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Consider the following statements in respect of Corporate Social Responsibility (CSR) under the…

The statement giving preference to the local area and nearby areas where the company operates is correct. Section 135 ordinarily requires at least one independent director…

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Consider the following statements in respect of Corporate Social Responsibility (CSR) under the Companies Act, 2013:

1. The CSR Committee of a company must have at least two independent Directors

2. The CSR Committee must ensure that the company undertakes the CSR policies

3. A company must give preference to the local area and areas around it where it operates for spending the amount embarked for CSR activities

Which of the statements given above is/are correct?

Select one answer
Answer and explanation

Correct answer D

The statement giving preference to the local area and nearby areas where the company operates is correct. Section 135 ordinarily requires at least one independent director on the CSR Committee, with an exception for companies not required to appoint one; it does not require two independent directors. The Committee recommends and monitors CSR policy, while the Board must ensure that the policy's activities are undertaken.

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