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CS Professional · CSR and Social Governance · Corporate Social Responsibility

Himalaya Foods Ltd is covered by Section 135 and has computed that its CSR obligation for the year is Rs 40 lakh. Which statement about its CSR Committee is correct?

The committee requirement does not apply, and the Board of Directors performs the committee's functions. Section 135(9) provides this where the amount to be spent does not exceed Rs 50 lakh. The spending obligation itself continues, so only the constitution of the committee is dispensed with.

  1. AIt must still constitute a committee of at least three directors including an independent director
  2. BThe requirement to constitute the committee does not apply, and the Board of Directors discharges the committee's functionsCorrect
  3. CIt must constitute a committee of two directors only
  4. DIt is exempt from the whole of Section 135, including spending

Explanation

Under Section 135(9), where the amount to be spent under sub-section (5) does not exceed Rs 50 lakh, the committee requirement does not apply and the Board discharges its functions. Rs 40 lakh is within this limit. The company is still bound to spend, so the exemption is only from the committee, not from the spending obligation.

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