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

Anand Pharma Ltd is covered by section 135 with a CSR obligation of Rs 3 crore. Its Board has five directors, including two independent directors. Which proposed CSR Committee satisfies the Act?

A committee of three directors including at least one independent director satisfies the Act. Section 135(1) requires three or more directors with one independent, and the two-director relaxation applies only to companies not required to appoint independent directors.

  1. AThree directors, including one independent directorCorrect
  2. BTwo executive directors only
  3. CThree directors, all non-independent
  4. DTwo directors, one of them independent

Explanation

The company must have three or more directors with at least one independent director, since it is required to appoint independent directors. The two-director relaxation applies only where no independent director is required. The obligation exceeds Rs 50 lakh, so the Board cannot substitute.

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