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Sundaram Textiles Ltd. is an eligible company under the CSR provisions. Its Board approves a plan to build a girls' hostel near a government school in a backward district of Odisha, with spending spread over two years. Under the Companies (CSR Policy) Rules, how is this activity best classified?

The hostel is an ongoing project because it is a multi-year project with a defined timeline of up to three years excluding the commencement year. It is not a one-time event and is not disqualified for spanning financial years.

  1. AAn ongoing project, if it is a multi-year project with a defined timeline not exceeding three years excluding the year of commencementCorrect
  2. BA one-time event, because it is a single construction activity
  3. CAn administrative overhead, because it involves building work
  4. DAn activity that is not CSR, because it spans more than one financial year

Explanation

The CSR Rules define an ongoing project as a multi-year project, other than one-time or year-long activity, with a timeline of not more than three years excluding the year of commencement. A two-year hostel build fits this. Calling it a one-time event ignores its multi-year nature, and no rule bars projects spanning years.

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