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CSEET · Economic and Business Environment · Elements of Corporate Governance

A company's CSR Policy must indicate the activities to be undertaken by the company. According to Section 135, these activities must be in which areas?

The CSR Policy must indicate activities in areas or subjects specified in Schedule VII of the Companies Act, 2013. The Committee formulates and recommends the policy, and the Board approves it, so activities cannot be chosen freely outside the Schedule.

  1. AAreas or subjects specified in Schedule VIICorrect
  2. BAny area the promoters choose, including their own business expansion
  3. COnly areas approved by the Central Government each year
  4. DOnly areas located within the company's registered office city

Explanation

Section 135(3)(a) requires the CSR Committee to recommend a policy indicating activities in areas or subjects specified in Schedule VII. The Act does not allow free choice, nor does it require annual central approval. Local area gets preference but is not a restriction to the registered office city.

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