Skip to content

CS Professional · CSR and Social Governance · Social Impact Assessment and CSR Audit

Anand Steels Ltd spent its full CSR amount on a health camp. A later assessment shows many beneficiaries were from outside the area where the company operates, and the camp reached few intended families. Which conclusion is most consistent with the need for impact assessment and section 135(5)?

The assessment shows that spending alone does not prove outcomes, and the company should have given preference to the local area and areas around its operations, as the proviso to section 135(5) requires. The penalty under section 135(7) concerns defaults in transfers, not poor targeting.

  1. ANo issue, because spending the full amount ends all obligations of the Board
  2. BThe company must pay a penalty of twice the amount spent
  3. CThe assessment shows that expenditure alone does not show outcomes, and the company should have given preference to the local area and areas around its operationsCorrect
  4. DThe camp becomes invalid and the amount must go to a Schedule VII Fund

Explanation

Section 135(5) first proviso requires preference to the local area and areas around where the company operates. Assessment reveals outcome gaps that spending figures hide. The penalty in section 135(7) applies to default in transfers under sub-sections (5) or (6), not to poorly targeted spending, and no automatic transfer arises.

Did you get it right without looking?

One question tells you little. A timed set on Social Impact Assessment and CSR Audit shows your real accuracy, how long you take and where you lose marks.

Practise Social Impact Assessment and CSR AuditFree diagnostic mock

More Social Impact Assessment and CSR Audit questions