CS Professional December 2025 Question Paper CSR and Social Governance

FOR CS PROFESSIONAL EXAM PREPARATION

CS Professional 2025
Question Paper · CSR
and Social Governance
EXAM YEAR TYPE SUBJECT

CS Professional 2025 Question Paper CSR and Social Governance
DATE

December 2025

Notes · Sample Papers · Previous Year Papers · Mock Tests

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Roll No. ..................................... : 1 : OPEN BOOK EXAMINATION

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Time allowed : 3 hours Maximum marks : 100

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Total number of questions : 6 Total number of printed pages : 16

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NOTE :a Answer ALL questions.

PART–I

1. YUVA Ltd. is a textile manufacturing company based in Gujarat, with an annual turnover
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mgiven prime importance and the promoters themselves
of ` 250 crore and net profit of ` 15 crore. Though the company was promoter owned,

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compliance with laws and regulations were

ag various charitable causes. 'The Board of Directors also
in their personal capacity supported

had independent directors and industry experts to guide the management. Meenu, a Company

Secretary was recently appointed as compliance officer of the company and was asked to

ensure compliance with the applicable laws and regulations in true letter and spirit.

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c. o as Director of the Company. He bought a new perspective to theseBoard
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As a part of transitioning and succession, Grega, son of the Promoter director was appointed

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gla that the company needs to adopt a structured approach to a
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create genuine value for society

and the communities surrounding its operations. In this context, Meenu mentioned that, Corporate

Social Responsibility (CSR) has emerged as a vital aspect of modern corporate governance

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and ethical business conduct. It reflects the responsibility of organizations not just to generate

profits, but also to contribute to the welfare of society and the protection of the environment.

In India, CSR received a statutory framework through the Companies Act, 2013, which

mandates that companies meeting specified financial thresholds to spend at least 2% of their

average net profits of the last three years on CSR activities.

The Board of Directors constituted a CSR committee, which after due consideration of the

CSR activities allowed under the Act, identified three major focus areas : education, health

and sanitation and environmental protection. These areas were selected because they were

socially relevant, legally permissible and closely connected to the needs of the local community,

where most of the Company’s workforce resided. The Company allocated an annual CSR

budget of ` 24 lakh, with ` 10 lakh earmarked for education initiatives, ` 8 lakh for health

and sanitation and ` 6 lakh for environmental projects. This strategic allocation ensured both

diversity and depth in CSR activities, allowing the Company to make a measurable difference

across multiple sectors. By integrating CSR into its business philosophy, YUVA Ltd. showcased

that social responsibility and profitability can go hand in hand.

To achieve its CSR goals, YUVA Ltd. was evaluating to appoint an agency to support

them in execution of CSR activities and collaborate with local authorities. The Board had

a broad plan for each of the activities - in the education sector, the Company would distribute

free books, uniforms, and learning materials to government school students, set up digital

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classrooms by donating computers and introduce scholarships for talented but financially weak

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students. In the health and sanitation sector, the Company would conduct quarterly health

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camps, distribute free medicines and build toilet facilities in five nearby villages under the

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l Bharat Mission, thereby addressing both preventive healthcare and sanitation
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Swachh

In the environmental domain, a tree plantation drive would be launched, planting over 10,000

saplings.

The Board viewed that these CSR initiatives will create significant social and economic impact.

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Incidentally, with these activities, employees and their extended families will also benefit.

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emclean energy. Internally, CSR will enhance employee
Environmental projects will not only promote ecological balance, but also demonstrate the

Company’s commitment to sustainabilitysand

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morale, as workers will feel a proud of their Company’s contribution to their own
communities.

Externally, YUVA Ltd. will gain a positive reputation among investors, customers, and regulators.

However, the management was of the view that, there will be certain challenges as well,

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like selecting reliable NGOs and ensuring effective utilization of funds. There could also be

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. Furthermore,
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eand scholarships required
intentions.

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health
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camps

ag continuous monitoring and follow-up. However, these challenges would encourage the Company

to adopt stronger monitoring mechanisms, build deeper partnerships with stakeholders and

design CSR projects that had both immediate impact and long-term benefits.

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In the background of above facts, answer the following :

(i) ‘Expenditure on activities which predominantly benefit persons associated with Company

cannot be treated as CSR.’ Can employees of YUVA Ltd. be beneficiaries ? Explain.

(ii) Prepare a brief note on the points to be considered while finalizing an implementation

agency.

(iii) As a Consultant of the Company, outline the general recognition and measurement

criteria for CSR.

(iv) ‘CSR is a key to brand building and value creation’. Elucidate with an example.

