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A company covered by section 135 of the Companies Act, 2013 proposes four projects. Which can count as CSR expenditure under the Companies (CSR Policy) Rules, 2014?

Question and options

A company covered by section 135 of the Companies Act, 2013 proposes four projects. Which can count as CSR expenditure under the Companies (CSR Policy) Rules, 2014?

  1. A school-building programme in another country where it has a subsidiary

  2. A health insurance scheme for its own employees and their families

  3. A literacy programme for children in villages near its plant

  4. Effluent treatment that the pollution laws require at its plant

Answer and explanation

Correct answer: C - A literacy programme for children in villages near its plant

Promoting education is a Schedule VII activity, and section 135(5) prefers the local area where the company operates. Rule 2(1)(d) of the Companies (CSR Policy) Rules, 2014 excludes activities benefiting only the company's employees, activities outside India (save the specified sports-training exception) and activities undertaken to fulfil obligations under any other law.

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