its contents on the company website and ensure that the activities included in the CSR Policy are undertaken by the company. Sub-section (5) prescribes the actual spending obligation — the Board of every company referred to in sub-section (1) shall ensure that the company spends, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy — with a mandatory transfer of any unspent amount to a designated account within the prescribed timeline where the amount remains unspent. Sub-section (6) requires impact assessment for CSR projects of Rs 1 crore or more where the company had an average CSR obligation of Rs 10 crore or more in the three immediately preceding financial years. Sub-section (7) prescribes the penalty for failure to transfer the unspent amount to the Unspent CSR Account or the Schedule VII fund — twice the amount required to be transferred by the company or one crore rupees whichever is less for the company, and one-tenth of the amount required to be transferred by every officer in default or two lakh rupees whichever is less.
- ▸ Companies Act 2013, Schedule VII (List of CSR permitted activities) — Schedule VII of the Companies Act 2013 (as amended from time to time) enumerates the activities that may be included by a company in its Corporate Social Responsibility Policy for the purposes of Section 135. The list includes eradicating hunger, poverty and malnutrition; promoting healthcare including preventive healthcare and sanitation including contribution to the Swachh Bharat Kosh, and making available safe drinking water; promoting education including special education and employment-enhancing vocation skills especially among children, women, elderly and the differently abled; promoting gender equality, empowering women, setting up homes and hostels for women and orphans; ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund; protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; measures for the benefit of armed forces veterans, war widows and their dependents, Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans and their dependents including widows; training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports; contribution to the Prime Minister's National Relief Fund or Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, Scheduled Tribes, other backward classes, minorities and women; contribution to incubators or research and development projects in the field of science, technology, engineering and medicine funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government; contribution to specified public-funded universities and institutions engaged in research; rural development projects; slum area development; disaster management including relief, rehabilitation and reconstruction activities.
- ▸ Companies (Corporate Social Responsibility Policy) Rules 2014 (as amended by the CSR Amendment Rules 2021) — The Companies (Corporate Social Responsibility Policy) Rules 2014 (as amended most materially by the Companies (Corporate Social Responsibility Policy) Amendment Rules 2021 notified with effect from 22 January 2021 and subsequent amendments) prescribe the operational framework for Section 135 compliance. Rule 2(1)(d) defines Corporate Social Responsibility to mean the activities undertaken by a company in pursuance of its statutory obligation under Section 135 in accordance with the CSR Rules but excludes activities in the normal course of business, activities undertaken outside India (except for training of Indian sports personnel), contribution to political parties, sponsorship-in-kind of marketing activities, and activities benefiting employees. Rule 2(1)(i) defines an ongoing project as a multi-year project undertaken by a company in fulfilment of its CSR obligation having timelines not exceeding three years excluding the financial year in which it was commenced. Rule 4 governs the CSR implementation modality — directly by the company itself or through a Section 8 company or a registered public trust or a registered society under the Income-tax Act 1961 that has established a track record of at least three years in undertaking similar activities and holds a registration under Rule 4(2) via Form CSR-1 filed with the Registrar of Companies. Rule 7 governs the treatment of surplus arising from CSR activities and the CSR fund treatment. Rule 8 governs the annual CSR report to be attached to the Board's Report and specifies the reporting format including project-wise expenditure disclosure, CSR Committee composition, executive summary of the impact assessment for CSR projects of Rs 1 crore or more where applicable, and specific disclosures on the ongoing project unspent balance transferred to the Unspent CSR Account and the non-ongoing unspent amount transferred to the Schedule VII fund within the statutory windows.
- ▸ Companies Act 2013, Section 135(5) proviso and Section 135(7) penalty framework — The proviso to Section 135(5) reads that if the company fails to spend such amount, the Board shall, in its report made under clause (o) of sub-section (3) of section 134, specify the reasons for not spending the amount and, unless the unspent amount relates to any ongoing project referred to in sub-section (6), transfer such unspent amount to a Fund specified in Schedule VII within a period of six months of the expiry of the financial year. Section 135(6) reads that any amount remaining unspent under sub-section (5) pursuant to any ongoing project fulfilling the prescribed conditions undertaken by a company in pursuance of its Corporate Social Responsibility Policy shall be transferred by the company within a period of thirty days from the end of the financial year to a special account to be opened by the company in that behalf for that financial year in any scheduled bank to be called the Unspent Corporate Social Responsibility Account, and such amount shall be spent by the company in pursuance of its obligation towards the Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer, failing which the company shall transfer the same to a Fund specified in Schedule VII within a period of thirty days from the date of completion of the third financial year. Section 135(7) reads that if a company is in default in complying with the provisions of sub-section (5) or sub-section (6), the company shall be liable to a penalty of twice the amount required to be transferred by the company to the Fund specified in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is less.
