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CS Professional · CSR and Social Governance · Corporate Social Responsibility

Kaveri Components Ltd must spend Rs 40 lakh on CSR for the year under section 135(5). It is not required to appoint an independent director under section 149(4). Which statement is correct about its CSR governance?

Kaveri need not constitute a CSR Committee because its obligation of Rs 40 lakh does not exceed fifty lakh rupees. Under section 135(9) the Board of Directors discharges the Committee's functions. The two-director Committee proviso applies only where a Committee is required.

  1. AIt must constitute a CSR Committee of three directors including one independent director
  2. BIt must constitute a CSR Committee of two or more directors
  3. CIt need not constitute a CSR Committee, and the Board discharges the Committee's functionsCorrect
  4. DIt is exempt from the CSR Policy requirement

Explanation

Section 135(9) says that where the amount to be spent does not exceed fifty lakh rupees, the requirement to constitute a CSR Committee does not apply, and the Board discharges its functions. Rs 40 lakh is below that limit. The two-director proviso applies only when a Committee is required, so it does not help here.

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