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CSEET · Economic and Business Environment · Elements of Corporate Governance

Under the Companies Act, 2013, which of the following is a threshold that makes a company subject to the Corporate Social Responsibility provisions, based on the immediately preceding financial year?

A company must follow the CSR provisions if, in the immediately preceding financial year, it had a net profit of rupees five crore or more. The other triggers are net worth of rupees five hundred crore or more or turnover of rupees one thousand crore or more.

  1. ANet profit of rupees five crore or moreCorrect
  2. BNet profit of rupees fifty lakh or more
  3. CTurnover of rupees one hundred crore or more
  4. DNet worth of rupees one hundred crore or more

Explanation

Section 135(1) 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. The other figures are not the statutory limits; Rs 50 lakh relates to the CSR spending amount that removes the committee requirement.

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