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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Corporate Social Responsibility (CSR)

Veda Textiles Ltd, a company with net profit of Rs 7 crore in the immediately preceding financial year, is required to spend Rs 1.2 crore on CSR in the current year. Which body must formulate and recommend the CSR Policy, indicating the activities to be undertaken, to the Board?

The CSR Committee of the Board formulates and recommends the CSR Policy, indicating the Schedule VII activities to be undertaken. The Board then approves it after taking the recommendation into account. Audit, nomination and remuneration committees and auditors do not hold this statutory function.

  1. AThe Audit Committee
  2. BThe Corporate Social Responsibility Committee of the BoardCorrect
  3. CThe Nomination and Remuneration Committee
  4. DThe statutory auditor

Explanation

Under section 135(3)(a), the CSR Committee formulates and recommends to the Board a CSR Policy indicating activities in areas or subjects specified in Schedule VII. The Board then approves it after considering the recommendation. Other committees and the auditor have no such role.

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