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The CSR Committee of Narmada Steels Ltd resolves the following. Which resolution falls squarely within the statutory functions of the Committee under section 135(3)?

Recommending the amount of expenditure on CSR activities is a statutory Committee function under section 135(3)(b). Approving and publishing the policy, and ensuring the two per cent spend, are Board duties under sections 135(4) and 135(5), and Fund transfers are company obligations, not Committee functions.

  1. ATo recommend the amount of expenditure to be incurred on the CSR activities in the policyCorrect
  2. BTo transfer unspent CSR funds to a Schedule VII Fund within six months
  3. CTo approve the CSR policy and place it on the company's website
  4. DTo ensure that the company spends at least two per cent of average net profit

Explanation

Section 135(3) assigns three functions to the Committee: formulate and recommend the policy, recommend the expenditure amount, and monitor the policy from time to time. Approving the policy, placing it on the website and ensuring the two per cent spend are duties of the Board under sub-sections (4) and (5). The transfer of unspent funds is also a company/Board obligation under sub-sections (5) and (6).

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