(5 marks each)

2. Glipco Manufacturing Ltd., a large multinational company, which is well known for the

charitable activities it takes up as part of its CSR programme, has experienced increasing

pressure from stakeholders to formalize its commitment to sustainability as more than a

regulatory obligation. The Company annually spends around ` 18 crores towards CSR

activities. As the world moves towards focus on the United Nations Sustainable Development

Goals (SDGs), the Company’s top management understood the need to connect operational

functions and reporting to a framework of the SDGs. In the second quarter of the fiscal

year, Alisha, Company Secretary, was given the responsibility of starting and leading the

conversation about integrating the SDGs at the board level. She was also entrusted with

the responsibility of supporting the CSR committee and liaising with NGOs, which the

company engaged to execute its CSR projects.

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She began with a concise overview of the global relevance of the SDGs and emphasized

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the role of corporate governance in promoting sustainable practices. The Sustainable

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Development Goals (SDGs) are the world’s best plan to build a better world for people
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l planet by 2030. She also addressed ISO 26000 in her discussion. In thea modern
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and our

business landscape, organisations are increasingly expected to take responsibility for their social,

environmental and economic impacts. Alisha further informed the Board that the Company

is in the process of aligning with the United Nations Sustainable Development Goals and

relevant CSR projects have been taken up by the Company to achieve a few SDG goals
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like distribution of sanitation kits and installation of toilets in identified villages, installation of

a system that clean and reuse water etomsave freshwater, etc. In its meeting, the Board
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appreciated Alisha’s inputs, but g
a wanted to understand the impact of the CSR activities of
the Company and improvements in the process, if any. Alisha informed the Board that the

CSR impact assessment is not mandatory, considering the amount they spend.

(a) Explain the inter-linkage between Corporate Social Responsibility and Sustainable

Development Goals.
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. Ltd. ? Comment.
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Is CSR impact assessment mandatory for Glipco Manufacturing

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(c) As a consultant, outline the principles of impact assessment

which it addresses.

(5 marks each)

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Attempt all parts of either Q. No. 3 or Q. No. 3A

3. (a) Alpha Ltd., a company manufacturing turbines, had a net profit of ` 6 crores in

the second year of its business. Aruno, the Company Secretary of the company

informed the Board, that the company has to spend 2% of its average net profits

on CSR activities. The Board constituted a CSR committee and Aruno, was tasked

to find a credible and suitable agency to implement CSR projects. While Aruno was

trying to find such agencies, he spoke to one of his friends, who suggested him to

check the National CSR Exchange portal.

Discuss the way in which the National CSR Exchange Portal can help Alpha Ltd.

in CSR implementation.

(5 marks)

(b) ‘Enlightened shareholders approach is different from shareholder inclusive approach.’

Elucidate.

(5 marks)

(c) ‘Donations are different from Corporate Social Responsibility’. Comment in the

background of guiding principles issued by Reserve Bank of India (RBI) in 2005,

for donations by banks in India.

(5 marks)

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OR (Alternative Question to Q. No. 3)

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.co Industries Ltd. is company based in Kochi, manufacturing rubber and s e m
emproducts. It has a flourishing business with an increasing growth trajectoryaand
3A. (i) Manimekhala

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allied

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a As a part of CSR activities, the Company spends towards providing medical and
educational facilities in rural areas. As advised by its tax consultants, the Company
claimed input credit of GST on the amount spent towards CSR activities.
Subsequently, the GST Officer raised an objection saying the Company cannot claim
the GST input on CSR activities, as it does not directly relate to its business.

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With reference to a case-law, comment whether the contention of the GST Officer
is justified.
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(5 marks)
(ii)
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“Life cycle assessment is often called a ‘cradle-to-grave’ approach to sustainability.”
Elucidate in the background of life cycle assessment framework.
(5 marks)
(iii) Fursch Ltd., a pipes manufacturing company is based in Pune. The Company has
been regularly contributing to CSR activities over and above the statutory requirements.
During one of the meetings, Shyla, the Managing Director of the Company suggested

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that the Company should get the CSR audit done to understand, if there are any
m issues which need to be addressed. One of the Director asked,. what is the CSR
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audit about, as he had heard only of statutory audit and internal

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Director asked the Company Secretary to provide a briefg
ag about the CSR audit for their information and understanding.
Draft a brief note about the various elements which a CRS audit examines.

