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CS Professional · CSR and Social Governance · Corporate Social Responsibility

Tapi Chemicals Ltd is covered by section 135(1). Its CSR obligation under section 135(5) for the year is Rs 40 lakh. How is the CSR function to be discharged?

Where the amount to be spent under section 135(5) does not exceed Rs 50 lakh, constitution of a CSR Committee is not required and the Board of Directors discharges its functions. Tapi Chemicals, with Rs 40 lakh, falls here but must still comply with CSR spending.

  1. AA CSR Committee of three directors must still be constituted
  2. BThe CSR Committee is not required, and its functions are discharged by the Board of DirectorsCorrect
  3. CThe function is delegated to the Audit Committee
  4. DThe company is exempt from CSR altogether

Explanation

Section 135(9) states 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. Rs 40 lakh is below the limit. The company still must spend, so it is not exempt.

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