- ▸ Income-tax Act 1961, Section 37 Explanation 2 (CSR expenditure disallowance) — Explanation 2 to Section 37(1) of the Income-tax Act 1961 was inserted by the Finance (No.2) Act 2014 with effect from assessment year 2015-16 and reads — for the removal of doubts, it is hereby declared that for the purposes of sub-section (1), any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession. The provision creates a specific carve-out — Corporate Social Responsibility expenditure incurred by a company in fulfilment of its Section 135 obligation under the Companies Act 2013 is not deductible under Section 37 as a business expense against profits and gains from business or profession, notwithstanding that the expenditure is a statutory mandate and is recorded as a business expense in the Ind AS-compliant financial statements. Central Board of Direct Taxes (CBDT) Circular No. 01 of 2015 dated 21 January 2015 clarified the position — CSR expenditure is not eligible under Section 37, however where any CSR expenditure independently qualifies for deduction under any specific provision (Sections 30, 31, 32, 33, 33ABA, 35, 35AC, 35CCA, 35CCB, 35CCC, 35CCD, 80G etc.) subject to the conditions of that provision, such deduction is not barred by Explanation 2. The classic case is a CSR-nature contribution routed through a Section 80G-approved trust — the Section 80G deduction remains available subject to the Section 80G ceiling and conditions, but the underlying expenditure is not a Section 37 business deduction. The Section 37 Explanation 2 disallowance creates a permanent difference in the Ind AS 12 income tax reconciliation between accounting profit before tax and the tax base — the CSR expenditure is a deduction from profit before tax on the Ind AS 1 statement of profit and loss but is added back to arrive at the taxable income, and does not generate a deferred tax asset or liability because the difference will never reverse.
- ▸ Ind AS 12 Income Taxes (Companies (Indian Accounting Standards) Rules 2015) — permanent differences — Ind AS 12 governs the accounting for income taxes. Paragraph 5 defines temporary differences as differences between the carrying amount of an asset or liability in the balance sheet and its tax base — temporary differences generate deferred tax assets or liabilities. Paragraph 10 sets out the objective of the standard including the recognition of deferred tax consequences of transactions occurring in a period. A permanent difference is a difference between accounting profit and taxable profit that arises in the current period and will never reverse in a future period — permanent differences do not generate deferred tax assets or liabilities under Ind AS 12 but are disclosed in the income tax reconciliation prepared under Paragraph 81(c) between the accounting profit before tax multiplied by the applicable tax rate and the total tax expense charged to profit and loss. CSR expenditure disallowed under Section 37 Explanation 2 of the Income-tax Act 1961 is a classic permanent difference — the CSR expenditure is a deduction in arriving at accounting profit before tax on the Ind AS 1 statement of profit and loss but is disallowed for tax computation purposes under Section 37 Explanation 2 and does not reverse in any future period. The Ind AS 12 income tax reconciliation for a company subject to Section 135 CSR obligation shows the CSR-disallowance-attributable current tax charge as a reconciling item — for a Tier-1 Indian cement producer with a Rs 100 crore-plus annual CSR spend and the current corporate tax rate applicable to the assessee, the Section 37 Explanation 2 disallowance generates a material reconciling adjustment (the tax cost is CSR spend times the applicable tax rate) that the statutory auditor and the deferred-tax working preparer specifically call out in the notes to the financial statements. The Ind AS 20 government-grants standard is not applicable to the CSR spend itself — CSR spending is a discretionary Board-directed application of profits to Schedule VII activities, not a government grant received from a public authority; the treatment on the accounting books is direct expense recognition under Ind AS 1 with the permanent-difference disclosure under Ind AS 12.
- ▸ Companies Act 2013, Section 134(3)(o) and Board's Report CSR disclosure — Section 134(3)(o) of the Companies Act 2013 requires the Board's Report attached to the annual financial statements to include a report on the Corporate Social Responsibility Policy developed and implemented by the company during the year in accordance with Section 135. Rule 8 of the Companies (CSR Policy) Rules 2014 prescribes the specific format for the annual CSR report — the report must contain a brief outline of the CSR Policy, the composition of the CSR Committee (or Board where Section 135(9) applies), the average net profit of the company for the last three financial years, the prescribed CSR expenditure obligation for the reporting year (two per cent of the average net profit), the details of CSR spent during the year on ongoing projects, non-ongoing projects, contributions to Schedule VII funds and administrative overhead (capped at five per cent of total CSR expenditure per Rule 7(3)), reasons for any shortfall against the two per cent obligation, details of the unspent amount transferred to the Unspent CSR Account under Section 135(6) proviso, details of any unspent amount transferred to a Schedule VII fund under the Section 135(5) proviso, disclosure of the impact assessment reports for CSR projects of Rs 1 crore or more where applicable under Section 135(6), and the responsibility statement of the CSR Committee that the implementation and monitoring of the CSR Policy is in compliance with the CSR objectives and policy of the company. The Board's Report CSR disclosure is a public statutory disclosure filed with the Registrar of Companies as part of the Form AOC-4 XBRL filing under Section 137, is scrutinised by the statutory auditor, is available to the Ministry of Corporate Affairs for compliance monitoring, and is publicly accessible on the Ministry of Corporate Affairs portal — the reconciliation packet for the CSR obligation therefore has downstream public-disclosure consequences beyond the internal CFO close cycle.