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CSEET · Economic and Business Environment · Elements of Corporate Governance

Under Section 135 of the Companies Act, 2013, which of the following is one of the thresholds, in the immediately preceding financial year, that makes a company required to constitute a Corporate Social Responsibility Committee?

A company with turnover of rupees one thousand crore or more in the immediately preceding financial year must constitute a CSR Committee. The other thresholds in the section are net worth of Rs 500 crore or net profit of Rs 5 crore, so the other options state wrong figures.

  1. ANet worth of rupees one hundred crore or more
  2. BTurnover of rupees one thousand crore or moreCorrect
  3. CNet profit of rupees fifty crore or more
  4. DTurnover of rupees five hundred crore or more

Explanation

The section applies to a company with net worth of Rs 500 crore or more, turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more in the immediately preceding financial year. Only the turnover figure of Rs 1,000 crore matches. The other options misstate the figures.

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