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

Orchid Chemicals Ltd. has a CSR obligation of Rs 40 lakh for the year. How must the CSR functions, including policy and monitoring, be handled?

The Board of Directors discharges the CSR Committee's functions. Under Section 135(9), when the amount to be spent does not exceed Rs 50 lakh, the requirement to constitute a CSR Committee does not apply, but the CSR obligation and its functions remain.

  1. AA CSR Committee with at least one independent director is mandatory regardless of the amount
  2. BThey are discharged by the Board of Directors, as the committee requirement does not applyCorrect
  3. CThey are delegated to the statutory auditor
  4. DNo one need perform them because the amount is below Rs 50 lakh

Explanation

Section 135(9) says where the amount to be spent does not exceed fifty lakh rupees, the committee requirement does not apply and the Board discharges the Committee's functions. The obligation itself still remains.

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