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CMA Final · Corporate and Economic Laws · Corporate Governance and Social Responsibility and Sustainability

Under the Companies Act, 2013, a company whose CSR obligation under section 135(5) for the year is Rs 40 lakh does not have to constitute a CSR Committee. Who discharges the functions of the Committee in such a case?

The Board of Directors discharges the CSR Committee's functions. Under section 135(9), where the CSR amount to be spent does not exceed fifty lakh rupees, constituting the Committee is not required, and the Board itself performs the Committee's functions. Rs 40 lakh is within that limit.

  1. AThe Audit Committee of the company
  2. BThe Board of Directors of the companyCorrect
  3. CThe independent directors acting separately
  4. DThe Central Government through a nominated officer

Explanation

Section 135(9) provides that where the amount to be spent does not exceed fifty lakh rupees, the CSR Committee requirement does not apply and the Committee's functions are discharged by the Board. Rs 40 lakh is below the limit, so the Board performs them. The Audit Committee has no such role under the section.

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