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Meera Pharma Ltd computes its CSR obligation for the year as Rs 48 lakh. The Board has not constituted a CSR Committee, and the Board itself reviews the policy, recommends the spend and monitors it. The company's net profit exceeds Rs 5 crore. Which statement is correct?

The arrangement is valid. Under section 135(9), where the amount to be spent does not exceed Rs 50 lakh, the CSR Committee requirement does not apply and the Board of Directors discharges the Committee's functions. Meera's Rs 48 lakh obligation falls within this limit.

  1. AThe company is in default because section 135(1) requires a Committee whenever any threshold is met
  2. BThe arrangement is valid only if the Board delegates monitoring to the audit committee
  3. CThe arrangement is valid, as the Committee's functions are discharged by the Board where the amount to be spent does not exceed Rs 50 lakhCorrect
  4. DThe arrangement is valid only if the amount is below Rs 25 lakh

Explanation

Section 135(9) provides that where the amount to be spent under section 135(5) does not exceed fifty lakh rupees, the Committee requirement does not apply and the Board discharges the Committee's functions. Rs 48 lakh is within this limit. Meeting a threshold in sub-section (1) does not override sub-section (9).

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