(5 marks)

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PART–II

4. (a) Vrina, a Senior Company Secretary, is a seasoned professional and is part of Board

of Directors of many listed companies. Vrina has philanthropic interests and is part

of CSR activities of few such companies. She was invited to be a Panel member

for ‘CSR & Social Impact – Conclave’, wherein she was addressing a gathering

of professionals across industry on the emerging concepts like social governance, social

stock exchanges, its framework, etc. Excerpts from her address – “The idea of a

Social Stock Exchange (SSE) in India was first proposed by the finance minister

in the Union Budget 2019-20. The objective was to create a dedicated platform under

SEBI where non-profit organizations (NPOs) and for-profit social enterprises (FPEs)

could raise funds transparently and efficiently. Unlike traditional stock exchanges that

cater to wealth maximization, SSEs focus on social impact, accountability, and

sustainability, enabling investors to support initiatives aligned with societal development.

To implement this vision, SEBI introduced a framework under two major regulatory

guidelines : ICDR Regulations (Issue of Capital and Disclosure Requirements, 2018)

and LODR Regulations (Listing Obligations and Disclosure Requirements, 2015). Together,

these provide a structured pathway for social enterprises to list, disclose and report

their activities.

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The ICDR framework was amended to include specific norms for social enterprises

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intending to raise funds through SSE. These enterprises must establish a clear social

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intent and impact, with focus areas such as eradicating hunger, promoting education,

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For non-profits, the ICDR regulations allow them to raise securities, which are unique

and represent social investments. The regulations also require annual impact reports,

certified by social auditors, which document the outcomes of funds raised. This ensures

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that every rupee mobilized translates into visible progress toward Sustainable Development

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Goals (SDGs).

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The LODR framework was extended to SSE listings to strengthen transparency and

trust. Under these rules, listed social enterprises must comply with periodic disclosures,

including governance practices, financial statements, utilization of funds and social impact

reports and are different from commercial entities. One unique feature is the requirement

of a Social Impact Scorecard, a reporting mechanism that ensures stakeholders can
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measure how effectively the enterprise achieves its stated objectives. Additionally, SSE

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listed entities must appoint a Social Auditor from SEBI registered institutions.

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ag The establishment of a Social Stock Exchange under ICDR and LODR regulations

marks a milestone in institutionalizing social finance in India. By bringing transparency,

accountability and innovation into social funding, SSE can help achieve India’s

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developmental priorities and SDGs. However, its success will depend on effective

implementation, investor participation and building the capacities of smaller social enterprises

to comply with regulations.”

Based on the above, answer the following questions :

(i) Explain the approach for implementation of social governance within a Company.

(ii) ‘Social enterprise may raise funds through various means.’ Explain with reference

to SEBI (ICDR) Regulations.

(iii) Outline the issues which must be addressed by a social auditor.

(5 marks each)

(b) Ruchir, a retired teacher in Bhimwadi village wanted to create a trust which would

financially support the poor students in his village. He informed his nephew Suchir

about his wish to create a trust with the house and 10 acres of agricultural land

he owned. He wrote a hand written note to Suchir stating ‘it is my wish that you

support the object of needy students with my house, and I hope it continues after

my lifetime’. Suchir suggested that it would be appropriate to create a valid trust

for this purpose. Ruchir said, the hand written note will be sufficient.

With reference to Indian Trusts Act, 1882, comment whether Ruchir created a

valid trust.

(5 marks)

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5. (a) Dhani was one of five partners in the M/s Bright Light House, a partnership firm.

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In 1995, the partners signed a partnership deed outlining their responsibilities and rights.

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Each partner received 20% of the firm’s assets and earnings. According to clause
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l of the deed, any partner who retired would be eligible to receive thea amount
a standing to his credit in the capital account, his share of goodwill and profits up
18

to the date of retirement, all of which were to be paid within six months of retirement.

He later decided to leave the firm, giving the required notice in accordance with

the deed’s provisions. The remaining partners continued the business without him.

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However, they did not pay Dhani, his share of goodwill, arguing that since the business

was not dissolved and the firm m
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ag right to goodwill, as per the partnership deed. Can
Dhani filed a suit claiming his

a retiring partner claim goodwill if the firm continues with other partners ? Explain

the rights and obligations of the buyer and seller in the sale of goodwill.

(5 marks)

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(b) Methani, a village in Karnataka was known for the hand-woven cotton garments and

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. and his emphasis
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e requirements, etc. A
unity amongst the villagers. It was all due to the efforts of Sarpanch

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on governance at grass root level, taking care of infrastructural

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Gram Panchayat meeting was regularly held by the elected

of a village to discuss and make decisions on local issues. In these meetings, mainly

local governance and issues related to local development were discussed and decided

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upon. Hence, for planning and the social inclusion, all villagers were asked to equally

take part in these gram parchayat meetings. A Gram Panchayat meeting is an ideal

place for pursuing the implementation of government schemes. The presence of members

of the Gram Panchayat also serves as effective real-time communication. The Sarpanch

said that it is crucial to prepare the attendance register for these meetings in order

to ensure efficient recording of member’s presence. However, one of the persons

present, mentioned that it is not needed as it is a meeting between villagers. The

Sarpanch explained him the importance of having an attendance register.

