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CSEET · Economic and Business Environment · Elements of Corporate Governance

A company's CSR obligation under Section 135(5) for the year is Rs 40 lakh. Which statement is correct?

The Board of Directors may discharge the CSR Committee's functions. Where the amount to be spent does not exceed fifty lakh rupees, the Committee need not be constituted, although the company must still spend the required CSR amount.

  1. AIt must constitute a CSR Committee of at least three directors including an independent director
  2. BThe functions of the CSR Committee may be discharged by the Board of DirectorsCorrect
  3. CIt is exempt from the CSR provisions entirely
  4. DThe Central Government must appoint the Committee

Explanation

Section 135(9) states that where the amount to be spent does not exceed fifty lakh rupees, the requirement of constituting a CSR Committee does not apply and the Board discharges its functions. The spending obligation still remains, so complete exemption is wrong.

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