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

Meera Foods Ltd has a CSR obligation of rupees forty lakh for the year. Who discharges the functions of the CSR Committee, and what does the law say about committee constitution in this case?

Because the CSR amount of forty lakh rupees does not exceed fifty lakh rupees, section 135(9) removes the need for a CSR Committee and the Board of Directors itself discharges the committee's functions.

  1. AThe Board of Directors discharges the functions, and the requirement to constitute a CSR Committee does not applyCorrect
  2. BA three-member committee with an independent director is still mandatory
  3. CThe statutory auditor discharges the functions of the Committee
  4. DThe Central Government nominee discharges them until the amount exceeds one crore

Explanation

Section 135(9) provides that where the amount to be spent under sub-section (5) does not exceed fifty lakh rupees, the committee requirement does not apply and the Board discharges the committee's functions. Forty lakh is below that limit.

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