Outline the key points that should be considered while preparing the attendance registers

for Gram Panchayat meetings.

(5 marks)

(c) Mitra for Aged, an NGO based in Nagpur, was set up by Miraj, to take care

of aged and elderly destitute. Though Miraj had been funding the NGO with his

sources, he was now exploring if he could get some funds, given the medical and

other expenditure for aged and elderly. He tried reaching out to various sources including

his friends and acquaintances. One such contact, assured him that he can speak and

can arrange some donations from Netherlands where his employer is based. When

Miraj told this to his friend Varuna, a Company Secretary, he advised him to be

cautious about few aspects before accepting foreign contribution. Advise Miraj.

(5 marks)

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Attempt all parts of either Q. No. 6 or Q. No. 6A

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e was partner in VRV & Associates, partnership firm, which was into glogistics
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6. (a) Vindha
a business. The revenue of the firm had crossed ` 40 crores, but no proper accounting
and reporting was done. Records were maintained only for the purposes of tax filings.

The consultant advised Vindha, to appoint an accountant, who would maintain the

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books of accounts and prepare financial statements as per the applicable standards.

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Vindha told the consultant, that accounting standards would not apply to them as

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they are a non-corporate entity.
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In this background, comment about the applicability of accounting standards.

(5 marks)

(b) Neel and Sheel, both practicing Company Secretaries were close friends. One of their

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friends, Heel was a Chartered Accountant, handling small and medium size businesses,

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especially non-corporate entities. During one of the conversations between the three

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friends, Heel shared that there has been a dispute in one of his clients between the
a partners. The matter is likely to reach Court and there is no documentary evidence

of meetings being held. He further added, as this was a non-corporate entity, he

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did not insist on notice and meetings in such entities. He further asked Neel and

Sheel to guide him about the notice and other requirements relating to meetings for

non-corporate entities.

Briefly explain the requirements of Notice of the meeting for non-corporate entities.

(5 marks)

(c) Prapti and Param, both close friends, constituted a partnership firm for construction

of a shopping complex on Prapti’s land and executed a deed of partnership. Clause

5.2 of the partnership deed envisaged that the Prapti’s share in the profits would

be 40% and she would receive a monthly amount. Prapti was receiving ` 2 lakhs

per month as per the deed. However, Param did not disclose to her, the amount

which was due on settling the annual accounts of the firm. He neither furnished the

statement of accounts to Prapti, nor disclosed the profitability of the firm. Meanwhile,

there was a dispute with a tenant and the matter went to Court. While all this was

not informed to Prapti, Param wanted to resolve the dispute through arbitration.

Can the matter be resolved through arbitration ? Comment in the background of the

Indian Partnership Act, 1932.

(5 marks)

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OR (Alternative Question to Q. No. 6)

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6A. (i)
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Aranya and her family owned a temple in the Mantravanam, a village in
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interiors
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of eAndhra
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laAranya wanted to renovate the temple and also allow other villagers to visit thea temple.
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In one of the family gatherings there was a discussion between the family members

and they all agreed to contribute for renovation of the temple. Aranya suggested to

register a Trust to take care of the temple related activities. One of her cousins

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asked if they can avail any tax benefits for the Trust. In this background, explain

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the regulatory framework for registration of Trust and its taxation.

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(5 marks)

(ii)
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Perar IT Solutions Ltd. is a fast-growing IT solutions company in Kochi. The Company’s

head count has been on an increasing trend and is expected to cross 2,500 by the

end of next year. As a part of its strategy, the company appointed, Varada, a seasoned

Human Resources (HR) professional, to head its payroll and talent team. Varada was

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asked to make a presentation to the Board about the action plan to demonstrate

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the company’s commitment to employment equality.

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Outline the actions through which the company can demonstrate its commitment to
a employment equality.

(5 marks)

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(iii) Krupalu Heights, a gated community had more than 200 flats, with necessary amenities.

However, the builder had moved out of the country without setting up any association

or society to take care of the maintenance and amenities. To address this situation,

the residents convened a meeting and decided to register a society or an Association,

for managing the maintenance and amenities of the community. Mural, one of residents

reached out to Kural, a Company Secretary and close friend, to help them understand

the registration and reporting obligations of a society.

With reference to Societies Registration Act, 1860, explain the reporting obligations

of society.

(5 marks)

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