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CS Professional · CSR and Social Governance · CSR Policy

Arjun Engineering Ltd is covered by section 135(1). Its CSR Committee met and finalised a draft policy listing activities in Schedule VII areas, and proposed Rs 3 crore as the spend. What is the correct next step under section 135?

The Board must approve the CSR policy after taking into account the Committee's recommendations, and then disclose its contents in the Board's report and on the company's website, if any. The Committee only formulates and recommends, so it cannot approve the policy itself.

  1. AThe Committee approves the policy and places it on the website
  2. BThe Committee transfers Rs 3 crore to a Schedule VII Fund
  3. CThe Board approves the policy after considering the Committee's recommendations and discloses its contents in its report and on the websiteCorrect
  4. DThe Central Government approves the policy before implementation

Explanation

The Committee formulates and recommends the policy and the expenditure amount. Under section 135(4)(a) the Board, after taking the recommendations into account, approves the policy and discloses its contents in its report and on the website, if any. The Committee has no power to approve, and no government approval or Fund transfer is involved at this stage.

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