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CS Professional · CSR and Social Governance · Guidelines on CSR

Narmada Foods Ltd's CSR obligation for the year works out to Rs 45 lakh. Which statement about its CSR governance is correct under section 135?

Because the amount to be spent, Rs 45 lakh, does not exceed fifty lakh rupees, the CSR Committee requirement does not apply and the Board of Directors discharges the Committee's functions, though the spending obligation continues.

  1. AIt must constitute a CSR Committee of at least three directors including one independent director
  2. BIt need not constitute a CSR Committee, and the Board of Directors discharges the Committee's functionsCorrect
  3. CIt is exempt from the CSR spending requirement altogether
  4. DIts CSR functions must be handed to the Audit Committee

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 its functions. Rs 45 lakh is within this limit. The spending obligation itself remains.

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