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CSEET · Economic and Business Environment · Elements of Corporate Governance

Under Section 135(9), when is a company relieved from constituting a CSR Committee?

A company need not constitute a CSR Committee when the amount it must spend under Section 135(5) does not exceed fifty lakh rupees. In that case the Board of Directors performs the Committee's functions, and the spending obligation continues.

  1. AWhen the amount to be spent under sub-section (5) does not exceed fifty lakh rupees, in which case the Board discharges the Committee's functionsCorrect
  2. BWhen the company has no independent director, in which case the CSR duty lapses
  3. CWhen the company's net profit is below Rs 10 crore, in which case no CSR spending is required
  4. DWhen the company has fewer than three directors, in which case the Central Government discharges the functions

Explanation

Section 135(9) states that where the CSR amount to be spent does not exceed fifty lakh rupees, the Committee need not be constituted and the Board of Directors discharges its functions. The obligation to spend remains, so the other options are wrong.

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